But since the economic situation in Vietnam is still gloomy, especially for businesses, the National Assembly deputies agree for the moment not to reduce the number of products that enjoy the preferential rate, particularly as they are predominately goods required as inputs for the agricultural sector and essential commodities.
A VAT is like a sales tax in that only the end consumer is taxed, but it different from a sales tax by how it is collected and remitted to the government only once. So as long as the government continues to protect its preferential rate for certain products, foreign companies will still be able to enjoy some of the benefits that come with doing business in the country.
Chinese businesses have been on a recent streak of buying companies in Vietnam. In 2011, Chinese investors registered 4.4 billion dollars worth of foreign direct investment projects in Vietnam, accounting for 30 percent of the year registered investment capital. The number, according to StoxPlus, is even higher than that of Japan (2.4 billion dollars) and Singapore (2.2 billion dollars). Chinese capital has been poured mostly into manufacturing and processing industries, civil engineering and infrastructure.
