Expecting a breakthrough model
Talking to Lao Dong, Mr. Le Duy Hiep, a logistics expert, said that it is necessary to first affirm that the Vietnamese logistics industry has a clear attraction.
Currently, the Vietnamese logistics industry is facing some major shortcomings, in which costs are higher than many countries, reducing competitive advantage. Currently, Vietnam's logistics costs are significantly higher than the world average. In addition, the logistics infrastructure is still lacking in synchronization and connectivity... These realities pose an urgent need for Vietnam to apply a new breakthrough model.
According to Mr. Le Duy Hiep, the concept of "tax-free port" mentioned by General Secretary To Lam can be understood as a model of seaports enjoying non-tax regulations or free trade zones... The logistics industry needs to deeply study this model to effectively implement it in practice.
According to Mr. Hiep, the tax-free port will be the place for international trade activities to stimulate trade, facilitate foreign enterprises and attract FDI capital to Vietnam. The main goal of the free trade zone is to encourage economic activities and boost domestic production.
The most important factors to support this goal include incentives for tax exemptions, tariffs or customs clearance deferral policies. In a port in a free trade zone, goods can be imported, produced and exported without having to pay customs or domestic taxes. These taxes are only applied when products enter the domestic market, usually with lower tax rates.
Mr. Le Duy Hiep emphasized that it is necessary to reduce administrative procedures, especially procedures related to customs and taxes, to attract and develop a tax-free port model. This is one of the most pressing issues, hindering the logistics industry as well as the Vietnamese seaport industry to develop commensurate with its potential.
"Vietnam has great potential to become a regional and world logistics center, but it needs to integrate trade functions such as non-taxable zones, free trade zones, transit ports, etc. Policies and laws have paved the way, but a strict control mechanism and appropriate adjustments are needed for import and export, customs, and taxes. In the context of fluctuating global trade, the development of free trade zones and tax-free ports will be an important boost to help Vietnam's economy break out" - Mr. Le Duy Hiep said.
Experience in operating and developing FTZ in Asia
Many countries in the Asian region, such as Singapore, China, etc., have established Free Trade Zones ( Free Trade Zones - FTZ) to develop their economies, attracting foreign direct investment (FDI) in FTZs.
According to the United Nations Economic and Social Committee for Asia - Pacific (UNESCAP), most Asian countries choose the policy of developing FTZs partly because providing relatively developed infrastructure in especially small areas is easier than establishing good infrastructure nationwide in a short time.
The FTZ is considered an area outside the scope of normal customs law, designed to attract FDI and provide a friendly business environment with incentives, good infrastructure and many other advantages. Above all, FTZs, regardless of their name, focus on production for export and many FTZs are located along the coast or near shipping routes to take advantage of international transport.
Some differences between FTZs in Asia may be due to differences in political, economic and social situations. For example, it can be considered that the whole of Singapore is a FTZ while most other countries such as South Korea and Malaysia only designate very specific areas as FTZ, much smaller than the total area of the country.
The first FTZ in Singapore was established in 1969 to support transit trade. The country currently has 7 FTZs, including 6 zones for seaborne goods and 1 zone for aviation. Goods here are stored, processed, and re-exported with minimal customs procedures, helping to optimize transit activities.
Since 1980, China has established 5 special economic zones (SEZs) such as Shenzhen, Zhuhai, San Dau ( guangdong), Xiamen (Phuc Kien) and the entire Hainan province, playing a role in promoting foreign economic development and foreign trade reform.
China's FTZs range in area from less than 1km2 to 10km2, allowing tax warehouses, foreign exchange transactions, trading, processing and export production. The first FTZ was launched in Shanghai in 2013, and has now increased to 22 zones, mainly located near seaports.
FTZ is managed by local authorities according to central and local regulations. In 2023, 22 FTZ of China contributed 18.4% of the total import-export turnover of the country (according to China Daily, June 2024).
