Long Son Petrochemicals urges ministries to finalize tax preferences

Long Son Petrochemicals Company Limited (LSP) has urged two ministries to aid its Long Son Petrochemicals Complex by finalizing the tax preferences, particularly for material imports, to avoid delays to the project.

In a petition to the Ministry of Finance and the Ministry of Planning and Investment, LSP clarified the 0% import tax for materials which are not available or scarce in Vietnam is crucial for the complex in Ba Ria-Vung Tau province.

The firm added that materials, including propane, butane, naphtha, industrial salt, and coal, were scheduled for arrival in Vietnam in February and documents must be completed in one or two months. However, progress has been delayed due to the unavailability of documents.

The firm is working with customs authorities in the southern province to pass the tax break, however, relevant documents from the Ministry of Finance and the General Department of Customs have yet to be issued.

LSP also urged the ministries to finalize other preferential tax policies stipulated in its sixth investment certificate. They included low corporate income tax (CIT) of 10% over 30 years from the first year of revenue generation, tax exemption for four years, and a 50% reduction for the next nine years from the first year of taxable income.

Another tax mentioned was the most-favored-nation (MFN) tax of 3% for imports of polypropylene, polyethylene, sodium hydroxide, and vinyl chloride monomer (VCM) for 10 years from the date of commercial operations.

Long Son Petrochemicals Complex could enter commercial operation by mid-2023 with construction 98% complete, Tharna Sanee, general director of LSP said on February 24.

Upon operation, the project will employ 1,000 people and contribute VND2.5 trillion ($105 million) to the state budget yearly, the executive added.

LSP is the first integrated petrochemical complex in Vietnam and features plastic products such as 1.35 million tons of olefin and 1.4 million tons of polyethylene and polypropylene a year.

Thailand’s Siam Cement Group (SCG) is the main investor in the 464-hectare facility. The Thai conglomerate started construction of the $5.4 billion complex in the fourth quarter of 2018.

Vietnam now has two operational oil refineries - Nghi Son Refinery and Petrochemical complex in Thanh Hoa province, and Binh Son Refining and Petrochemical (Dung Quat Refinery) in Quang Ngai province, both in the central region.