On the afternoon of December 11, the National Assembly Standing Committee gave opinions on the Draft Decree of the Government regulating the establishment, management and use of the Investment Support Fund (Draft).
Deputy Minister of Planning and Investment Nguyen Thi Bich Ngoc said that the Draft proposes a model for the Fund to operate similarly to a public service unit under the Ministry of Planning and Investment, with specific regulations specifically stipulated in this Decree.
The Fund does not receive charter capital from the state budget, operates not for profit and does not aim to preserve the Fund's financial resources.
The State budget allocates annual estimates for the Fund to operate (expenditures to support business costs and management expenses); different from the provisions in Clause 11, Article 8 of the State Budget Law 2015.
This is a new model, suitable for the characteristics of the Fund but not yet regulated in current law, according to the Government's submission.
The Government proposes to implement according to the model prescribed in the draft Decree to ensure feasibility and suitability with the characteristics of the Fund in performing the task of supporting expenditures and the function of receiving financial sources (inside and outside the state budget), without linking the Fund's expenditure tasks with the regulations on state budget management.
Deputy Minister Nguyen Thi Bich Ngoc said that the Draft Decree stipulates the principles for applying the Fund's cost support policy: "Support money from the Fund is not included in the taxable income of enterprises".
Currently, the Draft Law on Corporate Income Tax (amended) being submitted to the National Assembly has added a provision that direct support from the state budget and from the Investment Support Fund established by the Government is exempt from corporate income tax.
Presenting opinions for discussion, the Standing Committee of the Finance and Budget Committee and a number of Committees of the National Assembly agreed on the necessity of issuing a Government Decree to implement support policies and attract investment in the new context.
However, Chairman of the Finance and Budget Committee Le Quang Manh suggested that it is necessary to clarify how many enterprises and projects are currently eligible to enjoy this preferential policy, the ability to balance annual implementation resources, and measures to handle risks when implementing the policy.
The Standing Committee of the Finance and Budget Committee also proposed that it is necessary to study and abolish the current tax exemption and reduction policy for investors affected by the global minimum tax in order to focus on proposing and implementing other more suitable investment incentives and support policies, including forms of subsidies as applied by other countries.
Regarding the model and legal status of the fund, Mr. Le Quang Manh reflected that the majority of opinions in the Standing Committee of the Committee agreed to establish the Fund.
However, it is recommended to consider minimizing the emergence of organizational structures and staffing, and consider further the operating model similar to public service units under the Ministry of Planning and Investment with specific regulations as proposed by the Government.
“It is recommended to clarify the legal status, clearly define the form and nature of the Fund’s operations (non-budgetary state financial fund or state budget fund); the establishment of the Fund must ensure that the state budget is not used for the Fund’s operating expenses” – Mr. Le Quang Manh stated.
