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The seminar.

Not ideal conditions

Speaking at the seminar, Ms. Nguyen Thu Huong, Senior Manager of Oxfam, said that according to the World Economic Forum's Global Competitiveness Report (2017-2018), 85% of Vietnamese investors confirmed the tax incentive policy was not necessary. Instead, the three most important factors chosen by companies are infrastructure, human resource quality, and social stability. According to international experience, the success of special economic zones is largely dependent on the location, investment environment, integrity, transparency and efficiency of the bureaucracy.

Regarding tax incentives in the Special Administrative Zone Law, Oxfam's representative said that tax incentives in the draft law were not necessary. Preferential areas are not new compared to other laws, the proposed industry priority is almost overlapped with priority sectors of high-tech zones and economic zones that are favored in other laws.

For the three new sectors including casino, condominiums and real estate, capital for investment had already been attracted when there was no special law. Short-term tax exemptions for R & D, start-ups, and innovative research centers may not be as beneficial to investors due to volatile business results.

Remarkably, according to Oxfam, the tax incentives in the draft are likely to create a "sunken" area for businesses to evade tax through profit transfers. "Developing countries, including Vietnam, lose $US 100 billion a year due to the tax evasion activities of multinational corporations.

We are concerned that the Draft Law will create a "sunken" area in Vietnam, not only enabling multinational companies to transfer prices, but also allow Vietnamese businesses to bypass taxes. transfer profits from enterprises outside the special zone to businesses in the special zone,"said a worried Ms. Nguyen Thu Huong.

Careful consideration

Sharing views at the seminar, economic expert Pham Chi Lan said that tax incentives should not be a top priority in the special economic zones. "Each special economic zone is an institutional laboratory. Then, the new institutions should be introduced, especially in the context of a dramatic institutional improvement that is consistent with the integration commitments that Vietnam participates in.

Vietnam needs to experience a special economic zone, not a series of incentives. The incentives we have already made. In the past, Vietnam had extensive incentives, now it focuses on those three specialties again, so I do not believe it will succeed," Ms. Pham Chi Lan said.

According to Assoc. Dr. Dinh Trong Thinh, Head of International Finance Management, under the Academy of Finance, most countries have eliminated corporate tax incentives that create open mechanisms for access to capital, investment environment and the completion of the legal system.

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Mr. Dinh Trong Thinh also emphasized: "In 30 years of attracting investment, Vietnam has not had a full assessment of how effectively tax incentives can create. Now in the special economic zones, Vietnam has larger tax incentives than FDI enterprises. Should or should not? We should be cautious in reviewing the special economic zones in order to have a complete and consistent set of operations in the future. They must become big economic forces in a few decades, not just two or three years".