Vietnam’s Ministry of Trade officially announced to repeal consideration of rewarding domestic enterprises for export achievements on July 2nd 2007.

According to new regulations, export bonus regulations at the Decision No. 02/2002/QÐ-BTM dated January 2nd 2002 will be not enforced. The Reward Consideration Commission of the Ministry of Trade will be dissolved.

It is not unpredictable. Repealing regulations on export bonus was announced many times by the Ministry of Trade because it is a stage in the road map of Vietnam’s honouring WTO commitments.

WTO regulations on subsidies mainly focus on distinguishing allowed and forbidden types of subsidy. Allowed subsidies include assistance in development researches, assistance for poor areas, assistance in environment protection, and so on. Forbidden subsidies that mainly include export subsidies or import substitution subsidies will be abolished completely.

In WTO commitments, namely Vietnam has to remove all export subsidies on agricultural products right after joining this organization; domestic assistance remains at 10% of output value as other members of WTO. However, according to the Ministry of Trade, these domestic assistance is really lower than 10%.

In industry, types of subsidies need abolishing since WTO accession moment include export subsidies, import substitution subsidies, and subsidies extracted directly from State Budget. With projects starting operations, forbidden subsidies such as export investment incentives and import substitution industry incentives will be removed after joining WTO for 5 years. However, these incentives are not provided to projects that are set up after joining WTO. For just only forbidden subsidies on textile industry must be abolished as soon as Vietnam joins WTO.

Export bonus has been awarded by the Ministry of Trade since 1998. Awarded enterprises and bonus have considerably increased after each year in company with the growth in nation’s common export turnover.

In 1998, 66 enterprises were rewarded with the bonus of 4,685 billion Vietnam dongs; in 1999, 106 enterprises were rewarded with the bonus of 6,210 billion Vietnam dongs; in 2000, the number of enterprises increased and reached 158 with the bonus of 10,595 billion Vietnam dongs; in 2001, 196 enterprises were rewarded with the bonus of 12,744 billion Vietnam dongs; in 2002, 222 enterprises were rewarded with the bonus of 16,368 billion Vietnam dongs; in 2003, 232 enterprises were rewarded with the bonus of 19,532 billion Vietnam dongs; and in 2004, 349 enterprises were rewarded with the bonus of 29,408 billion Vietnam dongs.