* Specific legal grounds are required for the public-private partnership (PPP) model, said experts, to attract private sector investment in infrastructure development projects.
It is expected that this model will be officially stipulated in a government decree for pilot application to the transport sector and some other key sectors, including power and water supply, environmental protection and education, on principles that private sector investment capital must be guaranteed not to become public debts and projects to be selected for this model must be important, large-sized, capable of retrieving investment capital from tolls or charges paid by project users, and susceptible of high technologies.
With its potential to ease the burden on the state budget, this model also requires the State to provide private investors with financial incentives, for instance, credit guarantee and preferential tax rates.
* A new import duty policy aiming at stimulating the development of the domestic automobile industry’s allied industries has been proposed by the Industry and Trade Ministry to the Government for approval.
In a bid to limit auto imports, a major element of the current trade deficit, before the country’s commitment to fully open its market to auto imports by 2018, the proposal suggests the imposition of import duties at reasonably high and stable rates until 2018 on automobile parts and accessories which are domestically available.
For domestically unavailable parts, the Ministry proposed an import duty rate of 0% or as low as possible according to the country’s tariff reduction commitments. Particularly for buses, trucks and green (environmentally-friendly) cars, the Ministry proposed a special incentive of 50% reduction of the current value-added tax rate.
* Also concerning allied industries, especially those for garment-textile, leather footwear, telematics, auto manufacture and assembly and manufacturing mechanics, the Industry and Trade Industry has been assigned to further finalize and submit to the Government or the Prime Minister a draft decree or decision specifying policies for development of these industries, in furtherance of the master plan on development of Vietnam’s allied industries up to 2010, with a vision towards 2020.
The Ministry will also coordinate with concerned agencies in elaborating a guiding circular and revising the said master plan on allied industry development.
New regulations are expected to specify such incentives as the State’s credit capital (up to 85% of a project’s total capital) for investment in fixed assets, early land allocation, land rent or use levy exemption or reduction, financial supports for human resource training, preferential corporate income tax rates for first 15 years and 9 subsequent years and import and export duty relief for allied industry projects or parks.
At present, allied industries are not yet eligible for import duty, corporate income tax and value-added tax incentives while projects engaged in these industries are not yet entitled to infrastructure priorities.
* The General Statistics Office (GSO) is circulating a draft regulation on reporting and statistical regimes applicable to state enterprises and foreign-invested enterprises for public comment.
These enterprises, including economic groups and their subsidiaries, wholly foreign-owned enterprises and enterprises with controlling foreign holdings, will be required to send monthly, quarterly, biannual and annual reports to the GSO, their immediate superior agencies and provincial-level administrations.
Such a report must cover an enterprise’s business results, taxes, investments, labor force and statistics on results of scientific and technological application, waste treatment, environmental protection, job training and labor accident prevention.
Current reporting and statistical regimes were promulgated before the enactment of the Law on Statistics and relevant laws and therefore show some inappropriate points which might cause lack or inconsistency of information and data for general statistics.
* In commenting a draft decree on organization and operation of the State Capital Investment Corporation (SCIC), the Construction Ministry, in Official Letter No. 962/BXD-KHT, disagreed with the proposal (Article 49 of the draft) on setting up a fund for added value bonuses at the SCIC.
It argued that according to the draft, all direct expenses and commendation and reward entitlements for SCIC employees are already guaranteed. In addition, incomes from value added thanks to the sale of state capital (as equity shares) of state enterprises should be accounted as state capital increase to make up for the state capital value decrease (compared to received state capital) due to sale of the state capital of loss-making enterprises.
Such value-added bonus fund, if any, should be set aside only for non-state capital portions.
* Import duty rates on some consumer goods will soon rise according to a circular recently drafted by the Finance Ministry guiding new preferential import duty rates of a number of commodities which are inessential or not encouraged to be imported, in the Preferential Import Tariff.
Fresh or frozen meat of some animals and meat-based byproducts which are subject to the duty rate of 10% will be duties at 14%. The duty rates for garlic, onions and the like will rise from 15% to 20%. Some fruits and vegetables will be subject to a duty rate of 23% instead of current 20%.
* Rules for classification of investment projects by their investment capital levels in the context of construction price fluctuation will be proposed by the Planning and Investment Ministry to the Government in a decree it has recently drafted.
Investment projects will be grouped by total capital amount which may be converted by the time of investment decision or project adjustment in terms of investment capital limits based on a price fluctuation coefficient which depend on construction price indexes announced by the Construction Ministry and foreign exchange rates.
These projects will also be re-classified in case their objectives, major components and sizes change.
* Finance Ministry Circulars No. 17/2007/TT-BTC and No. 112/2008-TT-BTC will soon be superseded by a new circular prepared by the State Securities Commission (SSC) with more specific provisions on public offering of securities.
The new regulation dwells mostly on initial public offering registration dossiers, especially those of limited liability companies and foreign-invested enterprises transformed into joint-stock companies, and registration for sale of shares for founding commercial banks.
Public offering plans must clearly analyze the degree of stock value dilution caused by additional issuance and impacts on shareholders’ interests and remedies therefore.
For offering proceeds planned to be used for project implementation, issuers should identify and register a rate of successful offering or the minimum proceeds to be mobilized through an officering.
* A regulation on stricter control of curative medicine sales promotion will be soon issued by the Health Ministry. As proposed by Vietnam Drug Administration Director Truong Quoc Cuong, sales promotion for curative medicines, a special commodity, should be banned or in some cases restricted at a low level of 5-7% instead of up to 50% as for other commodities at present for the reason that consumers rarely benefit from drug sales promotion. Medicine import and wholesale prices will also be publicized in the Internet for pharmacy and consumer information.
The Administration has recently refused to grant medicine import licenses to 12 companies and suspended operation licenses of foreign companies that failed to declare or inaccurately declared import prices upon medicine shipment arrival at Vietnamese ports.-