Vietnam plans to cut back tax incentives for casinos in special economic zones

Vietnamese lawmakers are considering a proposal to reduce tax incentives for casinos and other gaming ventures in planned special economic zones (SEZs) presented by the Standing Committee of the National Assembly.

The move came after Assembly delegates and economists criticized the government’s SEZ plan to offer investors overly generous tax incentives in Van Don in the northern Quang Ninh Province, Bac Van Phong in the central Khanh Hoa Province and Phu Quoc in the southern Kien Giang Province.

Entertainment and tourism projects which include casinos would see their unlimited-time land and sea lease exemptions scrapped. Instead, the exemption period would not exceed half the projects’ total lease time, and would last no more than 30 years for the Van Don and Bac Van Phong SEZs, and 20 years for the Phu Quoc SEZ, Tuoi Tre reported on Monday.

These projects would also be paying preferential corporate income tax, starting from the moment they generate taxable revenue, of 17 percent for the first five years only, but only until 2030. The previous proposal granted these projects 100 percent tax reduction during the first four years, then 50 percent for the following five years, and finally 10 percent for another 21 years before assuming the normal tax rate, currently at 20-22 percent.

They would also have to pay a higher excise tax, from the previous rate of 10 percent to 15 percent during the first 10 years, according to the new proposal.

Using old tax rates, the Ministry of Planning and Investment estimated that the SEZs would be able to bring a total of $9.5 billion each year to state coffers from tax payments and land related fees. In 2030, the total number of jobs created in the three areas is estimated to be over 760,000, with income per capita up to $13,000, 5.4 times the current level.

The draft law on SEZs is expected to be discussed during an upcoming session of the National Assembly meeting on Wednesday.