The impact of tax incentives on attracting foreign direct investment

Tax incentives are a key instrument in attracting and sustaining foreign direct investment (FDI). However, their implementation also presents challenges related to the effectiveness of investment attraction, fiscal impacts on the state budget, and competitive pressures from other countries in the region. This study evaluates Vietnam’s current tax incentive policies, assessing both their positive contributions and potential drawbacks in relation to FDI inflows. Based on this analysis, the study proposes policy recommendations aimed at optimizing the economic benefits of FDI while ensuring fiscal sustainability and maintaining Vietnam’s competitive position in the regional investment landscape.