BUSINESS IN BRIEF 21/2
Wide range of customs issues tabled at APEC meeting
The General Department of Vietnam Customs (Vietnam Customs) is chairing the first meeting of the APEC Sub-Committee on Customs Procedures (SCCP) in Nha Trang city from February 21-23.
The event has drawn more than 50 delegates of customs agencies from the 21 APEC economies. It is part of the ongoing first APEC Senior Officials’ Meeting in Nha Trang, south central Khanh Hoa province.
With this year’s APEC events themed “Creating New Dynamism, Fostering A Shared Future”, the meeting will look into the priorities of the Asia-Pacific region such as promoting sustainable, creative and inclusive growth; enhancing regional economic connectivity; improving the competitiveness and creativity of micro-, small- and medium-sized enterprises; strengthening food security and sustainable agriculture to adapt to climate change.
The function will focus on implementing the WTO Trade Facilitation Agreement and the single-window mechanism, IT application and risk management in customs management, the management of cross-border implementation of intellectual property rights, and the enhancement of cross-border e-commerce.
Vietnam Customs suggested the APEC economies connect the single-window mechanism, increase sharing information about and experience in fighting smuggling and trade fraud, thereby helping customs agencies facilitate trade and ensure trade security in regional supply chains.
These are also major targets of the Collective Action Plan, which the SCCP submitted to the APEC Secretariat for approval in 2016.
Vietnam wants the member economies to boost experience sharing, assistance in capacity improvement, and technical support among customs agencies to intensify customs cooperation in the region, Vietnam Customs said.
Dung Quat refinery sees 2017 gross profit down on lower oil prices
The refinery's shorter production period due to routine maintenance will also contribute to falling revenues.
Dung Quat refinery, Vietnam's sole such facility, is expected its gross profit to plunge 66% this year to VND1.68 trillion (US$74 million) on an expected drop in crude oil prices and shorter production time, its operator firm said.
Revenue this year by state-owned Binh Son Refining and Petrochemical Co, an affiliate of national oil and gas PetroVietnam group and which operates the US$3 billion refinery, is expected at VND62.4 trillion, down 17% from 2016, the company said in its financial statement published for the first time.
“The target has been set cautiously, based on the scenario with oil prices at US$50 per barrel," Chief Executive Officer Tran Ngoc Nguyen told VnExpress, "but we will strive [for higher revenues] since oil prices have edged up on the world market and the refinery’s planned maintenance plan can be shorter than initially expected.”
The routine maintenance, its third since operation of the refinery capable for processing 6.5 million tons of crude oil a year (130,500 barrels per day) began in 2011, has been scheduled for mid-2017 and last 52 days, Nguyen said.
Binh Son has planned to conduct its initial public offering by late June 2017.
The refinery, in the central province of Quang Ngai, now meets around a third of Vietnam's demand for fuel and oil products.
Footwear exports tend to rise from midyear
Footwear exports have constantly increased in recent years from US$6.5 billion in 2011 to US$13 billion in 2016, according to the General Department of Vietnam Customs.
It analysed that footwear exports often begin rising in the second quarter and obtain the highest growth in the third quarter of the year.
The US has been the leading importer of Vietnam footwear for many years. Footwear exports to the market have accounted for 30% of the country’s total footwear export value and 11% of the country’s total exports to the world largest economy.
Last year, the US imported US$4.484 billion worth of Vietnamese footwear products, a year-on-year rise of 10%. Other major importers of Vietnamese footwear included China (US$904.9 million, up 20%), Belgium (US$825.4 million, up 14%), Germany (US$764.7 million, up 8.4%) and Japan (US$674.9 million, up 12.9%).
However, according to a latest report from Vietnam Customs, footwear exports hit only US$1.169 billion in January, down 4.8% against the same period last year.
Barriers challenge Vietnam investors in Laos, Cambodia
Changing policies and strict quotas for guest workers are among the key barriers to Vietnamese investors in Laos and Cambodia, the two neighboring countries that account for over one-third of Vietnam’s outbound investments.
