The Vung Ang Economic Zone in Ha Tinh Province. The Government has rejected a proposal to establish a special steel economic region. — VNS File Photo

The proposal has been put forward by Taiwan's Hung Nghiep Formosa Ha Tinh Steel Company. The firm's other suggestion to establish a board under the Government's management for the region was also unprecedented and unnecessary because the Vung Ang Economic Zone Authority can resolve issues related to the implementation of the Formosa project, the Thoi bao Kinh doanh (Business Times) newspaper quoted the ministry as saying.

According to the ministry, the Formosa steel mill project was enjoying the highest incentives on import taxes on machines, equipment and materials as well as on taxation and land.

The protection of the steel industry and the tugboat service trading were being considered by authorised agencies, it said.

The establishment of the special region was aimed at building the Son Duong deep-water port, and ensuring investment in the related industrial sectors of steel and electricity to promote industrial investment, the Hung Nghiep Formosa Ha Tinh Steel Company explained in its official letter which was submitted to Deputy Prime Minister Hoang Trung Hai earlier.

The Government had agreed to offer import tax incentives to the project earlier, to create favourable conditions for its implementation. These include exemption from paying import taxes on a number of machines and equipment, creating fixed assets for the giant steel and port project and exemption paying from the natural resource tax for its process of removing sand to level the project surface.

The steel project was considered one of Viet Nam's biggest foreign-funded projects with a registered investment capital of nearly US$10 billion. The project is now under construction and is expected to begin operations in 2015. — VNS