Preference for support industries

The Ministry of Industry and Trade (MoIT) is finalising a draft decree for the Prime Minister’s approval on affording preferential treatment to Viet Nam’s support industry.

The draft decree will include specific policies for the development of support for the garment and textile, footwear, electronics, automobile and engineering sectors.

Accordingly, support projects will be allowed to borrow up to 85 per cent of fixed capital from the State and given discounted land rental as well as funds to train staff.

They will also enjoy preferential corporate income tax for 15 years, a 50- per-cent tax reduction for the following nine years and preferential import/export tariffs.

MoIT also said that it would liaise with Japan to put into action the joint Vietnamese and Japanese initiative on the development of the support industry.

It further said that currently, the support industry was failing to keep pace with the economy’s demands which is having a negative impact on the trade deficit and deterring foreign investment.

“Enterprises should play the decisive role in developing the support industry. In order to do this, it requires the efforts of the enterprises themselves and co-operation between enterprises,” said the Viet Nam Chamber of Commerce and Industry in its annual Viet Nam Business 2009 report.

The chamber encouraged firms in the support industry to actively seek new opportunities and to pay attention to technological innovation.

Meanwhile, several foreign experts recommended that Vietnamese enterprises change their way of thinking which is currently inhibiting the development of the support industry, through their passive approach to acquiring new technology and failure to develop new ways of working with foreign enterprises.

Enterprises should try to comply with international standards in terms of product quality, safety, environmental protection and intellectual property rights in order to be able to compete in the world market, they said.

Viet Nam’s support industries include sectors that produce raw materials, components and spare parts. These in turn support industries such as garment, footwear, electronics, information technology and automobile manufacturing and assembly. — VNS

Tags: Vietnam industries, Vietnam industry