Vietnam’s biggest software park has asked the Ho Chi Minh City to exempt individual income tax for its investors.
The proposal is designed to help Quang Trung Software Centre (QTSC) investors keep their heads above water in current difficult times. QTSC chairman Chu Tien Dung last week told Ho Chi Minh City’s People Council’s delegates that QTSC needed to remain competitive to attract software investors to Vietnam.
The QTSC, presently home to 102 software and IT services firms, received many incentives during 2010-2011. However, since the QTSC transferred from a company under the direct management of the city’s Department of Information Technology to a member limited liability company in 2011, some incentives came to an end, said Dung.
Dung said investors in the park now had to wait longer for an investment certificate and many investors asked QTSC for offering them preferential policies in assessing land prices, instead of market-based prices.
“I suggest the government continue to support enterprises and IT experts working in our focused software centre by exempting personal income tax (CIT),” said Luxsoft Vietnam managing director La Manh Cuong.
Mai Dinh Tiep, manager of Mai Anh Nam - investor of Anna Building in the QTSC, said CIT exemption would help specialised IT enterprises increase competitiveness amid the downturn.
Currently, 75 per cent of products and services of investors in QTSC serve overseas markets. When the economic crisis broke out, some big customers in America and Europe moved to Vietnam for software outsourcing to make use of cheap costs in Vietnam.
Last year, enterprises in QTSC generated revenue of $95 million, with $49 million from foreign markets.
Of the 102 investors in QTSC which occupy 93 per cent of the park, there are many prestigious multi-national companies such as HP, SHP Far East, IBM, Global Cybersoft, Luxsoft with production and research and development activities.
More than 22,000 people are working and studying in the park with the annual force labour growth rate at over 25 per cent.
Recently, the Vietnamese government decided to expand the QTSC model to a series in provinces and cities nationwide. A plan to build the second QTSC in Ho Chi Minh City is also on the table.