Incentives and financial supports for solid waste disposal facilities in Vietnam

Incentives and financial supports for solid waste disposal facilities in Vietnam (Internet image) 

Circular 121/2008/TT-BTC stipulates the incentives and financial supports for solid waste disposal facilities in Vietnam as follows:

Incentives regarding land use levy, land rent and ground compensation expenses in Vietnam

- Organizations and individuals making investment in the construction of solid waste disposal facilities that fully satisfy the conditions guided in Clause 1 of this Section are exempted from land use levy and land rent in case their land is allocated by the State with the collection of land use levy or is leased by the State.

- Organizations and individuals making investment in the construction of solid waste disposal facilities that satisfy the conditions prescribed in Clause 1, this Section shall be considered and provided with supports for compensation and ground clearance expenses as follows:

• Vietnamese organizations and individuals making investment in the construction of solid waste disposal facilities are obliged to pay compensation for ground clearance and resettlement supports (if any) as prescribed by law on compensations, support and resettlement and they are allowed to account these amounts into their projects' investment capital.

• Provincial-level People's Committees shall base themselves on the size and significance of solid waste disposal facilities and the local budget capacity to consider and decide to support part or the whole of compensation, support and resettlement expenses already paid by organizations and individuals making investment in solid waste disposal facilities.

• Foreign organizations and individuals or overseas Vietnamese making investment in the construction of solid waste disposal facilities are not required to pay compensations and resettlement supports as prescribed by the law on compensation and resettlement supports; if they have paid these amounts, they are allowed to account them into their projects' investment capital.

Investment supports from state budget sources in Vietnam

- State budget supports: Based on the local budget capacity, provincial-level People's Committees shall consider and propose the People's Councils of the same level to allocate investment capital from the local budget for the construction of roads, electricity and power supply systems; information and communication systems; water supply and drainage systems up to project fences.

- Investment supports from official development assistance (ODA) sources: Solid waste disposal facilities are prioritized in attracting ODA capital and may apply financial mechanisms like daily-life garbage and urban solid waste disposal projects prescribed in the Finance Ministry's Circular 108/2003HT-BTC of November 7, 2003, and Circular 08/2008/TT-BTC of January 20, 2008, guiding financial mechanisms applicable to ODA-funded environmental sanitation projects.

- Investment supports from preferential credit sources: Organizations and individuals making investment in the construction of solid waste disposal facilities are provided with credit supports in the forms of investment loans, post-investment interest rate supports and investment credit guarantee from the Vietnam Development Bank, Vietnam Environmental Protection Fund or local environmental protection funds (if any), if they satisfy all conditions prescribed for each form of guarantee. Investment supports will be provided under current legal provisions and the lenders' charters.

Tax incentives

- Import duty incentives

• Equipment imported to create fixed assets of solid waste disposal facilities is exempted from import duty.

• Raw materials and supplies imported for production activities of solid waste disposal facilities are exempted from import duty for 5 years, counting from the time solid waste disposal facilities commence operation.

• Dossiers and procedures for import duty exemption comply with the import duty and export duty law.

- Enterprise income tax incentives: Eligible solid waste disposal facilities are entitled to enterprise income tax exemption or reduction and preferential enterprise income tax rates as prescribed by the current enterprise income tax law.

Supports for research into and development of solid waste recycling, re-use and disposal technologies

- Organizations and individuals making investment in the construction of solid waste disposal facilities are provided with state budget supports for research into and development of solid waste recycling, re-use and disposal technologies through scientific and technological programs and projects.

- The maximum support level does not exceed 30% of the total funds for research schemes to create new technologies, which are implemented by the establishments themselves or in collaboration with scientific institutions.

Labor training supports

- Training expenses for laborers (salaried by solid waste disposal facilities) are allowed to be accounted as reasonable expenses according to law.

- When necessary, on the basis of training plans to provide basic knowledge for laborers at solid waste disposal facilities, People's Committees at various levels shall, basing themselves on the local budget capacity, consider and provide training supports for these trainees under Decree 69/2008/ND-CP of May 30, 2008, on policies to boost socialization in the domains of education, job-training, healthcare, culture, sports and environment, and guiding documents.

More details can be found in Circular 121/2008/TT-BTC,which comes into force from January 14, 2009.

Ngoc Tai

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