Prime Minister Nguyen Tan Dung has given the nod for tax incentives to be granted to giant Samsung Electronics of the Republic of Korea, allowing the company to begin work on a factory expansion project in northern Bac Ninh province.

The proposal was made by the Ministry of Planning and Investment as a means to boost economic development and create jobs, while contributing to the State revenue.

Samsung Electronics Vietnam (SEV) will now proceed to expand the factory, investing a total registered capital of 1.5 billion USD in 2015-20 to turn it into a "Samsung Complex", manufacturing mobile phones, laptops, tablets and other electronic products.

The factory, which opened in 2009, currently covers an area of 100 hectares in Yen Phong Industrial Zone.

SEV already enjoys tax incentives as a Government recognised high-tech firm.

They are exempt from paying tax for their first four years of operation, and for the following 15 years they will pay a preferential income tax rate of 10 percent, compared to the normal 25 percent.

The expansion project will be granted the same tax incentives that apply to newly-established projects, despite the Law on Enterprises declaring that tax incentives would not be given to expanded investment.

The Prime Minister's decision came as a result of a petition from Samsung and the provincial authorities, who said that the company would face difficulties in carrying out its expansion project without the Government's support.

The Prime Minister has also agreed to offer peak incentives to Samsung's investment in a new factory in northern Thai Nguyen province.

SEV plans to make a turnover of 10 billion USD this year and create jobs for as many as 22,000 local workers./.