The Ministry of Trade has recently completed the drafting of a decree of the Government on policies for trade development in mountainous and island areas and places where ethnic minority people live. The draft has new features on priorities given to businessmen and subsidy policies. In particular, under the draft decree, localities will be given more powers. Tran Trong Kim, deputy head of the Department of Mountainous and Border Trade of the Ministry of Trade, had an interview with the mass media about the new features.
There is no longer a corporate income tax priority in the draft decree. How can traders be encouraged to expand their business in remote areas?
In fact, few traders have enjoyed corporate tax priorities under the Decrees 20 and 02 because they fail to meet conditions on accounting, vouchers and invoices, let alone regulations on types of goods, with which enterprises can be qualified for the priorities. As a result, it is too difficult and complicated for enterprises to complete procedures to enjoy the prioirites. Those traders who qualify for the priorities earn low profits, so tax reduction is very low. As a result, most of them do not want to complete procedures for the priorities.
The new draft decree has replaced the priorities with a regulation on assistance for traders based on their value added tax (VAT) revenues. The regulation will help settle the above mentioned difficulties, encouraging traders, who have adequate resources to expand their business activities in remote areas, helping them improve their competitiveness in selling farm-produce and reduce a risk of forcing ethnic minority people to buy necessities at high prices.
Why has the regulation on bank loan priorities for mountainous traders, which were very important in the past, been removed from the draft decree?
This is because we want to provide financial assistance for mountainous traders in form of VAT revenues as I have said above. Also, many traders still enjoy credit priorities under other policies, such as credit for the poor and farm-produce credit assistance.
Under the draft decree, localities will be given with powers to decide places, commodities and budget for price and charge subsidies. How will the policy give a higher effectiveness?
The existing policy proves that some mountainous localities do not need charge subsidies, but they cannot remove the subsidies due to regulations. Therefore, we have strongly decentralised, giving more powers to localities. We will issues policies and supervise the implementation of them. This will help locality concentrate their budget for price subsidies in difficult and underdeveloped areas.
Budget for price and charge subsidies is decided by the Government. In case of lacking budget for their demand, what can localities do?
In that case, localities should prioritise their subsidies for poor people and social policy beneficiaries. The provincial People’s Committees should stipulate limits of quantity of farm-produce and those who are allowed to buy farm-produce with selling price subsidies, or quality of farm-produce and those who are allowed to sell farm-produce with buying price subsidies. The committees’ decision should be made based on the approval of the provincial People’s Councils.
Will opportunities for illegal behaviour be completely removed with the new draft decree?
The decree effective security measures built in. Localities should actively study and implement it effectively and central agencies will supervise only. Provincial People’s Councils should decide on the use of budget for price and charge subsidies and supervise the implementation of regulations on price subsidies. At the same time, even though the draft decree does not mention, the regulations on openness and transparency of policies are stipulated concretely in other documents.
Kim Phuong
Vietnamese
