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Agriculture companies seek tax breaks for R&D

Update: July, 04/2015 - 11:26

Workers at a laboratory at Ho Chi Minh City's High-Technology Agricultural Centre. At a workshop held in Ha Noi on Thursday, Agriculture Minister Cao Duc Phat called on enterprises to play a key role in applying and transferring new technologies to restructure the agriculture sector. — VNA/VNS Photo Manh Linh

HA NOI (VNS) — Private enterprises say they need further policy incentives and simpler legal documentation in order to invest in research and transfer of agricultural technologies.

At a workshop organised by the Ministry of Agriculture and Rural Development in Ha Noi on Thursday, they said the lack of tax breaks and weak intellectual property protection made them hesitant to expend funds on applying advanced agricultural technologies in the country.

Workshop participants noted that almost all the research in agricultural technology in the country has been carried out by Government agencies and institutes.

One of the participants, the Thai Binh Seed Joint Stock Company (Thaibinhseed), is among the few Vietnamese firms that have carried out independent research.

In 2007, the company set up 52ha research and development centre that focused on generating new plant varieties. So far, it has been able to create ten plant varieties that have been recognised and accepted for cultivation nationwide. The company is now one of 18 hi-tech agricultural firms businesses of the country.

As a result of its achievements, the company has received a 10 per cent reduction in income tax since 2013, saving it tens of billions of dong that it says it invested in research. Recently, the provincial Tax Department said it would grant the company land tax exemption until 2020 if it used the exempted money for research and development.

However, Tran Manh Bao, the company's general director, told the workshop that complicated legal documents made it difficult to seek State support. The company had examined the two laws, 14 decrees and five circulars, but still did not know how to do this.

Bao also said that the company was facing difficulties in registering the copyright for their new products. He said the company spent several years testing new products, but when they were piloted in the market, they face competition from counterfeits.

The State should help establish better links between State-run research institutes and enterprises to exploit better the advantages both sides have in terms of human resources, funds, technology and equipment, Bao said.

He said new products developed by State Budget funds should not be sold to a single enterprise, but opened up for use by all capable enterprises.

At the same time, when an enterprise has produced a new plant variety, the State should not recognise similar varieties in order to avoid counterfeits in the market.

Nguyen Kim Thuan, deputy director of the Viet Nam Maize Development and Investment company, said that the state should offer land tax incentives to businesses researching and investing in science and technology to help them build infrastructure and expand production.

Nguyen Van Cuu, director of Cuu Dung, a private firm in Nam Dinh Province, said sometimes the research carried out by State-funded institutes could not be applied in real life.

He said that in 2003, the Research Institute of Aquatic Products 1 transferred to his enterprise a breeding technique for mollusks. But the firm found it difficult to apply it on a large scale. When they imported the technique from China, company staff were able to learn it and transfer it to other farmers. Eventually, 61 private mollusk farms in the region were able to meet 85 per cent of domestic demand. Since 2014, they have even exported mollusks to China.

Agriculture Minister Cao Duc Phat said that enterprises should play a key role in applying and transferring new technologies under ongoing efforts to restructure the sector.

He said that over the last years, several businesses had taken the initiative and invested in the research and applying advanced technology to produce new plant varieties and animal breeds. However, such participation was still modest, he added.

In response to suggestions made by enterprises at the workshop, he said that the Ministry would look for efficient solutions to encourage more active participation of the private sector in research and development.

The Ministry would complete soon all necessary policies and mechanisms, including tax breaks and interest rates. — VNS



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