VietNamNet Bridge – Foreign direct investment (FDI) enterprises attending a dialogue with HCMC’s leaders on March 16 complained about complicated administrative and customs procedures and inadequate regulations.

HCMC Party chief Dinh La Thang (R) shakes hands with Hirotaka Yasuzumi of the Japan External Trade Organization in HCMC before the dialogue in the city on March 16 – Photo: Tran Luc

The dialogue between the city and FDI enterprises was chaired by HCMC Party secretary Dinh La Thang and People’s Committee chairman Nguyen Thanh Phong.

Herb Cochran, executive director of the HCMC Chapter of the American Chamber of Commerce in Vietnam (AmCham Vietnam), said an AmCham member who registered to operate in HCMC 11 years ago had opened a plant in the Mekong Delta city of Can Tho.

Can Tho’s management of industrial parks granted an investment certificate plus tax incentives for the firm, Cochran said. However, the HCMC Department of Tax did not recognize that certificate, insisting the company still has to pay taxes to the department.

Cochran said the HCMC government should take appropriate steps so that the department will not collect taxes from the AmCham member company’s project in another locality. And if the problem cannot be solved locally, the city government should ask central authorities in Hanoi to make a decision.

Tran Thi Le Nga, deputy director of the HCMC Tax Department, said an investment certificate does not include tax incentives, which are offered based on the tax law. The Can Tho industrial parks authority got it wrong when listing tax incentives in the certificate with the time of validity longer than permitted, Nga explained.

According to Nga, after the case was sent to the Ministry of Finance, the ministry replied in a document that tax incentives must be based on the tax law.

She said a dozen enterprises had encountered the same problem, and that enterprises must ask the Prime Minister for approval for tax incentives.

However, HCMC Party chief Thang said management agencies must work together to solve the problem, instead of ignoring enterprises’ concerns. Ministries and agencies should actively solve problems first, he said, adding not all things should go before the Prime Minister.

According to Nguyen Van Be, chairman of the association of business at industrial parks and export processing zones in HCMC, sub-licenses still abound, making life difficult for investors.

With customs procedures, Be said though the one-stop-shop customs mechanism has been introduced, businesses still have to navigate through multiple doors in other stages.

Enterprises bemoaned legal changes, saying they could be easily fined if they are unaware of those changes.

Explaining this issue, deputy head of the HCMC Customs Department Nguyen Huu Nghiep said Vietnam has intensified international integration, hence legal changes.

Nghiep said six ministries had joined the national one-door system. Only 28% of the customs clearance process relates to customs procedures while the remaining time involves other ministries and agencies.

The ban on imports of used machinery and equipment is another major concern. Under the Ministry of Science and Technology’s Circular 23 with effect from July 1, used machinery that is over ten years old will be banned from import.

Both AmCham Vietnam and the Japanese Business Association of HCMC (JBAH) requested the ministry to rescind the circular.

According to Cochran, manufacturing equipment and machinery for semiconductors, automotive and aviation projects can be used for 20 years or longer as they are constantly maintained. The circular also violates the WTO Technical Barriers to Trade Agreement by setting an arbitrary, non-science-based restriction on imports.

Cochran said management agencies should use a risk management strategy to solve problems rather than prohibit import of all machinery and equipment older than ten years.

Motohisa Nakagawa from JBAH shared the view, saying the regulation discourages Japanese investors from doing business in Vietnam.

Speaking at the dialogue, the city’s Party chief said the city would look into the problems mentioned.

Quoc Hung

SGT