Vietnam's National Assembly has approved the piloting of unique mechanisms and policies for Buon Ma Thuot, the biggest town in the country’s Central Highlands, for five years starting next year.
Parliament members approved Tuesday a resolution to this effect with nearly 94.4% of their votes. This is the first time that unique policies have been approved for a district-level administrative unit.
Under the resolution, businesses investing in coffee production and processing in Buon Ma Thuot town of Dak Lak province will enjoy corporate income tax (CIT) exemption in the first four years, a 50% reduction in CIT for the next nine years, and a low CIT rate of 10% for 30 years. The normal CIT rate in Vietnam is 20%.
Investors in the areas of farm produce, tourism, culture, healthcare, education and training, production of energy-saving items, renewable energy, logistics, inland container depots, and warehouses are entitled to a CIT rate of 10% for 15 years. Next, they will enjoy an exemption from this tax for four years and a 50% reduction for the next nine years.
While discussing the resolution, some parliament members had proposed considering different levels and periods of incentives to avoid tax evasion and budget losses. In response, NA General Secretary Bui Van Cuong said the incentives would only apply to new projects with investment plans and investment registration certificates approved during the resolution's validity period.
The NA Standing Committee also assigned the Government the task of directing ministries and agencies to inspect and supervise the implementation of the resolution to avoid tax evasion.
The resolution features many incentives to attract talent, including a five-year exemption of personal income tax for experts, scientists, and those with special talent working in the town’s state agencies.
The National Assembly has thus far approved the application of special mechanisms for the cities of Ho Chi Minh City, Danang, Hanoi, Hai Phong, and Can Tho; and the provinces of Thanh Hoa, Nghe An, Thua Thien - Hue, and Khanh Hoa.
Buon Ma Thuot is located in the heart of the Central Highlands, connecting economic hubs in the country's south-central and southeastern regions and the Vietnam-Laos-Cambodia development triangle. It is well known as the nation’s coffee hub.