Announcing the deferral, National Assembly General Secretary Nguyen Hanh Phuc said it would allow the government more time to consult the public, organizations, experts and scientists so that the bill can be finalized and passed at a later session.
Public consultations about the bill’s provisions are ongoing, he said.
The National Assembly, Vietnam's highest legislative body, first discussed the draft law on setting up SEZs in three strategic areas last October, offering greater incentives and fewer restrictions.
The three areas identified for the SEZs are Van Don in the northern province of Quang Ninh, Bac Van Phong in the central coastal province of Khanh Hoa, and Phu Quoc in the southern Kien Giang Province.
The bill was subsequently sent back for amendments before being discussed again at the National Assembly in May. At this time, the bill included a provision allowing foreign investors to lease land for 99 years as one of the incentives to attract investors.
Vietnam's current Land Law only allows investors to rent land for up to 70 years.
On May 23, the majority of parliament members agreed on the need for Vietnam to establish SEZs. Many lawmakers however argued against a number of the bill's provisions, including the long land lease period, as well as the number and locations of the planned SEZs.
On June 9, the government proposed the National Assembly to postpone passing the bill to its working session this October, saying it needed more time to ensure that it meets the aspirations of both legislators and the public.
The removal of the controversial 99-year land lease duration for foreign investors was among the government's proposed amendments to the bill.
The bill was subsequently postponed after over 85 percent of members of parliament voted in favor of the deferral at a meeting on June 11.
However, even as lawmakers were discussing the bill, news of the proposed 99-year land rent duration for foreign investors sparked a public outcry, with thousands of people taking to the streets to protest the bill in Hanoi, Da Nang, Ho Chi Minh City and several provinces on June 10 and 11.
Following the demonstrations, police detained hundreds of protesters and said they uncovered evidence that the protests were anti-state actions incited by organizations based in other countries using false, distorted information on the draft law.
Dozens of protesters have been sentenced to jail for disturbing public order by inciting violence during protests in southern Binh Thuan and Dong Nai provinces.