National Assembly Meeting: Proposal to establish a Free Trade Zone in Hai Phong City

National Assembly Chairman Tran Thanh Man chaired the meeting on the morning of May 13. (Photo: VNA)

On the morning of May 13, Minister of Finance Nguyen Van Thang, authorized by the Prime Minister, reported to the National Assembly the Draft Resolution of the National Assembly replacing Resolution No. 35/2021/QH15 dated November 13, 2021 of the National Assembly on piloting a number of specific mechanisms and policies for the development of Hai Phong city.

Attracting investment, finance, trade, services

The Government representative said that the summary of 5 years of implementing Resolution No. 45-NQ/TW of the Politburo showed that Hai Phong city has achieved some outstanding results in economic and social development, the economic growth rate is always high; affirming its role as a driving force for economic development contributing to the development of the economic triangle of Hanoi - Hai Phong - Quang Ninh, developing the linkage of the Red River Delta (RD) in particular and the whole country in general.

However, besides the achieved results, there are still shortcomings and limitations such as: Contribution to the whole country is not commensurate with potential and advantages; economic scale and revenue structure are not sustainable, mainly relying on foreign direct investment (FDI); planning, urbanization, land, economic and social infrastructure are not synchronous; science and technology, innovation have not really made breakthroughs...

Therefore, the issuance of a new Resolution replacing Resolution No. 35/2021/QH15 of the National Assembly on piloting a number of specific mechanisms and policies for the development of Hai Phong city to clear "bottlenecks", create breakthroughs, have great spillover effects in the Red River Delta region and contribute more to the high growth target in the 2026-2030 period of the whole country is necessary and consistent with the goals set by the Politburo in Resolution No. 45-NQ/TW, Conclusion No. 96-KL/TW.

Going into specific content, according to Minister Nguyen Van Thang, the Draft Resolution of the National Assembly stipulates 06 major policy groups with 41 specific policies, including: Investment management (02 policies); State finance and budget management (04 policies); Planning, urban, natural resources and environment management (09 policies); Science and technology management, innovation (08 policies); Income of cadres, civil servants and public employees under the management of Hai Phong city (01 policy); Establishment and mechanisms and policies in the Free Trade Zone in Hai Phong city (17 policies).

For example, regarding investment management, two new policies are proposed, specifically, Clause 1, Article 4 stipulates: "Decentralization and delegation of authority to the People's Committee of Hai Phong City in approving policies and adjusting investment policies for investment projects to build ports and port areas with an investment capital scale of VND 2,300 billion or more belonging to Hai Phong seaport."

According to the representative of the drafting agency, this policy will create favorable conditions for localities to be proactive and flexible, attracting investors to invest in building port areas according to approved planning in the soonest time; put projects into operation soon; and create revenue for the state budget.

Next, Clause 2, Article 4 stipulates: “The City People's Committee organizes the management and maintenance of national inland waterways through the City; manages the operation of inland ports and wharves on national inland waterways through the City and uses local budget sources in combination with other legal capital sources according to the provisions of law to implement,” in order to help Hai Phong City proactively invest in upgrading infrastructure, increasing water transport capacity, improving cargo handling and passenger transport capacity to promote the economy.

Minister of Finance Nguyen Van Thang presented the Draft Resolution of the National Assembly to replace Resolution No. 35/2021/QH15 dated November 13, 2021 of the National Assembly on piloting a number of specific mechanisms and policies for the development of Hai Phong city. (Photo: An Dang/VNA)

Notably, the drafting agency proposed: “Establishing a Free Trade Zone in Hai Phong City” is an area with defined geographical boundaries, established to pilot outstanding, breakthrough mechanisms and policies to attract investment, finance, trade, services to promote exports, industry, research and development (R&D) activities and attract high-quality human resources.

Hai Phong Free Trade Zone is organized into functional areas: Production area, port and port logistics area, trade - service area and other types of functional areas according to the provisions of law.

The draft Resolution proposes decentralization to the City People's Committee to decide on the establishment, expansion, and adjustment of the boundaries of the Hai Phong Free Trade Zone associated with the Dinh Vu-Cat Hai Economic Zone and the Southern Hai Phong Coastal Economic Zone similar to industrial parks.

This policy creates a legal corridor for Hai Phong Free Trade Zone to pilot outstanding, breakthrough mechanisms and policies to attract investment, finance, trade, services to promote exports, industry, research and development (R&D) activities and attract high-quality human resources.

In addition, the decentralization to the People's Committee of Hai Phong City to decide on the establishment is consistent with the policy of promoting decentralization and delegation of power in Resolution 18-NQ/TW dated October 25, 2017 at the 6th Conference of the 12th Party Central Committee and the direction of General Secretary To Lam on promoting decentralization and delegation of power with the motto "locality decides, locality does, locality is responsible" at the 10th Conference of the 13th Party Central Committee.

