Tuesday, September 26 2017

VietNamNews

NA deputies continue to debate amendments to Enterprise Law

Update: May, 29/2013 - 09:04
Workers at an automobile and motorbike components production line run by the Japanese-invested Exedy Viet Nam Co Ltd in the northern province of Vinh Phuc. Foreign invested firms operating under the Foreign Investment Law in the country have a number of options on whether to re-register their operations. — VNA/VNS Photo Hoang Hung

HA NOI (VNS)— A majority of the NA deputies agreed with the amendments to Clause 2 under Article 170 of the 2005 Enterprise Law proposed by the Government.

The clause prescribes that foreign invested firms operating under the Foreign Investment Law in Viet Nam can either re-register for operations and management in accordance with the Enterprise Law or decide not to re-register.

Those who decide not to renew their registration will have their business operations limited to the activities specified in their investment licences.

The amendments also provide a legal framework for those who failed to re-register to broaden their activities in Viet Nam.

Some suggested that the re-registration deadline in Article 2 be removed so that businesses could register at their convenience.

According to deputy Do Van Ve, if this law was not amended, FDI enterprises would face many difficulties, such as not being able to expand into other areas of business. This amendment, he said, would help businesses to expand and diversify.

Deputy Cao Sy Kiem said that while many enterprises did not observe the law, FDI businesses had made great contributions to the growth of the country's economy overall.

For instance, he added, in the last two years, the FDI sector had significantly helped export growth.

"Therefore, we had to make full use of contributions from the FDI sector," he said.

The deputy added that the amendment should classify what kind of businesses needed to change or expand.

In addition, Viet Nam needed to study what was being done in other countries and apply the lessons learned to domestic businesses as soon as possible, said Kiem.

Deputy Nguyen Thi Kim Ngan agreed, saying that Article 170 should be revised without waiting for amendments to the 2005 Enterprises Law.

If the registration deadline for FDI enterprises was removed, FDI businesses would not have to come back home and could continue their investment in Viet Nam, thus helping generate jobs for local people, Ngan said.

The Enterprise Law was passed by the National Assembly on November 29, 2005 and came into effect from July 1, 2006.

July 1, 2011 was the deadline for re-registration. Among 6,000 FDI enterprises, 2,916 businesses had re-registered, while 3,000 businesses were yet to re-register under Clause 2. These businesses have total registered capital of US$18.5 billion and employ 446,000 people.

In the afternoon, the NA deputies continued to discuss draft amendments to the Value Added Tax Law (VAT).

Most deputies agreed that these were needed in order to improve the existing law and ensure the consistency and uniformity of the legal system.

Deputy Tran Van Huynh said VAT for social housing sale and lease would be cut in half in a move to solve problems for the real estate market and assist those who need housing, while also stimulating demand and reducing property inventories.

However, many deputies worried that big apartments would be split into smaller 70 sq.m flats, negatively impacting urban planning, design, architecture, population density and traffic.

The draft bill also prescribes a turnover-based threshold for VAT under the credit method. The threshold will likely be about VND1 billion ($47,620). All businesses with turnover above this threshold must pay VAT under the credit method.

Deputy Tran Van Huynh asked the NA to lower the threshold for VAT registration because the number of businesses subject to this threshold was huge, yet there had not been any progress in the management of VAT.

Deputy Do Van Ve said all businesses were now applying the credit method. However, each business had a different financial capacity and a different level of professionalism. Very small enterprises always faced difficulties in applying this credit method, meaning tax declaration procedures were more expensive for them to follow. Ve asked the NA to simplify the procedure for these smaller enterprises.

Deputy Nguyen Thanh Hai said one of the aims of the tax reform strategy between 2011-2020 was to reduce the number of non-taxable items, currently an "unreasonable" 25.

Modernising firefighting

The Government should invest more in modernising firefighting and prevention facilities and improving human resources, especially in nuclear power plants and areas at risk of forest fire, they said.

Deputy Le Thi Nguyet from northern Vinh Phuc Province said that fires were increasing due to inadequate awareness about firefighting and prevention. Therefore, in addition to investing in firefighting facilities, each province and city should allocate funds to educate community members.

Deputy Le Quoc Binh from Ha Noi said that the law should include fire prevention regulations for organisations and individuals, as well as apartments and other high buildings.

Deputy Tran Thanh Hai from HCM City said that the law should make clear the responsibility of each household to prevent fires, as there were 434 fires in HCM City in the past three years, of which 43 per cent were in residential areas and 66 per cent were caused by electricity.

Yesterday, deputies also heard the Government's statement on the plant protection and quarantine bill. — VNS


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