What should Nghe An do to create sustainable revenue from import and export activities?

The boost

To understand the meaning of this policy, we need to know that, according to the provisions of the Budget Law, 100% of revenue from export, import, and special consumption tax from localities are under the management of the Central Budget. In Nghe An, although the revenue fromimport and export taxesThe annual revenue is not large, but according to calculations, the prospect of revenue from export and import in the period of 2021-2025 is from about 7,770 - 8,500 billion VND. Specifically, in 2021, the Central Government assigned 1,250 billion VND but Nghe An implemented an estimated 1,450 billion, an increase of 16%.

30,000-ton ships can enter and exit Cua Lo Port, but with the current waterway, turning around is very difficult. Photo: Nguyen Hai

According toPilot resolution on special mechanismsFor Nghe An and some new provinces, approved by the National Assembly, if Nghe An makes efforts and collects taxes exceeding the level assigned by the Central Government, it will be able to use 70% of the excess revenue from export, import, and special consumption taxes.

A representative of Nghe An Customs Department shared: This is a great favor that the Central Government has given to the province, but it is also a big challenge. The resolution will only be effective if the province makes efforts to exceed the estimate assigned by the Central Government, then it will be able to proactively use 70% of the excess revenue to invest in infrastructure without waiting for the Central Government's request. From the signal of the past 2 years, despite being affected by the Covid-19 pandemic, Nghe An's revenue from import and export taxes has reached approximately 1,700 - 1,800 billion VND. To effectively utilize the above special mechanism, the province must strive to unblock revenue sources...

Dredging vessels are dredging the channel at Cua Lo Port in April 2021 for ships with a capacity of over 10,000 tons to enter and exit, and to prepare for the construction of wharfs No. 5 and No. 6. Photo: Nguyen Hai

In fact, according to experts, although there are still many difficulties, the potential and revenue from import and export of Nghe An is quite large. Currently, Nghe An goods have reached 128 countries and territories. In addition, with VSIP Hung Nguyen, WHA.Zone Nghe An 1, Hoang Mai 1 Industrial Parks having been invested synchronously, the investment environment is open, land rental prices are highly competitive, so the ability to attract investment is still large. Currently, there are 95 FDI ​​investors investing and doing business and nearly 200 enterprises have export products, so the potential is still large.

In 2021, the province's export turnover is estimated to reach 1.95 billion USD, the highest ever and exceeding the target set by the Resolution of the 19th Provincial Party Congress (the target by 2025 is 1.765 billion USD).

The biomass pellet factory at VSIP Hung Nguyen has a capacity of over 300,000 tons of products exported to European countries, so if the infrastructure is good, it will bring in export tax revenue. Photo by Nguyen Hai

In recent years, thanks to the upgraded transport and warehouse infrastructure, a number of specialized seaports put into use, Cua Lo Port regularly dredged and invested in additional wharves, so the loading and unloading capacity of Cua Lo Port has been significantly increased. From mainly exporting white stone, wood chips, and seafood, up to now, Nghe An's export products have become more diverse and valuable... In the area, there are products that bring in large export and import tax revenue for the province. Typically, the petroleum products of DKC Company, Nghe An Petroleum Company earn over 1,600 billion VND per year, Vissai Group earns 50-100 billion VND per year...

Solving infrastructure problems, creating sustainable revenue

According to experts, with the advantage of being a large province, located in the center of the North Central region, having a border gate with Laos and a diverse source of goods, Nghe An's export turnover must be larger and its annual growth rate and revenue must be high. However, due to limited transport infrastructure, logistics services and especially port loading and unloading capacity, it has not been able to make a breakthrough.

If regularly dredged and the residential fishing port area is moved to a separate area, Cua Lo Port will be safer and more effective. In the photo: Fishing boats anchored in the general port. Photo: Nguyen Hai

Currently, the province has Thanh Thuy International Border Gate, which is a point near the East-West economic corridor, from the East Sea (Vietnam) through Cua Lo Port to Laos, Thailand and Myanmar, but this border gate has not been opened for trade so there are no transactions.Cua Lo Portnear National Highway 1A and the Southeast Economic Zone but there is no traffic axis connecting to large industrial parks, and no warehouse large enough to attract goods imported and exported through the port.

Currently, many units supplying materials and equipment for industrial zones in Nghe An cannot dock at Cua Lo port to deliver goods but must import them to Hai Phong port and then go by road to Nghe An. On the contrary, some of the province's export goods are transported directly to Nghi Son or Hai Phong port to reduce transit costs... This is regrettable and reduces the province's export tax revenue.

(Representative of the Southeast Economic Zone Management Board)

Trucks waiting for customs clearance at Nam Can International Border Gate (Ky Son). According to Nghe An Customs Department, due to the impact of the Covid-19 pandemic, the volume of goods passing through the port has decreased sharply in the past two years, affecting import and export tax revenue. Photo: Nguyen Hai

At the forum to contribute ideas to the planning of Nghe An province's seaports until 2030 and vision to 2045, Mr. Le Tien Tri - Head of the Management BoardSoutheast Economic ZoneFrankly: The Southeast Economic Zone near Cua Lo Port is convenient, but the advantage is no longer obvious. The reason is that the capacity for large ships to dock and unload is limited. The port only ensures that 10,000-ton ships can enter and exit, while ships over 20,000 - 30,000 tons must wait for the tide or anchor outside for transit, causing costs to increase. Cua Lo Port is an international port, but it does not have a suitable warehouse system or logistic services. The traffic system is not connected to large industrial parks, and cannot operate continuously 24/24 hours...

On the other hand, compared to other provinces in the region, Nghi Son Port or Vung Ang Port both have natural deep-water ports, each province has its own support policy for goods and equipment going inland calculated by container. Therefore, while the cargo handling capacity of ports in the region has increased sharply, the volume of goods passing through Cua Lo Port has not increased much andexport tax, import tax does not increaseas expected.

Vissai seaport. Photo: Manh Hung

Therefore, the question for Nghe An when implementing the special Resolution is to find a solution to increase the volume of imported and exported goods. According to experts, there is no other way but for the province to clearly identify priority items to remove "bottlenecks" in traffic infrastructure, warehouse services,logistics servicesAppropriate seaports to increase the amount of imported and exported goods to ports and border gates, and facilitate loading, unloading, and storage.

In addition, to increase competitiveness and attract goods, the province needs to consider policies to support businesses when exporting and importing goods through the port by reducing wharf and storage costs. On the one hand, investing in improving the capacity of general ports to load and unload goods, but the province should also have reasonable and flexible incentive policies for large corporations such as TH and The Vissai to invest in specialized ports.

Hopefully, along with positive signals of economic development and investment attraction in industrial zones, the volume of goods and equipment imported and exported through our province's ports will increase, thereby helping Nghe An have more surplus revenue to reinvest in upgrading essential infrastructure./.