In order to promote investment attraction and promote production and business in the new generation Hai Phong Free Trade Zone, the draft Resolution stipulates a number of specific preferential policies: Simplifying administrative procedures in investment and business procedures; import and export procedures; immigration procedures, temporary residence and work permits; Land procedures, construction investment; Optimizing investment incentives on land rent, water surface rent, taxes; Other investment and business activities in the Free Trade Zone and allowing foreign bank branches to open transaction offices in the Free Trade Zone outside the branch headquarters.

In addition, to pilot the “one-stop, on-site” mechanism for the Hai Phong Free Trade Zone, the draft Resolution stipulates that the Hai Phong Economic Zone Management Board is authorized to directly perform the state management function for the functional areas of the Hai Phong Free Trade Zone and assigns the authority to the Management Board to directly handle procedures for granting Certificates of Origin of goods; Granting, exchanging, re-granting, adjusting, revoking Business Licenses, Licenses to establish retail establishments for investors and granting, re-granting, extending, revoking Work Permits and certifying foreign workers who are not subject to work permits in the Hai Phong Free Trade Zone.

Need risk management mechanism, monitoring mechanism

On the side of the examining agency, Mr. Phan Van Mai, Chairman of the National Assembly's Economic and Financial Committee, said that the Committee approved the issuance of a Resolution replacing Resolution 35 on piloting a number of specific mechanisms and policies for the development of Hai Phong City and found that the basic dossier had sufficient political basis, sufficient legal basis, practical basis, and was qualified to be submitted to the National Assembly at the 9th Session.

The Draft stipulates: “The City People’s Committee approves the investment policy for investment projects to build new ports and port areas with an investment capital of VND 2,300 billion or more,” currently this authority belongs to the Prime Minister. The National Assembly’s Economic and Financial Committee agrees to decentralize to the City in accordance with the spirit of Resolution 45 of the Politburo. However, it is proposed to add regulations on the responsibility regime, ensuring that authority goes hand in hand with responsibility.

Regarding the policy on science and technology management and innovation, the draft Resolution stipulates exemption of corporate income tax and personal income tax for innovative start-up activities. The National Assembly's Economic and Financial Committee agrees with the policy because it is similar to Da Nang. However, regarding the exemption of corporate income tax, it is proposed to add the provision: "In case the enterprise is subject to the global minimum tax, it shall pay tax according to the corresponding regulations" to ensure consistency with the policy on global minimum tax. In addition, the examining agency proposes to consider exemption of liability for officials, civil servants and employees using capital from the Venture Capital Fund.

Chairman of the National Assembly's Economic and Financial Committee Phan Van Mai presented a report examining the draft Resolution of the National Assembly replacing Resolution No. 35/2021/QH15 dated November 13, 2021 of the National Assembly on piloting a number of specific mechanisms and policies for the development of Hai Phong city. (Photo: VNA)

According to the representative of the National Assembly's Economic and Financial Committee, the pilot establishment of a Free Trade Zone is necessary, a political determination of Hai Phong City and the Government; there is sufficient political and legal basis. However, this is a big issue, not only economic in nature but also related to national defense, security, order and social safety.

Therefore, it is recommended to clarify the impact on economic growth, budget, society; regional spread...; Risk management mechanism, monitoring mechanism to ensure openness while maintaining financial safety, economic security, social order; Responsibility in implementation of relevant individuals and organizations.

Regarding the pilot policy in the Hai Phong Free Trade Zone, the representative of the appraisal agency said that the draft stipulates that land use for the Hai Phong Free Trade Zone does not depend on the planning indicators and national land use plans that have been allocated to the City by competent authorities." To pilot the outstanding policy in special economic zones, the National Assembly's Economic and Financial Committee basically agrees with the proposal, but suggests that there should be specific regulations and instructions for implementation.

Regarding the authority of the Hai Phong Economic Zone Management Board to implement the “one-stop” mechanism, the examining agency proposed a review to ensure simplification of administrative procedures; need to be clear, transparent, timely (short in terms of time limit); specific in terms of process; reasonable in terms of authority, ensuring the capacity of the implementing organization.

In addition, the National Assembly's Economic and Financial Committee approved the application of corporate income tax incentives because they are similar to those applied to economic zones, but the application period is longer. The review agency suggested that the Government consider the incentive period. In case enterprises are subject to the global minimum tax, they must pay taxes according to the corresponding regulations./.

According to Vietnam+

Source: https://baothanhhoa.vn/hop-quoc-hoi-de-xuat-thanh-lap-khu-thuong-mai-tu-do-tai-thanh-pho-hai-phong-248573.htm