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  Banking Finance

Financial discrimination to be totally removed by 2005

Viet Nam is on track to introduce a one-price system for both locals and foreigners to meet the deadline in 2005, public services such as telecommunications charges will require a huge cut, reported the Ministry of Planning and Investment.

International communications charges, including that of international calls and international transmission lines, have been gradually reduced until they are equal to regional rates, said a ministry official at a recent business forum, which was also attended by foreign investors. The forum was held ahead of a mid-term Consultative Group (CG) meeting due to take place in Central Nghe An province on Thursday.

The national flag carrier Viet Nam Airlines has since early this year applied single prices for both local and foreign passengers on domestic routes.

Investors have also enjoyed financial support for ground-clearance to help reduce projects' costs.

Once the Ordinance on Individual Income Tax takes effect in July 1, tax costs for high-income earners will reduce considerably thanks to the reduction of the individual tax rates for both Vietnamese and foreigners.

The increase of the starting point of individual income tax for Vietnamese high-income earners has helped narrow the gap between Vietnamese and foreigners and reduce labour costs for foreign investors.

The Japan External Trade Organisation (JETRO) said that there were no discrimination between Vietnamese and foreign investors in investment, and public services such as water supply, telephone installation, air tickets, and advertisements on television. The disparity of 6 percent remains only in electricity prices.

JETRO also said that apart from eliminating dual-price mechanism, Viet Nam's prominent advantage is its location in the centre of East Asia where the country serves as a bridge linking China and the Association of Southeast Asian Nations. Viet Nam has a stable political system, its workers are industrious and capable of perceiving new technologies, JETRO noted, adding low labour costs and a high growth rate in the domestic market are also the country's advantages.-Enditem

VNS - (15/06/2004)

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