Innovative, non-stereotypical, selective policy, taking advantage of latecomers

Create maximum convenience for organizations and individuals

Presenting the draft Resolution, Minister of Finance Nguyen Van Thang said that the draft Resolution of the National Assembly on the International Financial Center in Vietnam was built with specific and outstanding mechanisms and policies with the aim of perfecting the legal framework.

Thereby, building and developing the International Financial Center, located in Ho Chi Minh City and Da Nang, to become a leading international financial center, operating according to advanced international standards, connecting with major markets and financial centers in the world, thereby enhancing Vietnam's position in the global financial network.

Vice Chairwoman of the National Assembly Nguyen Thi Thanh speaks at the meeting. Photo: Ho Long

Promote sustainable finance, encourage the development of green financial products, contribute to sustainable socio-economic development; facilitate the connection of domestic and international trading floors, promote capital flows and financial technology into Vietnam; attract and develop high-quality human resources, domestic and foreign experts in the fields of finance and support services to work at the International Financial Center.

The Minister also said that institutionalizing the Politburo's policy, based on the experience of a number of countries, the draft Resolution stipulates 12 policy groups to create a legal framework to attract investment and promote business activities in the International Financial Center in various fields.

Specifically, including policy groups: foreign exchange, banking activities; finance, capital market development; tax; entry, exit, residence, labor for experts, investors and employment policies, social security; land; construction, environment and fire prevention and fighting; controlled testing policies for Fintech and innovation; preferential policies by sector and policies for strategic investors; development of technical infrastructure and social infrastructure; export, import and distribution of goods and services; policies on fees and charges; dispute resolution in business investment activities.

Vice Chairman of the National Assembly Tran Quang Phuong speaks at the meeting. Photo: Ho Long

“The draft Resolution stipulates a number of necessary administrative procedures to implement specific mechanisms and policies in the operation and development of the international financial center. The content of administrative procedures is regulated in a simple manner, creating maximum favorable conditions for organizations and individuals to participate in the development of the international financial center,” the Minister emphasized.

In the preliminary review report on the draft Resolution, Chairman of the Economic and Financial Committee Phan Van Mai said that the Draft Resolution dossier basically meets the conditions to be submitted to the National Assembly at the upcoming Ninth Session.

However, the Standing Committee of the Economic and Financial Committee suggested that the Drafting Agency clearly assess whether the policy groups as in the draft Resolution are sufficient premises to create a legal framework for the formation and operation of the International Financial Center or not? Are the regulations strong enough, attractive enough, and ensure competitiveness? It is necessary to clarify which policies are considered to be superior and uniquely different in Vietnam.

Vice Chairman of the National Assembly Vu Hong Thanh speaks at the meeting. Photo: Ho Long

Regarding specifics, the Standing Committee of the Economic and Financial Committee believes that the operation of the International Financial Center in Vietnam is a new issue, so the Resolution should only regulate general issues, principles and clear contents with high stability. The Government and the Prime Minister, within their authority, should issue specific instructions to ensure flexibility and timeliness. Decentralize to the 2 Cities the contents related to local functions, tasks and powers, ensuring the right to be proactive, flexible and creative according to the law.

Chairman of the Economic and Financial Committee Phan Van Mai speaks. Photo: Ho Long

Regarding the establishment of an international financial center located in two cities, the Standing Committee of the Committee requested that the Drafting Agency report more clearly on the basis and foundation for proposing a new model different from Conclusion 47-KL/TW of the Politburo. Clarify the model, relationship, and independence between the two facilities located in two places; and the state management agency for these two facilities.

And, based on the specific characteristics of each city (Ho Chi Minh City and Da Nang), the Standing Committee of the Committee proposes that the Resolution may stipulate a general policy, but sub-law documents should have corresponding regulations to promote the potential and unique strengths of each facility; there should be regulations on coordination mechanisms to bring about overall effectiveness. In organizing implementation, it is necessary to improve management and control efficiency to ensure healthy competition.

