Investment, enterprise laws reviewed by NA
HA NOI — The National Assembly early this week heard a series of reports on legislative work, including drafts of the long-awaited laws on investment and enterprise.
Speaking at the 11th NA session, the Minister of Planning and Investment (MPI) Vo Hong Phuc affirmed that the new Enterprise Law would continue to nurture, expand and develop the rights and freedoms of the business sector.
“The ask-and-give mechanism, unreasonable permits and other inconvenient procedures for enterprises will be removed, and business registration will replace the current licensing regime,” Phuc said.
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The minister added that the Enterprise Law, applicable to businesses of all types, set a four year deadline for equitisation of State-owned enterprises effective as soon as the bill comes into effect.
The bill also allows one individual investor, instead of at least two at present, to form a limited liability company.
The application procedures will be greatly simplified and will incorporate fewer costs, as it will combine the application for opening a business with that for investment.
Under the new law, the Government will not interfere in enterprise operations but will provide them with legal support and State management in order to help them grow, said the Director of the NA Economic and Budget Committee, Nguyen Duc Kien.
The revamped Investment Law is expected to increase investors' confidence in Viet Nam's businesses and investment environment, said Minister Phuc.
He added that over the past few years, laws on investment and business in Viet Nam have been continuously refined toward creating a level playing field for all economic sectors.
Differences in the investment, business and management environments between domestic and foreign enterprises have been markedly narrowed, with many common policies for both sectors having been introduced, he said.
However, Phuc pointed out, the existing Law on Domestic Investment Encouragement and the Law on Foreign Investment have shown inconsistencies, and have failed to create an actual, level playing field for domestic and foreign investors.
Shortcomings, the result of implementing separate legal systems, are expected to be overcome with the introduction of the Law on Investment – a common law for both domestic and foreign investors, Phuc said.
He added that the signing of numerous bilateral and multilateral investment agreements have prompted Viet Nam to open its market and remove tariff and non-tariffs barriers and subsidies which do not conform with international practices.
The country, however, needs more time to continue exercising several policies to protect domestic production. These policies will be implemented with certain conditions to help local industries compete with foreign rivals once Viet Nam fulfils its commitments of commercial liberalisation.
As a result, the compilation and improvement of laws, including the Law on Investment, have shown Viet Nam's efforts to bolster national renewal and implement international conventions, he elaborated.
According to the minister, experts affirmed that the common law for domestic and foreign investment should include preferential treatment and encouragement policies similar or more competitive than those of other Southeast Asian countries. They will help improve the Vietnamese investment environment amid fierce competition in attracting foreign capital in the region.
With 10 chapters and 90 articles, the draft Law on Investment has been designed with help from National Assembly deputies and foreign and domestic investors.
It will be discussed by law makers together with the Enterprise Law in coming days.
In addition, Phuc presented the Law on Bidding to the assembly, and reported that intensifying publicity and making the bidding process more transparent was the focus when compiling it.
The draft law contains stipulations that bidding information must be publicised free-of-charge on a relevant State information system.
Under the proposal, the State would save between VND15 billion and 20 billion (US$945,800-1.26 million) by making announcements in the media.
The promulgation of the Law on Bidding is an urgent requirement, as it is expected to intensify project management and overcome outstanding issues, thus increasing the efficiency of the country's limited investment resources.
The bill has been compiled to increase decentralisation for investors that are responsible for the bidding process, will simplify procedures, and intensify post-bidding inspection. It also allows the people to take part in inspection activities regarding State-funded projects.
Minister Phuc said the promulgation of the Bidding Law will create consistency in regulations on using State funds and slash differences on bidding contained in current legal documents.
The future Bidding Law is compatible with international practices, and it will make local bids more competitive when taking part in international auctions.
The official pointed out that the upgrading of the Ordinance on Bidding into the Law on Bidding, which is expected to be promulgated in 2005, will be a boon for Viet Nam's World Trade Organisation (WTO) membership negotiations.
Minister of Finance Nguyen Sinh Hung assured members of the NA that there would no longer be tariff discrimination between imported products and locally-made ones under amended laws on special consumption and value-added taxes.
In regards to cigarettes, the rate will be 55 per cent in 2006-07, and 65 per cent in 2008.
Alcohol of more than 40 proof will be taxed at 65 per cent while that of between 20-40 proof will be taxed at 30 per cent.
The government will impose a value-added tax rate of 5 per cent for semi-processed cotton – be it imported or domestically-produced.
All new tax rates will be applicable early next year.
Market observers believe that the amendment is necessary as the country rapidly integrates into the international economy.
They say that many of the country's current tax regulations do not yet conform with WTO rules.
Large differences in taxing rates is one of the key issues that Viet Nam's trade partners have complained about at negotiations for the country's WTO bid. — VNS
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