Decree No. 02/2002/ND-CP amends and supplements some articles of Decree No. 20/1998/ND-CP on developing trade in mountainous areas, islands, and ethnic minority regions. This Decree stipulates tax incentives for corporate income tax, reduced loan interest rates, price subsidies, transport fare subsidies, capital support for state-owned enterprises engaged in trade, and other policies aimed at promoting trade in mountainous areas, islands, and ethnic minority regions.
Scope of application
Merchants, state commercial banks, Ministry of Trade, People's Committees of provinces, state-owned enterprises engaged in trade, producers in particularly difficult communes in mountainous areas, islands, and ethnic minority regions.
Key points
- Merchants continue to be exempted or granted reductions in corporate income tax during the time and at the levels specified in Article 9 (old) of Decree No. 20/1998/ND-CP must have their headquarters or registered branches operating in mountainous provinces.
- Merchants borrowing funds from state commercial banks to reserve essential goods, sell them retail, and purchase agricultural and forest products in Mountainous Areas II and III, islands, and ethnic minority regions shall have their loan interest rates reduced by 20% compared to the usual rate, provided they have their headquarters or registered branches operating in mountainous provinces.
- The State implements price subsidies and transport fare subsidies to ensure that people in mountainous areas, islands, and ethnic minority regions can purchase essential goods for production and daily life at prices equivalent to those in mountainous city districts.
- State-owned enterprises engaged in trade in mountainous areas, islands, and ethnic minority regions are guaranteed working capital equal to 50% of their working capital needs, and are exempt from paying money received from the use of capital allocated for policy goods reserves.
- State-owned enterprises engaged in trade in Mountainous Area III, islands, and ethnic minority regions meeting the criteria set out in Clause 2, Article 2 of Decree No. 56/CP may convert to public utility enterprises according to current regulations.
🌐 Social impact of this document
- Positive impact: Supporting the development of trade, creating conditions for people in mountainous areas, islands, and ethnic minority regions to access essential goods at preferential prices.
- Negative impact: Increased budget costs due to financial support and reduced loan interest rates.
- Benefits: People can purchase essential goods at lower prices, state-owned enterprises engaged in trade are supported with working capital.
❓ Frequently asked questions
How long are merchants exempted or granted reductions in corporate income tax?
The duration and level of exemptions and reductions in corporate income tax are specified in Article 9 (old) of Decree No. 20/1998/ND-CP.
What is the loan interest rate for merchants in Mountainous Areas II and III, islands, and ethnic minority regions?
Reduced by 20% compared to the usual rate of state commercial banks.
Can state-owned enterprises engaged in trade in Mountainous Area III convert to public utility enterprises?
Yes, but they must meet the criteria set out in Clause 2, Article 2 of Decree No. 56/CP.
Who is eligible for price subsidies and transport fare subsidies?
People in mountainous areas, islands, and ethnic minority regions purchasing essential goods for production and daily life.
Full text
DECREE
Amending and supplementing certain articles of the Government Decree No. 20/1998/NĐ-CP dated March 31, 1998 on the development of commerce in mountainous areas, islands, and ethnic minority regions
_________________________
THE GOVERNMENT
Pursuant to the Law on the Organization of the Government dated September 30, 1992;
Pursuant to the Trade Law dated May 10, 1997;
At the proposal of the Minister of Trade,
DECREE:
Article 1. Amending and supplementing certain articles of the Government Decree No. 20/1998/NĐ-CP dated March 31, 1998 on the development of commerce in mountainous areas, islands, and ethnic minority regions as follows:
1. Amendment Article 9 as follows:
Article 9. Corporate income tax.
1. Businesses that enjoy exemptions or reductions in profit tax shall continue to be exempted or reduced from corporate income tax for the duration and at the rate specified in Article 9 (old) of the Government Decree No. 20/1998/NĐ-CP dated March 31, 1998.
2. Businesses that are exempted or reduced from corporate income tax must have their headquarters or registered branches operating in mountainous provinces or regions with mountains.
2. Amend Article 10 is as follows:
Article 10. Interest rates for loans.
1. Businesses borrowing capital from state commercial banks to stockpile, retail essential goods, and purchase agricultural and forest products in Region II and III mountainous areas, islands, and ethnic minority regions shall have their loan interest rates reduced by 20% compared to the usual interest rates of state commercial banks at the time of lending.
Businesses eligible for reduced loan interest rates must have their headquarters or registered branches operating in mountainous provinces or regions with mountains.
2. The State Bank of Vietnam shall guide the implementation of this provision and instruct state commercial banks to ensure sufficient capital to meet the borrowing needs of businesses in mountainous areas, islands, and ethnic minority regions.
3. The difference in loan interest rates of 20% shall be balanced within the annual budget plan. The supplementation shall be regulated by the Ministry of Finance.