Tax incentives need to be in line with international practices to avoid legal conflicts.

The members of the National Assembly Standing Committee highly appreciated the agencies' coordination and determination to build a legal framework and institutions to form and develop an international financial center in Vietnam; approved the formation of an international financial center in Vietnam and submitted the draft Resolution to the National Assembly for consideration and decision at the upcoming 9th Session.

Some opinions suggested that the Government clarify that the 12 groups of policies stipulated in the draft Resolution are sufficient premises and legal basis for the formation and operation of the International Financial Center; the regulations are sufficient to create competition in an environment with more than 100 international financial centers; clarify which are the breakthrough, outstanding, and different policies of the International Financial Center in Vietnam; supplement information on the current state of the capital market in our country, strategic investors, and modeling of this center...

Concerned about the tax incentives stipulated in Article 20 of the draft Resolution, Vice Chairwoman of the National Assembly Nguyen Thi Thanh agreed with the breakthrough regulations on incentives on corporate income tax, personal income tax and value added tax... to attract investors, organizations and individuals to participate in the activities of the International Financial Center.

Minister of Finance Nguyen Van Thang presents the Draft Resolution. Photo: Ho Long

However, the tax incentives stipulated in the draft Resolution are relatively deep and quite high. Therefore, the Vice Chairman of the National Assembly noted that if not accompanied by specific binding conditions, it could create a risk of inequality among business groups. When a business in a financial center receives too much incentive without a commitment to contribute commensurately to the economy, while domestic businesses are still having to fully comply with tax obligations, it will affect the competitive environment.

Emphasizing the important role of taxes in contributing to income regulation, social justice, and narrowing the gap between rich and poor in society, Vice Chairwoman of the National Assembly Nguyen Thi Thanh said that, with many other incentives on immigration policies, foreign currency use, and capital market development stipulated in the draft Resolution, the preferential tax policy raises concerns about the large gap in equality between enterprises. Therefore, the Government needs to carefully review, although there needs to be a superior mechanism, it is necessary to ensure compliance with international practices and avoid legal conflicts.

Regarding the model of the financial center, the draft Resolution stipulates the establishment of an international financial center located in two cities (Ho Chi Minh City and Da Nang). Vice Chairman of the National Assembly Tran Quang Phuong asked: Is the design of the model of the international financial center in Vietnam in the direction of making Ho Chi Minh City a global financial center and Da Nang a regional center, or is it a dual model, that is, the international financial centers in Ho Chi Minh City and Da Nang will do different jobs, not competing between the two centers, only competing internationally based on their strengths?

Vice Chairman of the National Assembly Tran Quang Phuong suggested that the Government should clarify the model of the International Financial Center in Vietnam and the policies applied to the proposed model; clearly explain whether the construction of a Resolution of the National Assembly is capable of providing mechanisms and policies that are comprehensive enough to form and develop an International Financial Center or not?...

Concluding this content, Vice Chairman of the National Assembly Vu Hong Thanh suggested that the Government accept the opinions of the National Assembly Standing Committee to complete the draft Resolution dossier, especially adding documents providing information on issues of interest to the National Assembly Standing Committee.

Vice Chairman of the National Assembly Vu Hong Thanh also emphasized that the proposed policies applied in the international financial center need to be innovative, not stereotyped, selective, and take advantage of the advantages of later-coming countries to apply good international experience, overcome limitations and create international competitiveness.

At the same time, it is necessary to supplement international experiences; have effective state management, inspection and supervision mechanisms; control risks to ensure security, financial safety, political stability, social order and safety, national defense, security and foreign affairs...

Thanh Hai

Source: https://daibieunhandan.vn/chinh-sach-dot-pha-khong-rap-khuon-co-chon-loc-tan-dung-duoc-loi-the-cua-nguoi-di-sau-post410581.html