Complex tax laws don’t deter foreign investment (VOV) -The complexity of Vietnam’s business tax climate is not impeding the attraction of foreign investment, and oddly enough, is appealing to a corrupt element of investors using complexity and legal loopholes to their advantage. A World Bank recent report on
However, in spite of the general consensus by leading economists that Economists generally attribute the strong FDI inflow to Speaking at a recent seminar, Central Institute for Economic Management (CIEM) Deputy Director Dr. Vo Tri Thanh, said foreign investors in “Investors are not aiming to get involved in charitable programmes,” Dr. Thanh emphasised, adding “this is an advantage However, Dr. Thanh pointed out a number of shortcomings in “Tariff incentives are only one factor to attract FDI businesses,” he emphasised, adding that, “Sometimes these incentives lead to corruption.” Professor Le Cao Doan from the Vietnam Institute of Economics (VIE), in turn echoed Dr. Thanh’s view and elaborated on the point that some foreign businesses are taking full advantage of “They are doing this by effectively taking advantage of complexities in the laws and evading paying the nation’s income tax altogether,” Doan said. In other words, the foreign invested firms make their profits in Vietnam but those profits get effectively allocated to other countries the firms operate in, where the income tax rates are lower. Another issue of concern is the lack of laws regulating environmental pollution. Other countries throughout the world carefully consider the green growth model and its enforcement. Not transparent – an opportunity to earn money One peculiar aspect to Instead of promoting production and increasing capacity, some foreign investors are eager to participate in corruption, or other schemes to corner the market and distort trade in order to make fast money. To support his assertions, Prof. Doan cited the According to him, those foreign invested firms who do not have a close relationship with State agencies will find it hard to run business, particularly small-and-medium-sized enterprises (SMEs). Thousands of businesses have gone bankruptcy due to tough competition. The country should take a step back and re-evaluate the offering of investment incentives, Doan suggests and the nation’s focus should be on modernising the nation’s production methods to avoid transforming itself into an outsourcing venue. VOV |
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