3. Amendment Article 11 is amended as follows:
Article 11.
1. Training and capacity-building funds for mountainous area trade officials shall be implemented according to the current regulations of the Government on training and capacity-building plans for officials and civil servants during each period.
2. In addition to the current training system, the Ministry of Trade shall organize supplementary training and capacity enhancement for civil servants and state enterprise managers working in mountainous areas, islands, and ethnic minority regions.
Part of the training funds will be supported by the state budget, and part will be raised by the Ministry of Trade from support funds for training projects and trade promotion from countries and international economic organizations.
4. Amend the title of Chapter III as follows:
Chapter III. Subsidies for selling social policy goods and purchasing, consuming products produced in mountainous areas, islands, and ethnic minority regions.
5. Amend Article 12 as follows:
Article 12. Essential goods with subsidies for prices and transportation costs.
The State shall provide price subsidies and transportation cost subsidies to ensure that people living in mountainous, island, and ethnic minority regions can purchase essential goods for production and daily life at prices equivalent to those of similar goods sold in mountain city markets.
The Minister, Chairman of the Committee for Ethnic Minorities and Mountainous Areas, based on requirements and policies encouraging economic and social development, after reaching consensus with relevant ministries, sectors, and provincial people's committees in mountainous regions or provinces with mountainous districts, shall decide specifically the list of social policy goods eligible for price and transportation cost subsidies in each period.
6. Amend Article 13 as follows:
Article 13. Subsidized commodity supply quotas.
The Provincial People's Committee decides on the supply quotas and annual supply plans for subsidized goods and transportation costs. The basis for determining the supply quotas and plans is the needs of each locality, in accordance with the provincial budget funds available each year (including central government grants and local supplementary budgets). Priority should be given to ensuring sufficient goods for remote areas.
7. Repealed Article 14.
c) Not publishing the report on the use of capital audited at the General Shareholders' Meeting or not detailing the use of capital obtained from the public offering of securities in the annual financial report audited.” Article 16 as follows:
Article 16. Determine the subsidy amounts, transport distances, delivery and receipt locations for subsidized goods and transportation costs.
The Ministry of Commerce shall take the lead in collaboration with the Government Price Control Board, industry management agencies, and provinces with mountainous, island, and ethnic minority regions to determine subsidy amounts, transport distances, delivery points, and receipt points for subsidized goods and transportation costs so that ethnic minorities living in mountainous, island, and ethnic minority regions can conveniently purchase policy goods at reduced costs for the state.
Industry management agencies responsible for subsidized goods and transportation costs shall direct business units under their jurisdiction to prioritize signing contracts and transporting goods according to the quantities and times requested by provinces in mountainous, island, and ethnic minority regions, promptly meeting the consumption needs of the people in these areas.
9. Repealed Clause 2 of Article 17.
10. Repealed Clause 1 of Article 18.
11. Amended Article 22 as follows:
Article 22. Budget structure for subsidized goods and transportation costs.
1. The Chairman of the People's Committee of provinces in mountainous, island, and ethnic minority regions shall base on the characteristics and usage needs of the people in each locality, the total subsidy budget for goods and transportation costs, and the provincial budget capacity, to determine the budget structure for each type of goods, prioritizing the assurance of essential goods for the people.
2. For particularly difficult areas where the people cannot afford to buy goods, the Chairman of the People's Committee of the province shall base on the total subsidy budget for goods and transportation costs allocated to the locality and the provincial budget capacity, consider and decide on providing free essential goods.
12. Amend Article 23 as follows:
Article 23.Transport subsidies for the sale of certain products produced in particularly difficult communes in mountainous, island, and ethnic minority regions.
To support producers in particularly difficult communes in mountainous, island, and ethnic minority regions to sell their products, maintain and develop production, and contribute to the transformation of the local economic structure, the State implements a transport subsidy policy based on the results of purchases made by traders directly buying certain agricultural and forest products and processed products from these sources (referred to collectively as agricultural and forest products) from organizations and individuals (collectively referred to as producers) in particularly difficult communes. Priority is given to purchasing agricultural and forest products from particularly difficult communes in Zone III.
13. Amendment Clause 2 of Article 24 as follows:
2. Based on the principles set out in Article 23 and Clause 1 of this Decree, taking into account the situation and development plans for the economy and society in mountainous, island, and ethnic minority regions, and the demand for goods sales in each period of the province, the Chairman of the People's Committee of the province shall decide on the list of products produced in the province eligible for transport subsidies for annual sales.
The Ethnic Minorities and Mountainous Areas Committee, based on the annual budget capacity, shall guide localities to limit the list of products eligible for transport subsidies, notify localities to provide guidance on implementation.
14. Amend Clause 1, 2 of Article 25 as follows:
1. Encourage traders from all economic sectors to directly purchase and sell products produced in particularly difficult communes in mountainous, island, and ethnic minority regions. The Government will subsidize transport costs for traders based on the actual quantity of goods purchased.