The hindrances were pointed out at a seminar held in Hanoi last week on opportunities and challenges for Vietnamese investors in Laos and Cambodia.
Vietnamese firms have got involved in nearly 1,200 projects worth a total of roughly US$21.4 billion in Russia, Africa, Laos, Cambodia and other overseas markets. The total comprises of more than US$5 billion in Laos and almost US$3 billion in Cambodia.
Vietnamese investment in Laos and Cambodia mainly concentrates on the agricultural-forestry sectors, telecommunications, mining and medical treatment which Vietnamese businesses have an advantage, heard the seminar.
Vietnamese firms have registered a combined US$2.2 billion for rubber plantation projects in the two neighboring countries. Of which, Vietnam Rubber Group has invested in 23 projects while Hoang Anh Gia Lai Group has poured money into four projects.
The Foreign Investment Agency under the Ministry of Planning and Investment said Vietnam’s increasing offshore investment has shown the fast expansion of many local businesses and the country’s economy. However, Vietnamese companies have to grapple with multiple challenges when investing in overseas projects, especially those in Laos and Cambodia.
Vietnamese firms have to struggle with legal changes in Laos and Cambodia as the two countries are improving their investment regulations. Cambodia has suspended allocation of land to agricultural-forestry projects or reduced the durations of the land leases to all projects to 50 years from the previous 70-90 years, including the land already allocated to investors.
Such changes have made life hard for foreign investors and affected their legitimate rights, heard the seminar.
Vietnamese investors of rubber projects have had difficulty getting sufficient as land as pledged by the host country.
Another challenge relates to a regulation of Cambodia which allows the Vietnamese guest workers to make up only 10% of their total headcount even though they cannot find sufficient local workers.
The regulation has posed barriers to a 6,310-hectare rubber plantation of Dau Tieng-Kratie Joint Stock Company and rubber planting projects of Daklak Rubber Co Ltd and Phu An Real Estate Co Ltd.
Pham Quang Tu of Oxfam Vietnam said a number of Vietnamese firms sought land for rubber tree planting in Laos and Cambodia in 2007-2008 while the world rubber price was leaping. Investors rushed to get land and carry out site clearance immediately after they obtained licenses for their projects despite different land zoning plans in various regions. So interest conflicts between investors and local people were inevitable, affecting the lives of locals and the production of investors.
To solve the problems, the agency proposed investors and local governments step up cooperation in exchanging information about investment policies, building a transparent investment environment and making full use of their resources.
The agency requested Cambodia to avoid the impact of new policies on the projects already licensed to foreign investors including those from Vietnam. It is important for Cambodia to simplify cross-border procedures for goods transport, facilitate preservation and tests of farm produce, and consider exempting visas for guest workers at Vietnamese-invested projects.
Ministry told to seek ways to catch up with new industrial revolution
The Government has told the Ministry of Science and Technology to work with relevant ministries and agencies to propose ways to mobilize resources to make the most of opportunities afforded by the world’s fourth industrial revolution.
Proposed ways should be submitted to the Prime Minister for consideration this month, heard a meeting held by the Ministry of Science and Technology in Hanoi last week to gather comments to improve a draft report on how the country could benefit from the fourth industrial revolution.
Dam Bach Duong, head of the Hi-tech Department at the Ministry of Science and Technology, told the meeting that the report will detail technological trends and their impacts, lessons of countries, potential and capability of Vietnam, opportunities and challenges, and orientations for the country to leap forward alongside the fourth industrial revolution.
Deputy Minister of Science and Technology Pham Dai Duong said trends of the industrial revolution have been seen in a number of sectors.
Representatives of the ministries of transport, industry-trade, education and training, and agriculture-rural development, and the central bank stressed the need to conduct an overall assessment of the country’s economy, especially in terms of financial and labor issues.
