DECISION

ON FINANCIAL TREATMENT FOR A NUMBER OF SUGAR PLANTS

THE PRIME MINISTER

Pursuant to the Law on Organization of the Government of September 30, 1992;
At the proposals of the Ministry of Agriculture and Rural Development (Official Dispatch No.2813/BNN-TCKT of August 5, 1999), the Ministry of
Planning and Investment (Official Dispatch No.5613/BKH/NN of August 25, 1999), the Ministry of Finance (Official Dispatch No.4205-TC/TCDN of August 24, 1999 and Official Dispatch No.4217-TC/DTPT of August 25, 1999 and the State Bank of Vietnam (Official Dispatch No.776/CV-NHNN14 of August 23, 1999);
In order to create conditions for a number of sugar plants to develop production, reduce their production costs, sell their products, pay debts and do business efficiently,

DECIDES

Article 1.- To exempt and/or reduce levy on land user for plant construction, enterprise income tax, import tax,... for a number of sugar plants in accordance with the Domestic Investment Promotion Law (amended) No.03/1998/QH10 of May 20, 1998, the Government's Decree No.51/1999/ND-CP of July 8, 1999 detailing the implementation of the Law on Domestic Investment Promotion (amended).

The Ministry of Planning and Investment shall assume the prime responsibility and coordinate with the ministries, branches and localities in granting investment preference certificates to the above-said plants for implementation.

Article 2.- The Ministry of Finance shall make sum-up report and submit it to the Government for amendment and/or supplement to the Decree which guides the implementation of Value Added Tax (VAT) Law along the direction of allowing 50% reduction of VAT for sugar products and applying VAT rate of 0% (zero per cent) to products made of discarded materials and/or by-products of sugar plants (microbiological fertilizers, pressed boards, animal feed, mushrooms, alcohol, electricity,... with cane's remains, sludge residues, leaked molasses being used as raw materials).

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For commercial interest rate loans used for investment (including compulsory loan debts) and loans for further investment to complete the projects, the monthly interest rate of 0.81% shall also apply from January 1, 1998 to the end of December 31, 1999 and the interest rate stipulated in Decree No.43/1999/ND-CP of June 29, 1999 on the State's development investment credits shall apply as from January 1, 2000. The difference between the commercial interest rate and this interest rate shall be offset by the State budget for the sugar plants under the concrete guidance of the Ministry of Finance.

Lending organizations shall base themselves on capital recovery possibility and actual debt repayment capability of each plant, after giving priority to repayment of foreign loans according to lending contracts, to adjust lending terms for the sugar plants on the principle of taking into full and accurate account the factors affecting loans debt repayment and the project efficiency, but the lending terms must not exceed 12 years including the 5-year grace period for credit loans under the State's plans, and not exceed 15 years including the 7-year grace period for the loans from the Asian Development Bank (ADB).

Article 4.- The difference increase in the value of the imported equipment due to fluctuation of the exchange rate between US dollar and Vietnam dong shall be considered for support in accordance with the principles stipulated at Point e, Article 2 of Decision No.802/TTg of September 24, 1997 of the Prime Minister on solving the existing problems in opening letters of credit; the Ministry of Finance is assigned to inspect and determine the specific arising loss amount incurred due to exchange rate risk to report it to the Prime Minister for decision.

Article 5.- The Ministry of Finance shall provide working capital for the sugar plants to operate from 1999 on according to current regulations.

Article 6.- This Decision applies only to a number of sugar plants on the list enclosed herewith and take effect after its signing.

Article 7.- The Minister of Agriculture and Rural Development, the Minister of Planning and Investment, the Minister of Finance, the Governor of the State Bank of Vietnam, the presidents of the People's Committees of the provinces having sugar plants and the heads of the concerned agencies shall have to implement this Decision.

FOR THE PRIME MINISTER
DEPUTY PRIME MINISTER




Nguyen Tan Dung

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LIST OF SUGAR COMPANIES AND PLANTS
(Issued together with Decision No.194/1999/QD-TTg of September 23, 1999)

Ordinal number

Names of newly-established sugar companies and plants

In provinces

1

Tuyen Quang Sugar Cane and Sugar Company

Tuyen Quang

2

Son Duong Sugar Company, Tuyen Quang (Sugar Cane and Sugar Corporation No.I)

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3

Linh Cam Sugar Company (Sugar Cane and Sugar Corporation No.I)

Ha Tinh

4

Cao Bang Sugar Cane and Sugar Company

Cao Bang

5

Son La Sugar Cane and Sugar Company

Son La

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Hoa Binh Sugar Cane and Sugar Company

Hoa Binh

7

Viet Tri Sugar-Liquor-Beer Company (Sugar Cane and Sugar Corporation No.I)

Phu Tho

8

Nong Cong Sugar Company (Sugar Cane and Sugar Corporation No.I)

Thanh Hoa

9

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Thanh Hoa

10

Song Con Sugar-Liquor Enterprise (Nghe An Sugar Cane and Sugar Company)

Nghe An

11

Quang Binh Sugar Company (Sugar Cane and Sugar Corporation No.I)

Quang Bimh

12

Quang Nam Sugar Plant (Food and Foodstuffs Industry Company)

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13

Expanded Quang Ngai Sugar Plant (Quang Ngai Sugar Company)

Quang Ngai

14

Nam Quang Ngai Sugar Plant (Quang Ngai Sugar Company)

Quang Ngai

15

Binh Dinh Sugar Company

Binh Dinh

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Tuy Hoa Sugar Cane and Sugar Company (Sugar Cane and Sugar Corporation No.II)

Phu Yen

17

Cam Ranh Sugar Plant (Khanh Hoa Sugar Company)

Khanh Hoa

18

Ninh Hoa Sugar Plant (Khanh Hoa Sugar Company)

Khanh Hoa

19

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Binh Thuan

20

Kon Tum Sugar Cane and Sugar Company

Kon Tum

21

Dak Lak Sugar Cane and Sugar Company

Dak Lak

22

Sugar Cane and Sugar Company No.333 (Vietnam Coffee Corporation)

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23

Tri An Sugar Cane and Sugar Company

Dong Nai

24

Tay Ninh Crude Sugar Plant (Bien Hoa Sugar Company)

Tay Nimh

25

Ben Tre Sugar Company

Ben Tre

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Phung Hiep Sugar Plant (Can Tho Sugar Cane and Sugar Company)

Can Tho

27

Vi Thanh Sugar Enterprise (Can Tho Sugar Cane and Sugar Company)

Can Tho

28

Soc Trang Sugar Cane and Sugar Company

Soc Trang

29

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Kien Giang

30

Thoi Binh Sugar Company

Ca Mau