2. The maximum distance for transport subsidies to purchase and sell products produced in particularly difficult communes in mountainous, island, and ethnic minority regions shall be determined by the Ministry of Commerce in consultation with the Government Price Control Board and relevant agencies to provide specific guidance.
15. Repealed Clause 6, amend Clause 2 and Clause 4 of Article 26 as follows:
2. The Government Price Control Board shall guide the principles for establishing transport subsidy levels and minimum purchase prices (floor prices) for subsidized products so that the People's Committees of provinces can establish minimum purchase prices for subsidized products and transport subsidy levels for each product in each subsidized area.
4. The Ministry of Finance shall take the lead and coordinate with the Ethnic Minorities and Mountainous Areas Committee and the Ministry of Planning and Investment to allocate annual state budget funds to achieve this goal.
16. Amend Article 28 as follows:
Article 28. Developing and strengthening state-owned enterprises engaged in trade and cooperative trade-service businesses in mountainous areas, islands, and ethnic minority regions.
1. Developing and reinforcing state-owned enterprises engaged in trade in mountainous areas, islands, and ethnic minority regions to purchase products, sell materials for production, and consumer goods for ethnic minorities in mountainous areas, islands, and ethnic minority regions, implementing policy items.
State-owned enterprises engaged in trade must have a network of purchasing and selling goods reaching central villages in mountainous areas, islands, and ethnic minority regions. Developing trade-service cooperatives and utilizing economic organizations and trusted individuals in villages and hamlets to act as agents for buying and selling goods, including goods subject to subsidized prices and transportation costs for state-owned enterprises.
2. The Ministers of relevant ministries and the Chairmen of provincial People's Committees are responsible for developing and reinforcing state-owned enterprises engaged in trade, organizing and directing coordination and support for state-owned enterprises engaged in trade to expand commodity circulation in mountainous areas, islands, and ethnic minority regions and implement policies ensuring policy items and consumption of products for the people.
17. Amend Article 29 as follows:
Article 29. Public welfare enterprises engaged in trade in mountainous areas, islands, and ethnic minority regions.
State-owned enterprises mainly operating in Zone III in mountainous areas, islands, and ethnic minority regions that meet the criteria specified in Clause 2, Article 2 of Decree No. 56/CP dated October 2, 1996 of the Government may be considered for conversion to public welfare enterprises according to current regulations if there is a need.
18. Amended Article 30as follows:
Article 30. Capital for state-owned enterprises engaged in trade in mountainous areas, islands, and ethnic minority regions.
1. State-owned enterprises in mountainous areas, islands, and ethnic minority regions shall be guaranteed circulating capital equal to 50% of their circulating capital needs. If state-owned enterprises engaged in trade do not have sufficient circulating capital at the aforementioned level, they shall submit requests to competent state agencies for additional capital allocation according to the provisions of the State Budget Law.
2. State-owned enterprises engaged in trade shall be provided with sufficient capital reserves for policy items. Depending on the specific area and item, the average reserve level should ensure demand for two to three months in mountainous areas, islands, and ethnic minority regions. Enterprises are exempt from paying interest on the capital reserved for policy items.
3. The Ministry of Trade, together with the Ministry of Finance, shall take the lead and coordinate with relevant ministries and sectors to guide the implementation of this provision.
19. Amended Article 31 as follows:
Article 31. Loan Support.
State-owned enterprises engaged in trade in mountainous areas, islands, and ethnic minority regions can borrow medium-term and long-term loans from state credit sources (including the national investment support fund) at preferential interest rates to invest in opening additional business points serving mountainous areas, islands, and ethnic minority regions, especially in Zone III, and to expand the scale of trade or production processing.
20. Amend Clause 2, Article 33 as follows:
2.The Ministry of Trade shall take the lead and coordinate with the Ministries of Planning and Investment, Finance, Agriculture and Rural Development, the State Bank of Vietnam, the Committee for Ethnic Minorities and Mountainous Areas, the Government’s Organizational and Cadre Affairs Board, and the Government’s Price Control Board to guide the implementation of this Decree.
The Minister of Trade shall take the lead in monitoring and reporting on the results of implementing policies encouraging and providing preferences to traders.
The Minister and Chairman of the Committee for Ethnic Minorities and Mountainous Areas shall take the lead in organizing the implementation, monitoring, and reporting on the results of implementing price and transportation subsidy policies.
Article 2. This Decree shall take effect fifteen days from the date of signature. Previous regulations contrary to this Decree shall be abolished.
Article 3. The Ministers, Heads of ministerial-level agencies, Heads of government-affiliated agencies, Chairpersons of provincial people's committees under the central government shall be responsible for enforcing this Decree.
PRIME MINISTER
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