Workers process pineapple at a local firm. The customs sector recommends that the authorities review policies for export processing enterprises to assure business equality. — Photo baodansinh.vn

HA NOI (Biz Hub) — The customs sector has recommended that the Ministry of Finance and relevant agencies review policies for export processing enterprises, since current regulations seem to excessively favour the firms.

This was reported by Dien dan Doanh nghiep (The Business Forum) online.

Decree No 29/2008/ND-CP, dated March 14, 2008, defined these enterprises as either companies operating in export processing zones or firms operating in industrial and economic zones and exporting all the products that they manufacture.

Decree No 24/2000/ND-CP, issued on July 31, 2000, reiterated that these enterprises must export all their products.

However, the latest Enterprise Law and the Investment Law, which came into effect in mid-2015, do not stipulate the types of export processing enterprises or regulate the percentage of goods they are to export.

The slackening regulations result in almost no difference between export processing enterprises and normal firms, although the export processing enterprises enjoy preferential treatment, the customs sector said.

Specifically, Circular No 219/ 2013/TT-BTC, issued by the finance ministry on December 31, 2013, stated that normal domestic enterprises which sell goods to export processing enterprises will enjoy value-added tax (VAT) rate of zero per cent.

The same goods, if traded between normal domestic enterprises only, will bear VAT rates of 5-10 per cent.

The customs sector said it was necessary for the authorities to maintain the regulation requiring export processing enterprises to export all their products and reconsider preferential policies to assure business equality.

The sector suggested that the VAT incentive applied in case domestic firms sell goods to export processing enterprises should be abolished. The incentive should only be applied when export processing enterprises imported goods from foreign countries.

An official from the management board of industrial zones in southern Dong Nai Province told Dien dan Doanh nghiep on condition of anonymity that because of the lack of regulations on export processing firms under the enterprise and investment laws, the board is quite hesitant to certify the companies.

Managing the firms also embarrassed the Dong Nai Department of Customs, which reportedly said many of them did not meet production facility standards, as required under Decree No 114/2015/ND-CP issued last year on export processing, industrial and economic zones.

Fifteen out of more than 90 export processing enterprises licensed by the board did not qualify, the department said. — VNS