Supporting industry development is considered one of the top priority policies of Vietnam today, however, the current situation of the industry is still weak and needs appropriate policies to develop.
Designing supporting industrial products at a small and medium-sized enterprise in the engineering plastics industry in Bien Hoa
In order to give some strength to the industry, the Government has a preferential policy of corporate income tax (CIT) for projects producing supporting industry products.
Tax incentives for new investment projects
According to Decree No. 57, effective from the beginning of June, 2021, enterprises with investment projects (new investment and expansion investment) manufacturing products on the list of supporting industry products prioritized for development, implement before January 1, 2015, meeting the conditions of a project to produce supporting industry products as prescribed in Law No. 71/2014/QH13 and be granted a certificate of production incentives by a competent authority are entitled to incentives on corporate income tax.
Specifically, in case an enterprise has not yet enjoyed incentives, it will be entitled to enterprise income tax incentives under the condition that the project to produce supporting industry products starts from the tax period and is certified by a competent authority certifying for the production of supporting industry products. If the enterprise has already fully enjoyed the CIT incentives under other preferential conditions, they are entitled to the incentives under this policy for the remaining time from the tax period granted the Certificate of production incentives by the competent authority certifying of producing the supporting industrial products. In case an enterprise is enjoying enterprise income tax incentives under other preferential conditions, they are entitled to enterprise income tax incentives for the remaining time from the tax period granted the certificate of incentives by the competent authority certifying the manufacturing supporting industry products.
Along with tax incentives, the Government is also continuing to consider other solutions to promote and create development opportunities for the domestic supporting industry. There has been a separate Resolution of the Government on this issue with the goal that by 2030, supporting industrial products will meet 70% of the demand for domestic production and consumption; accounting for about 14% of industrial production value; there are about 2,000 enterprises capable of supplying directly to assembly enterprises and multinational corporations in Vietnam.
Implementing the incentive policies in businesses
In fact, despite encouraging businesses to invest in this industry, over the years, the number of businesses in the industry that have been able to access practical support is still quite modest. The reason is that many policies have not "touched" the real needs of enterprises, or procedures are cumbersome and complicated. Therefore, development support policies for supporting industries need to be "closer", procedures are more flexible and transparent. Like all businesses, businesses investing in supporting industries also need specific support policies in terms of procedures, interest rates, capital sources, taxes, and land.
Even in this new regulation, according to enterprises, getting a certificate of incentives for production of supporting industry products from a competent authority is also a challenge that not all businesses can reach.
The owner of a mechanical engineering enterprise has more than 10 years of experience in mechanical engineering, manufacturing, and supporting industries, but in fact, almost no support policy has been reached. Over the years the State has issued policies to determine the goals of supporting industry development, for enterprises to participate in production, but more importantly, its implementation to enterprises must be effective. Vietnam's small and medium enterprises, in their weakness compared to foreign enterprises, want to have more policies to remove difficulties and promote the development of the industry.
In Dong Nai, there are about 650 enterprises investing in supporting industries in which, FDI projects account for nearly 80%, the rest are domestic enterprises. Most of the domestic enterprises are located outside Industrial Zones with small and medium scale.
Currently, supporting industry is the industry that Dong Nai is giving priority to calling for investment in order to contribute to improving the rate of localization of products. At the same time, helping businesses have a stable domestic supply of raw materials for production and meet the requirements of origin of goods when exporting. Besides, in its industrial cluster development policy, Dong Nai also encourages the attraction of supporting industrial enterprises into the cluster, rearranges production facilities, etc., which is highly expected.
Phan Anh
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