Long Thanh Airport Project: Concerns about funding

On the afternoon of October 8, after hearing the Government report on the investment policy for the construction of the Long Thanh International Airport (LIA) project, opinions in the Standing Committee of the National Assembly were concerned about the funding source for the project, estimated at about 20,000 billion VND.

Perspective of Long Thanh International Airport. Photo: IE

In the review report presented by the Deputy Chairman of the National Assembly's Economic Committee Nguyen Van Phuc, it was stated: The Standing Committee of the Economic Committee believes that with the huge cost of compensation, support and resettlement using state budget capital (about 20,000 billion VND) and implemented in a short time, it will lead to very difficult capital balance" - Mr. Phuc emphasized. Another shortcoming was also pointed out that the unit price applied for compensation and support still applies the previous regulations of Dong Nai province. Therefore, it is necessary to calculate according to the specific land price determined on the basis of the 2013 Land Law and the Decree detailing and guiding the implementation of the law that has come into effect to avoid incurring site clearance costs when implementing the project.

The National Assembly's Economic Committee also pointed out that the Investment Report on the Construction of Long Thanh International Airport has not yet assessed the competitiveness of other large airports in the region. Currently, countries in the Southeast Asian region have successively put into operation large, competitive international airports to play a transit role in the region such as Suvarnabhumi International Airport - Thailand (planned for 100 million passengers/year), Kuala Lumpur - Malaysia (planned for 100 million passengers/year), Changi - Singapore (planned for 135 million passengers/year). After completion, Long Thanh International Airport will be able to compete and attract passengers from other airports in the region.

The investment report of Long Thanh International Airport project shows the total investment in phase 1 is about 164,589 billion VND, of which: State capital including state budget, government bonds and ODA is 84,624 billion VND, other capital is 79,965 billion VND.

"The report must explain to the National Assembly where the money for construction comes from. The source of government bonds was closed by the National Assembly in 2015," said K'sor Phuoc, Chairman of the National Assembly's Ethnic Council. Sharing the same view, Vice Chairman of the National Assembly Uong Chu Luu emphasized: The report needs to clarify the feasibility of the capital sources for project construction. Regarding the site clearance for project implementation, Mr. Huynh Ngoc Son, Vice Chairman of the National Assembly, suggested that it should be done correctly and appropriately to avoid complaints from people whose land was recovered.

Previously, the National Assembly Standing Committee gave opinions on the draft Law amending and supplementing a number of articles of tax laws.

Through discussion, the National Assembly Standing Committee agreed with the necessity of amending and supplementing tax laws as stated in the Government's Submission and said that in the face of complicated developments in the world and regional economy, negatively affecting Vietnam's socio-economy, the number of enterprises facing difficulties, dissolution, bankruptcy or cessation of operations has increased.

Chairman of the National Assembly's Finance and Budget Committee Phung Quoc Hien presented a report on the review of the draft Law amending and supplementing a number of articles of the Tax Law. Photo: VNA

The implementation of relevant legal regulations is still facing many difficulties; administrative procedures are still cumbersome, tax payment time is high compared to other countries in the region, causing difficulties for businesses and people. Therefore, it is necessary to submit to the National Assembly for approval the Law amending and supplementing a number of articles of the Tax Laws.

According to the Head of the National Assembly's Petition Committee Nguyen Duc Hien, the Law amending and supplementing a number of articles of tax laws will support agricultural and rural development, focus on exploiting and making good use of the advantages of agriculture; reasonably encourage the development of state budget revenue, while strengthening tax management, combating transfer pricing, and effectively implementing amendments and supplements to the Law on Special Consumption Tax.

However, in order for the National Assembly to have sufficient grounds to pass the draft Law, many opinions suggest that the Government needs to have a report assessing the impact of the draft Law comprehensively on the socio-economy in general, as well as on income, employment, and people's lives, especially the impact on the recovery and development of the business system when this policy comes into effect.

Discussing the regulation on controlling advertising expenses, the National Assembly Standing Committee unanimously chose option 1, which is to "remove the regulation on controlling advertising and promotional expenses in the Draft Law."

According to the delegates, removing the regulation on controlling the rate of advertising costs will create a healthy competitive environment and attractiveness of the investment environment in Vietnam. At the same time, it is consistent with the common practices of countries around the world and creates favorable conditions for the negotiation steps of the Free Trade Agreement between Vietnam and countries around the world. However, it is recommended that the Government direct competent agencies to strengthen the management of costs for production and business and strictly handle fraudulent acts in accounting for advertising costs to evade taxes.

Regarding the addition of corporate income tax incentives for supporting industries, the National Assembly Standing Committee agreed with the Government's proposal and said that currently, the development of supporting industries is of great significance to the industrialization and modernization process of Vietnam; supporting industries are still weak, unable to meet the development needs of automobile and motorbike manufacturing and assembly industries; textile and garment industries, footwear industries, etc.

Therefore, it is necessary to have preferential policies to create conditions for Vietnam's manufacturing industries to have a high localization rate, competitive products in the market and for export, and to attract investment.

However, it is necessary to carefully review the scope and subjects of the list of supporting industries, ensuring comprehensiveness for industries and supporting industrial products that need incentives, in line with the planning orientation for Vietnam's industrial development in the coming period.

Regarding the addition of tax incentives for investment projects with a minimum investment capital of VND 12,000 billion, the majority of opinions of the National Assembly Standing Committee agreed with the Government's Proposal.

However, it is recommended that the Government clarify a number of issues such as clarifying the concept and criteria of "advanced technology, modern techniques" to avoid accepting projects with outdated technology that other countries need to replace and transfer to invest in Vietnam.

The regulation of applying tax rates and preferential periods of up to 30 years for all projects over 12,000 billion VND is too long for a project, while currently technology in the world is developing very quickly and is constantly being innovated and replaced, extending the tax incentive period may lead to businesses being slow or not investing in technological innovation...

According to Chairwoman of the Committee on Social Affairs Truong Thi Mai and Chairman of the Ethnic Council K'sor Phuoc, the Law amending and supplementing a number of articles of tax laws should be recalculated at a reasonable time and priority should be given to industries that Vietnam is lacking, products that promote internal strength and are competitive. As for investment projects with old technology, careful consideration should be given.

Head of the National Assembly Office Nguyen Hanh Phuc proposed that there should be conditions for projects using advanced technology and modern techniques, but regulations on their use at the time of project investment would make the Law stricter.

Regarding additional corporate income tax incentives for enterprises investing in agriculture and rural areas, the National Assembly Standing Committee basically agrees with the Government's Proposal.

However, the tax rate of 20% is only applied for 2015, not for 2014 as stated in the Government's Proposal. It is recommended that the Government evaluate and review all incentive policies and investment attraction policies for the agricultural, rural and farmer sectors, ensuring that the issuance of incentive policies will create strong changes in agricultural production; attracting financially capable enterprises to invest in the agricultural and rural sectors.

According to danviet.vn/vietnam+