HA NOI (VNS)— Prime Minister Nguyen Tan Dung has given the nod for tax incentives to be granted to South Korean giant Samsung Electronics, allowing the company to begin work on a factory expansion project in northern Bac Ninh Province.
|Producing mobile phones at Samsung Electronics Viet Nam. The South Korean mobile producer has been granted tax incentives for its expansion in the northern province of Bac Ninh. — VNA/VNS Photo Duc Tam
The proposal was made by the Ministry of Planning and Investment as a means to boost economic development and create jobs, while contributing to the State revenue.
Samsung Electronics Viet Nam (SEV) will now proceed to expand the factory, investing a total registered capital of US$1.5 billion in the period 2015-20 to turn it into a "Samsung Complex", manufacturing mobile phones, laptops, tablets and other electronic products.
The factory, which opened in 2009, currently covers an area of 100 hectares in Yen Phong Industrial Zone.
SEV already enjoys tax incentives as a Government recognised high-tech firm. They are exempt from paying tax for their first four years of operation, and for the following 15 years they will pay a preferential income tax rate of 10 per cent, compared to the normal 25 per cent.
The expansion project will be granted the same tax incentives that apply to newly-established projects, despite the Law on Enterprises declaring that tax incentives would not be given to expanded investment.
The Prime Minister's decision came as a result of a petition from Samsung and the provincial authorities, who said that the company would face difficulty in carrying out its expansion project without the Government's support.
The Prime Minister also agreed to offer peak incentives to Samsung's investment in a new factory in northern Thai Nguyen Province.
SEV plans to reach a turnover of $10 billion this year and create jobs for as many as 22,000 local workers. — VNS