Experts oppose tax exemption

June 14, 2016 - 09:00

Some experts expressed concerns about business inequality after the Ministry of Finance asked the Government to exempt automobile import duties for a tourism investor in the northern province of Ninh Bình.

A view of the Trang An eco-tourism and Bai Dinh Pagoda complex that is invested by construction company Xuan Truong in Ninh Binh Province. — Photo

HÀ NỘI — Some experts expressed concerns about business inequality after the Ministry of Finance asked the Government to exempt automobile import duties for a tourism investor in the northern province of Ninh Bình.

According to the local press, construction company Xuân Trường wanted to import 20 “specialised vehicles”, with 30-50 seats each, for use in the Tràng An eco-tourism and Bái Đính Pagoda complex that it invested in.

The firm planned to buy the vehicles to supplement its fixed assets, and petitioned the ministry for the tax exemption for them last March and May. The ministry reportedly asked Prime Minister Nguyễn Xuân Phúc for a decision about the case this month.

In a document sent to the PM, the ministry said the project of Xuân Trường was located in an area with tough socio-economic conditions, and companies in this area enjoyed preferential corporate income taxes.

The Tràng An – Bái Đính complex covers parts of Hoa Lư and Gia Viễn districts and Ninh Bình City. Gia Viễn particularly faces economic difficulties.

The ministry also said that the company was going to buy automobiles of a type that could not be built domestically now, so they should enjoy preferential tariffs, in accordance with Article 12 in Decree No 87/2010. The vehicles were expected to meet European emission standard Euro 5.

The ministry added that the tourism complex had been recognised by the United Nations Educational, Scientific and Cultural Organisation as a world natural heritage site. The site attracted up to 120,000 visitors per day in good seasons, driving socio-economic growth and generating jobs for thousands of local workers.

According to the ministry, the company undertook to use the vehicles to serve the traveling demands of visitors only inside the tourism complex free of charge, for a non-profit purpose. Therefore, a tax exemption would “facilitate tourism development” and “promote the image of Việt Nam”.

“I don’t understand what the Ministry of Finance has based their support on for such proposal of Xuân Trường Company,” economist Phạm Chi Lan told news website

“Việt Nam has many tourism complexes. If incentives are given to Xuân Trường, will other companies receive the same things? This is likely to cause unfair and unhealthy competition among them,” she said.

Lan said Tràng An – Bái Đính was a tourist site and visitors must pay for services there. Xuân Trường was purely doing business, not charity or any public service. The Government should not accept its proposal, she said.

She said it was not a matter whether 20 vehicles were a small or great number. “Even one đồng worth of tax exemption should be rejected, if it is unreasonable.”

Lan said it was not the right time now for the ministry to do a company a favour, in a context that the country was fostering an equal business environment.

“I support Deputy Minister of Finance Đỗ Hoàng Anh Tuấn who has been very determined about improvement efforts every time he talked about Resolution 19,” she said, referring to a resolution that the Government has issued for the third year in a row asking for action plans to enhance competitiveness in the business sector.

“There are many things worth doing now to improve the business environment, especially tax affairs related to the numerous enterprises, especially small and medium-sized companies.

“In my opinion, the Ministry of Finance should concentrate on common matters of the business community. It shouldn’t look after a few major businesses,” she said.

Lê Đăng Doanh, the former director of the Central Institute for Economic Management, said no single enterprises should be favoured unless it was actually necessary to have special policies for a struggling business.

This is in line with the spirit of Resolution No 35/NQ-CP, which the Government issued last month on supporting and developing enterprises by 2020.

“Public opinion and other businesses will question why the Ministry of Finance favours a large business like Xuân Trường, and what lies behind this move,” he told

As to the project of Xuân Trường located in a socio-economically tough area, Doanh argued that many companies were operating in even tougher districts. He said business associations should raise their voices about the issue to prevent an unfair precedent that may lead to more “beg and give” circumstances in the future.

Another economist, Ngô Trí Long, emphasised with Pháp luật Thành phố Hồ Chí Minh (Hồ Chí Minh City Law) online that a fair and equal environment plays a vital role in a market economy. Without it, there will be big doubts inside the business community.

Xuân Trường Director Nguyễn Văn Trường is known as a tycoon from Ninh Bình, who chairs the Hoa Lư Tourism Joint Stock Company and directs Hoa Lư Hotel.

Xuân Trường is reportedly investing in several tourist sites in other northern provinces, including the VNĐ15 trillion (US$666.7 million) Núi Cốc Lake complex in Thái Nguyên, the VNĐ10 trillion Cái Tráp Island complex in Hải Phòng, and the VNĐ11 trillion Tam Chúc complex in Hà Nam. — VNS