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Ha Tinh Province violated Formosa licensing

access_time Jul 08,2016 chat_bubble_outline 203 views

A recent Government Inspectorate investigation found Ha Tinh Province had violated regulations in approving the lifespan of the Formosa Plastics Group’s steel project.

Ha Tinh Province violated Formosa licensing

Formosa's steel project in Ha Tinh

According to the inspection, provincial authorities licenced the Formosa  steel project at Vung Ang Economic Zone for 70 years, instead of 50 years as regulated in the country’s Law on Investment.

Under the law, in special cases, the government can consider extending the project lifespan, but by no more than 70 years. However, the authorities in Ha Tinh unilaterally made the offer.

Formosa also benefits from a four-year corporate tax exemption. The firm will benefit from a 50% discount for the following nine years, while during the remainder of its operations, only pay a corporate tax rate of just 10%, compared to 22% as regulated.

Formosa has also been offered free land rent for the first 15 years of operation. The inspection also indicated that to date, Formosa, despite all the generous incentives, still owed Ha Tinh Province VND46 billion (USD2.1 million) in land rentals.

Formosa has also not yet paid VND136.76 billion in environmental protection taxes for its sand extraction and clearance for carrying out the project.

The Government Inspectorate has proposed the prime minister instruct the Ministry of Planning and Investment to check the process in which Ha Tinh Province approved the 70-year lifespan of Formosa’s steel project as well as land lease as well as tax priorities for the firm.

Taiwan’s Formosa Plastics Corp. has taken full responsibility for a toxic discharge from its Vietnamese steel plant that led to the recent mass fish deaths and massive damage to the economy of four nearby provinces.

Formosa admitted liability and have offered USD500 million in compensation.

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