Medical equipment incentive push

The Ministry of Finance (MoF) is contemplating the proposal for partial or total import duty exemption regarding seven kinds of medical components.

The proposed tax break will be applied to components which have yet to be produced locally being imported to produce or assemble medical equipment of seven categories specified in Decision 18/2005/QD-TTg approving the project on research and manufacture of medical equipment.

To enjoy such incentives, businesses need to satisfy certain conditions. Particularly, the components shall be imported by or imported under proxy from businesses sufficiently meeting conditions for manufacture or assembly of medical equipment as regulated by the Ministry of Health (MoH).

These components must be on the list of MoH certified technical designs for medical equipment manufacture and not belonging to the list of materials and semi-processed items which can be made locally enacted by competent state agencies.

Businesses shall incur sanctions if they do not use imported components enjoying tax breaks for manufacturing items specified in seven stated medical equipment groups.

The MoH argues the scope of component for tax break should be expanded since the country is currently home to around 100 units embracing research and manufacture of medical equipment diverse in size and types.

Hence, the MoF needed to consider tax incentives to all sorts of components imported to service medical equipment manufacture domestically.

Disagreeing with this view, the MoF said medical tax breaks were only to encourage import of components for manufacture of medical equipment within the state development orientations.

The MoF argued that medical equipment was widely diversified and many types were used in areas outside the health sector, so that the MoH proposal was unfeasible.

Earlier in July 2012, the MoH was tasked by Deputy Prime Minister Nguyen Thien Nhan to develop and enact a list of medical equipment featuring high usage efficiency to be prioritised for domestic investment and production.

Locally produced medical equipment shall receive priority within the framework of projects and programmes on equipment procurement to state budget medical facilities.

The MoF was tasked to work on mechanisms to be submitted to the prime minister to support the import of components for medical equipment manufacturing and assembly domestically.
 
This was not the first time such proposal was voiced. In January 2010, Deputy Prime Minister Nguyen Thien Nhan asked the MoH to joint efforts with the MoF and Ministry of Industry and Trade to present support measures to local units embracing research and manufacture of domestic equipment.