To: Commercial Banks

On 31 December, 1998, the Governor of the State Bank issued the dispatch No. 1258/ CV-NHNN1 on the lending for the purpose of tax payment, capital contribution to joint-ventures under which commercial banks are permitted to lend to enterprises for purpose of tax payment for goods, services to be imported, exported in 1999 and investment in joint-venture projects. After a time period of implementation, this type of lending is viewed by localities and commercial banks to have actively contributed to the implementation of the Law on value added tax and the good results of new tax laws and created favorable conditions for the production, business and investment activities of enterprises.

At present the extension of credits to enterprises for the payment of export-import taxes is made mainly through the issue of bank guarantees in accordance with current applicable laws, whereas the lending for purpose of capital contribution to joint-ventures due to some obstacles arising from the side of enterprises and from the application of provisions of applicable laws will not produce high efficiency. The State Bank, therefore, announces the termination of the effectiveness of the dispatch No. 1258CV-NHNN1 dated 31 December, 1998 on the lending for purpose of tax payment, capital contribution to joint-ventures as from 01 July, 1999.

FOR THE GOVERNOR OF THE STATE BANK
DEPUTY GOVERNOR




Le Duc Thuy