Investment for Environment-friendly Technologies

According to this project result, regular investment and spending for environmental protection account for a small share in a company’s total investment and expenditures for business.

 

The project surveyed the current status of investment for environment-friendly technologies by 357 companies in Bac Ninh, Thai Nguyen and Quang Ninh provinces which have a lot of industrial parks that need emergent environmental protection measures.

 

Companies surveyed are mainly engaged in processing and manufacturing industries. They are also typical of making huge investment in production technologies and dumping huge wastes that need to be treated to keep the environment unharmed.

 

The survey shows that nearly 40 per cent of respondents have invested in environmental protection and had regular costs for this activity. 74 per cent of them spend less than 10 per cent of initial investment capital for environmental protection investment.

 

The average rate of recurrent costs for environmental protection accounts for just over 1 per cent of total production and business costs.

 

Nearly 70 per cent of respondents renovated technologies once since their inception. Among them, 30 per cent imported Chinese technologies. Companies shifted to environment-friendly technologies were the minority, accounting for only 22 per cent of nearly 360 businesses surveyed.

 

The survey result revealed that companies investing in technological innovation accounted for a modest rate. The rate in pollution-prone metal production and metal fabrication industries was even much lower.

 

Meanwhile, in spite of having a plenty of preference and support policies for investment in environment-friendly technological upgrading, the efficiency is modest due to inconsistency, overlapping and impracticality.

 

The cause is blamed on time-consuming administrative procedures, insufficient guidance, slow fund disbursement and strict criteria. Moreover, policies become improper when they are applied in localities.

 

The project put forth some policy suggestions like piloting the formation of “green” banks which will fund environment-friendly technological upgrading; connecting credit institutions and businesses in granting finance for environment-friendly technological renovation; and promoting operating roles of environmental protection funds and guaranteeing credits for enterprises.

 

According to Circular 212 issued by the Ministry of Finance, companies are entitled a lot of tax incentives. Their investment for environmental technologies is accounted to tax-deducted expenses at the time of calculating taxable income. Such expenses include spending on product promotion for environmental protection, recovery and processing of waste products; spending on production and distribution of films, TV shows and scientific reports featuring environmental protection; and spending on supply of free tools for people to classify household waste and waste products at source. Corporate income tax from new investment projects is exempt in four first years and reduced by 50 per cent in the next nine years. A preferential tax of 10 per cent is applied in 15 years to incomes earned from 11 types of new investment projects.