HCMC – National Assembly (NA) deputies have thrown their weight behind a special mechanism of delegating more decision-making power to HCMC to allow it to remove legal bottlenecks and thus fuel growth.
NA deputies yesterday discussed a draft of a resolution on a special mechanism for HCMC, which was submitted by the central Government on November 4.
NA deputy Duong Trung Quoc supported such a resolution, saying this empowerment mechanism would serve as a driving force for HCMC to achieve higher economic growth, which will benefit the whole country in the end.
Deputy Nguyen Thi Mai Hoa said new ideas originated in HCMC in the 1980s, such as the establishment of export processing and industrial zones, which have since helped boost economic growth.
Vietnam’s first commercial joint stock bank was also established in the city in October 1987 and the NA approved an ordinance on banks in 1990. HCMC was the pioneer in applying the “land for infrastructure” policy to develop infrastructure.
The city should be given more authority so that its economy could grow stronger, creating growth momentum for other parts of the country.
Deputy Hoa proposed giving the city more decision-making power regarding fee and tax adjustments, tax hikes on sectors negatively affecting the country’s development and tax reductions for potential sectors.
Deputy Vu Thi Luu Mai underscored the need to issue a property tax law as property tax revenue accounts for a mere 0.03% of the country’s gross domestic product (GDP) while the rates are 10% in Japan, 7% in Sweden and 4% in Canada. However, it is unfair if the law is enforced in HCMC alone.
Deputy Duong Minh Tuan said the city is facing increasingly tough challenges such as traffic congestion, environmental pollution and population growth, so a special mechanism for it to solve them is needed.
However, the property tax law should be applied in both HCMC and Hanoi.
Meanwhile, deputy Phan Thai Binh said the resolution, if passed, should be piloted in HCMC first. He also suggested taxing those owning a second lot of land in the city.
Minister of Finance Dinh Tien Dung said HCMC is Vietnam’s biggest economic hub, so the special mechanism would create favorable conditions for it to grow faster and contribute more to the country’s GDP and budget revenue, said the minister.
The city’s economic growth has slowed from 10.7% in 2010 to 9% in 2015 due to legal bottlenecks.
The NA should allow the city to make decisions on land management and investment, budget allocation, and incomes of civil servants and officials.
If the NA approves the resolution, the city should assess impacts on the business environment before it decides to hike taxes, Dung added.