Deputy Prime Minister Vuong Dinh Hue (standing) speaks at the working session with the Ministry of Finance (Photo: VNA)Hanoi (VNA) – Preferential policiesshould be applied selectively, targeting FDI businesses with effectiveoperation rather than the scale of investment, Deputy Prime Minister Vuong DinhHue said at a working session with the Ministry of Finance in Hanoi on February28.
He said it is important to both attractinvestment and ensure revenues for the State budget, stressing that the goal inthe time ahead is to promote FDI in an oriented and selective way.
Towards this goal, theDeputy PM said it is necessary to develop a mechanism to encourage FDI firms toincrease their capital and reduce loans as well as build a national informationdata system to share information on registration, investment expansion,revenues, profits and production costs of FDI firms.
The building of a specialised system of taxinspection is also needed to handle price transfer more effectively, he added.
He suggested calling for investment according tosectors and fields and encouraging connectivity between domestic and foreignenterprises.
Deputy Minister of Finance Huynh Quang Haireported that Vietnam is now home to 21,400 FDI firms, making up about 3percent of the total businesses in the country.
In 2017, the FDI sector’s revenues increased by28 percent compared to 2016.
The sector accounted for over 70 percent of thecountry’s export-import turnover and 15 percent of the State budget revenues.
However, the attraction of foreign investmentstill has shortcomings, with the flow of FDI mainly focusing onlabour-intensive sectors and areas with favourable natural and socialconditions.
He noted that more than 50 percent of FDIbusinesses have reported losses in the past three years, making the pricetransfer more complicated.
Meanwhile, the FDIsector’s contribution to the State budget is growing at a slower pace than thegrowth rates in pre-tax and post-tax profits (7 percent compared to 19.2percent and 22 percent). The Finance Ministry attributed this to the varioustax incentives granted to foreign investors and big projects in prioritisedindustries and fields. The FDI sector currently enjoys more incentives thanother economic sectors.-VNA
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