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Official Gazette

Saturday, September 23, 2017

Policy digest September 2015

Updated: 14:40’ - 22/09/2015
* Incentive mechanism for industrial explosive materials to be introduced

The Ministry of Industry and Trade recently said it would propose an incentive mechanism for the provision of professional blasting services as well as preferential export duty and soft loans for overseas investment in manufacturing industrial explosive materials.

The proposal aims to end the situation that a number of individuals and units that took advantage of loopholes in the management of industrial explosive materials to illegally trade in and use them.

In addition, the ministry will soon propose incentives for domestic enterprises to invest in manufacturing explosive pre-substances, emulsifiers and compound waxes.

Production lines with advanced technologies and those serving economic and national defense purposes and industrial explosive materials for the oil and gas sector will be included in the list of sectors and products enjoying investment incentives.

Next year, the ministry will ask for the Government’s permission to draft a decree to replace Decrees No. 39/2009/ND-CP, No. 54/2012/ND-CP and No. 76/2014/ND-CP regulating the field.-

* Simplification of customs procedures reviewed

The General Department of Customs (GDC) recently informed that it had proposed removing 19 administrative procedures and simplifying 46 others.

At a business consultation conference on the implementation of the Customs Law and registration guidance, jointly organized by the GDC and the US Agency for International Development (USAID) on September 8 in Hanoi, the GDC said it had reduced unnecessary customs documents and the time required for appraisal of customs dossiers to under two days and physical inspection of goods to under eight hours.

However, enterprises complained that their shipments were still subject to a number of time-consuming and costly specialized inspections to complete customs clearance procedures at customs offices.

Pham Thanh Binh, a consultant for the USAID’s Governance of Inclusive Growth project said improvements in customs procedures could hardly be precisely measured through practical surveys but could only be experienced in a long term.-

* Government urges stricter management of sea shipping freights

Deputy Prime Minister Hoang Trung Hai has asked the Ministry of Industry and Trade (MoIT) to coordinate with the Ministry of Transport (MoT) in elaborating regulations on maritime transport freights and surcharges calculated based on maritime transport freights in order to be included in the draft Law Amending the Maritime Code.

Residents of Hon Tre island commune (Kien Hai district, Kien Giang province) wait for a speed-boat trip to Rach Gia city __Photo: Le Sen/VNA

At a recent conference to announce official conclusions on collection of surcharges based on maritime transport freights by foreign shipping lines operating in Vietnam, the MoIT was assigned to work with the MoT, the Ministry of Finance (MoF) and relevant agencies in reviewing and assessing the collection of such surcharges for handling of violations in accordance with the Law on Competition.

The MoF will collaborate with the MoT, the MoIT and relevant agencies in inspecting the collection of such surcharges for handling of violations under regulations.

The deputy PM also required the MoT to coordinate with the Ministries of Justice, Finance, Industry and Trade and relevant agencies in reviewing various surcharges based on maritime transport freights collected by foreign shipping lines operating in Vietnam, comparing them with international practices and proposing a list of surcharges for application in Vietnam and the procedures for registration, declaration and control of such surcharges. 

According to the Vietnam Maritime Administration, by October 2014, there are some 40 foreign sea shipping firms operating in Vietnam, handling around 88 percent of goods exported from and imported into Vietnam and almost all goods imported from Europe, America and Northern America.

At present, Vietnamese goods owners are facing 12 surcharges, including terminal handling charge, container imbalance charge, port congestion surcharge, cleaning container charge, container repair, warehousing and billing charges. In reality, interests of goods owners have been left unprotected and shipping firms have usually abused these surcharges for the reason that Vietnamese businesses did not often directly negotiate the signing of transport contracts and no legal document regulating the management and supervision of the collection of surcharges is in place.-

* Bill on charges and fees discussed

A law on charges and fees is expected to create a comprehensive legal framework for regulating state budget revenues from the public service provision and use.

This was heard at a seminar on a number of issues in the draft law on charges and fees organized on September 10 in Hanoi by the Center for Research on Development Communication under the sponsorship of the Canadian Department of Foreign Affairs, Trade and Development.

The seminar participants said that as Ordinance No. 38/2001/PL-UBTVQH10 on Charges and Fees lacked provisions on compensation for service costs, the country has failed to attract investment from all economic sectors and promote the socialization of public services.

It was necessary to prescribe the principles for determining appropriate charge and fee levels to attract social resources to the provision of public services, said the participants.

The law will abolish a number of charges before shifting to the service price mechanism according to market rules for services provided by non-state institutions and individuals.

It is expected to promulgate a list of 52 charges and 39 fees.

It will set out a common principle for determining charge rates for both services provided by the State and those provided by organizations and individuals. The principle of guaranteeing compensation for service costs will replace the principle of investment capital retrieval in a reasonable period of time.

The service price mechanism will be applied to services provided by the non-public service providers and the State will only provide and charge services which the market cannot provide or is ineffectively providing.-

v Excise tax on domestic sale of imports proposed

The Ministry of Finance would like to amend prices for calculation of excise tax on imported goods towards additionally imposing excise tax on imports when sold by importers on the domestic market.
However, this expected move faces protests from many businesses as it may result in 15 percent increase in excise tax compared to the current tax rates.

According to the consolidated Law on Excise Tax, the excise taxed price of a goods or service is the selling price or service provision charge rate exclusive of excise tax, environmental protection tax and value-added tax.
Under Decrees No. 26/2009/ND-CP dated March 16, 2009, and No. 113/2011/ND-CP dated December 8, 2011, detailing prices for calculation of excise tax on excise tax-liable goods, for imported goods, prices for calculation of excise tax will include CIF prices plus import duty.

According to the Ministry of Finance, in the context that import duty on automobiles and air conditioners will be slashed to zero percent under international commitments, the application of prices for calculation of excise tax on imported goods will not guarantee the equality between domestic goods and imported goods, and importers may take advantage of such situation to commit transfer pricing, causing losses to the state budget and weaken the competitiveness of domestic goods.

The ministry said it was necessary to revise regulations on prices for calculation of excise tax for imported goods to include expenses for domestic sale of imports by importers.

In addition, there will be regulations on prices for calculation of excise tax in cases of selling imported goods via subsidiary companies  or to other subsidiary companies in the same parent company in order to restrict transfer pricing.

Disagreeing with the ministry’s viewpoint, the Vietnam Beer, Liquor and Beverage Association considers such change unreasonable with regard to imported liquor products. According to the Association’s Chairman Nguyen Van Viet, if prices for calculation of excise tax on imports are calculated based on importers’ selling prices, excise tax on imports will increase as tax will be paid twice when imported and sold on the domestic market. As a result, payable excise tax will increase by 15 percent to 60-65 percent instead of current 55 percent.

Under Government Decree No. 94/2012/ND-CP on management of liquor manufacture and trading, liquor importers may sell imported goods to distributors or retailers or retail imported goods directly at their shops in the country.
As a result, there will be different selling prices applied by importers and, therefore, different prices for calculation of excise tax.-

* Bareboat charter for fisheries in Vietnam to be permitted soon

Deputy Prime Minister Hoang Trung Hai has recently assigned the Ministry of Agriculture and Rural Development (MARD) to revise current regulations, and elaborate and promulgate new regulations on bringing of fishing ships from overseas into Vietnam in the form of bareboat charter for fishery purposes.

He noted that such regulations should be based on current domestic regulations on import, registration and management of fishing ships and seagoing ships.

For the immediate future, the MARD will issue specific guidance on import of foreign fishing ships into the country under bareboat charters and effective management of these ships in the course of their fishery activities.- (VLLF)
 

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