Vietnam targets tax reforms to boost domestic supply chain integration

Vietnam is exploring tax policy reforms to assist domestic companies in integrating more deeply into global supply chains. While foreign direct investment (FDI) remains strong, experts note that local firms currently capture a disproportionately small share of the value generated within these chains.

To address this, economists suggest using tax policy as a lever to incentivize investment in research and development, high technology, and supporting industries. As multinational corporations restructure production to prioritize sustainability, digital capability, and green growth, Vietnam aims to attract a 'new generation' of FDI. This strategy focuses on high-tech, innovation, and sustainable development rather than relying solely on low labor costs.

Data shows that in the first eight months of the year, disbursed FDI reached $17.25 billion, a 12% increase compared to the previous year. The manufacturing and processing sector accounted for the vast majority of this capital, representing 82.6% of the total. This influx is driving increased demand for industrial land, warehouses, and logistics services, while shifting investor priorities toward policy transparency and infrastructure quality.