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Friday,  Dec 15,2017,23:02 (GMT+7)

Heavy burden for HCMC Council

The Saigon Times Daily
Monday,  Nov 27,2017,23:09 (GMT+7)
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Heavy burden for HCMC Council

The Saigon Times Daily

The mood of satisfaction is overwhelming in HCMC as the National Assembly on Friday issued a resolution granting a special mechanism for the country’s biggest city. Under Resolution 54/2017/QH14, the city is given greater autonomy in a large swathe of socio-economic areas, which will help create new resources for its development. But a huge burden is also looming large for HCMC authorities, especially the People’s Council.

Most significant among the incentives stated in the resolution are probably the city’s authority to turn vast areas of rice-farming land into service land to create new revenue, its power to approve State-funded Grade-A projects that should otherwise be within the Prime Minister’s authority, and its privilege to slap new taxes and fees, and to raise taxes by up to a quarter against the national rates for goods and services subject to the environment protection tax and the special consumption tax.

Such policies, alongside the right to retain extra tax revenue over the target plus proceeds from sales of State stakes in enterprises under the city’s supervision, will create huge financial resources for the cash-strapped city.

All such powers and privileges, however, must be translated in policies and procedures, as per the resolution, and thus the burden is now transferred to the municipal People’s Council.

Take, for example, the privilege to raise taxes by up to 25% against the national rates for goods and services subject to the environmental protection tax and the special consumption tax. As the city’s market is part of the national market, the question here is how to regulate internal competition, since goods from low-tax localities may flow into the city where tax rates will be higher.

Plastic bags, pesticides and fuels among others subject to the environmental protection tax can penetrate the city’s market, and likewise, beer, alcoholic drinks, tobacco, and numerous other items subject to the special consumption tax from elsewhere in the country can exert pressure on the city-based enterprises.

Barriers cannot be erected, since the National Assembly in the new resolution makes it clear that the city “must guarantee the unanimous market, without barring the free circulation of goods and services.”

The HCMC People’s Council will convene its regular meeting early next month, and the top one among issues on the agenda will be how to implement the resolution. Numerous policies requiring professional skills and knowledge must be designed and deliberated at the meeting so as to translate the resolution into specific measures, procedures and regulations.

Nguyen Thien Nhan, secretary of the HCMC Party Committee, says in full-length articles authored by himself in several newspapers on Saturday that the city and relevant agencies will have to quickly implement the resolution in the remaining three years of the tenure, and make a report to the National Assembly on the achievements stemming from the new mechanism. Time flies, and as the resolution is valid for only five years from January 15, 2018, the heavy burden will instantly come upon the Council’s shoulder.
 

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