Decision No. 194/1999/QD-TTg On financial treatment for certain sugar factories

Pursuant to …;

On financial treatment for certain sugar factories

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PRIME MINISTER

Pursuant to the Government Organization Law dated September 30, 1992;

Pursuant to the proposals of the Ministries of Agriculture and Rural Development (document No. 2813/BNN-TCKT dated August 5, 1999), Planning and Investment (document No. 5613/BKH/NN dated August 25, 1999), Finance (documents No. 4205/TC/TCDN dated August 24, 1999 and No. 4217/TC/ĐTPT dated August 25, 1999) and the State Bank of Vietnam (document No. 776/CV-NHNN14 dated August 23, 1999);

To create conditions for certain sugar factories to develop production, reduce product costs, sell products, repay debts, and operate effectively.

DECISION:

Article 1. Apply exemptions and reductions on land use tax for factory construction, corporate income tax, import tax... for certain sugar factories according to the Law on Encouraging Domestic Investment (amended) No. 03/1998/QH10 dated May 20, 1998, and Decree No. 51/1999/NĐ-CP dated July 8, 1999 of the Government detailing the implementation of the Law on Encouraging Domestic Investment (amended).

The Ministry of Planning and Investment shall take the lead and coordinate with relevant ministries, sectors, and localities to issue investment incentive certificates for factories within the scope mentioned above for implementation.

Article 2. The Ministry of Finance shall compile and submit to the Government for amending and supplementing the Decree guiding the Law on Value Added Tax to allow a reduction of 50% in the rate of value added tax on sugar products and apply a 0% value added tax rate on products using waste materials and by-products from sugar factories (bio-fertilizers, plywood, animal feed, mushrooms, alcohol, electricity, etc., using sugarcane bagasse, mud residue, and syrup as raw materials).

Article 3. For credit investment capital according to the state plan and the National Investment Support Fund that sugar factories have borrowed at an interest rate of 1.1% per month, an interest rate of 0.81% per month shall be applied from January 1, 1998 to December 31, 1999, and the interest rate according to Decree No. 43/1999/NĐ-CP dated June 29, 1999 on state investment credit for development shall be applied from January 1, 2000.

For loans taken at commercial interest rates for investment purposes (including mandatory debt) and continued loans for completing projects, an interest rate of 0.81% per month shall be applied from January 1, 1999 to December 31, 1999, and the interest rate according to Decree No. 43/1999/NĐ-CP dated June 29, 1999 on state investment credit for development shall be applied from January 1, 2000. The difference between the commercial interest rate and this rate shall be subsidized by the state budget for sugar factories, as detailed by the Ministry of Finance.

Lending organizations shall base their decisions on the ability to recover capital and actual debt repayment capacity of each sugar factory, after prioritizing the repayment of foreign loans according to loan contracts, to adjust the loan period for sugar factories according to the principle of accurately calculating all factors affecting debt repayment capacity and project effectiveness, but not exceeding 12 years in total, including 5 years of grace period for state-planned credit loans, and not exceeding 15 years in total, including 7 years of grace period for loans from the Asian Development Bank (ADB).

Article 4. The additional exchange rate difference increase in the value of imported equipment due to fluctuations between the US Dollar and the Vietnamese Dong shall be considered for support in accordance with the principle stipulated in Point e of Article 2 of Decision No. 802/TTg dated September 24, 1997 of the Government Prime Minister on handling existing issues regarding the issuance of letters of credit; the Ministry of Finance shall inspect and specifically determine the amount of loss arising from exchange rate risks, and submit to the Government Prime Minister for decision.

Article 5. The Ministry of Finance shall provide working capital to sugar factories operating in accordance with current regulations starting from 1999.

Article 6. This Decision shall only apply to certain sugar factories listed in the attached list and shall take effect from the date of signature.

Article 7. The Ministers of the Ministries of Agriculture and Rural Development, Planning and Investment, Finance, the Governor of the State Bank of Vietnam, the Chairmen of the People's Committees of provinces where there are sugar factories, and the Heads of relevant agencies shall be responsible for implementing this Decision.