They agreed that the fourth industrial revolution would lead to changes to production, corporate governance and social structure. These require solutions to problems related to technology, infrastructure connectivity, laws and policies.
The industrial revolution will leave both positive and negative impacts on countries, including Vietnam. Relevant ministries and agencies should weigh pros and cons of the revolution before suggesting viable measures for submission to the Government for approval to help the nation optimize opportunities from the revolution and reduce its negative impacts.
Experts warned the fourth industrial revolution would spark public concerns about further applications of digital technology, the sharing of information on social media, social morality and technological risks. Vietnam will be left behind the world’s development pace if the country cannot find effective ways to cushion the negative impact of the revolution.
Therefore, the technology ministry proposed the Government tell ministries and agencies to evaluate how the industrial revolution will impact the sectors they oversee and suggest coping measures so that a comprehensive strategy is mapped out for the country to fully seize opportunities from the industrial revolution.
The first industrial revolution was developed in 1784 based on the use of water and steam energy to mechanize production while the second industrial revolution starting in 1870 counted on electric energy to create large-scale manufacturing. Electronic and information technology was the driving force in the third industrial revolution in 1969 to automate production.
Tuan Chau, Vingroup to develop luxury resorts in Can Gio
Tuan Chau Group and Vingroup are proceeding with projects to develop coastal luxury resorts in Can Gio District, which the HCMC government expects to boost the development of resort tourism in the city’s outlying coastal district.
Le Minh Dung, chairman of Can Gio District, said Vingroup has proposed expanding the area of its resort on reclaimed land in the district to nearly 1,000 hectares from the current 600 hectares while Tuan Chau wanted to build a resort on 300 hectares in the coastal area of Can Thanh.
Dung told the Daily that Tuan Chau’s resort is planned to go up next to the resort of Vingroup.
Can Gio District has been told to revise the zoning plan for the entire coastal area of the district, Dung said. He added the Government previously gave ‘in principle’ approval to the resort on 600 hectares but the investor now wanted the area to increase to 1,000 hectares.
In addition to new tourism projects, the city government will help Can Gio District diversify tourism products and make the most of its potential related to seafood and tours to its mangrove forests, island of monkeys, and places to produce swallow nests, HCMC vice chairman Tran Vinh Tuyen said.
Tuyen said the city government had thrown its weight behind Can Gio District’s effort to develop more tourism products during his field trip to the district last Saturday.
Tuyen told reporters during his field trip that the city would create favorable conditions for Can Gio to boost tourism by organizing free-of-charge services for tourists to travel from the center of the city to the district, investing more in infrastructure development and calling for businesses to build more rest stops in the district.
“Can Gio’s potential and natural advantages are huge and they should be developed to turn the district into an appealing destination for not only domestic tourists but also those from abroad,” Tuyen said.
In November 2016, HCMC proposed the Ministry of Planning and Investment seek the Prime Minister’s nod to add a 36-hole golf course covering 135 hectares in Can Gio to the national zoning plan for golf course development until 2020. The Can Gio Golf Club project planned by Can Gio Tourism Urban Area Joint Stock Company under Vingroup costs around VND900 billion (US$39.6 million), excluding site clearance cost and loan interest.
Can Gio is in southeastern HCMC and 60 kilometers from the city’s downtown area. The district is crisscrossed by canals and rivers and home to mangrove forests which were recognized as a world biosphere reserve by UNESCO in 2000.
Can Gio, which has a coastline of more than 13 kilometers, attracted one million visitors and gained tourism revenue of VND400 billion (around US$17.6 million) last year. It targets more than one million tourists this year.
Realty brokers assoc opens office in Mekong Delta
The Vietnam Association of Realty Brokers under the Vietnam Real Estate Association (VNREA) on Saturday opened a representative office in the Mekong Delta city of Can Tho.
The office will be a representative organization for all realty businesses, exchanges, and individuals active in the field of real estate brokering in the delta.
Nguyen Manh Ha, chairman of of the association, told the opening ceremony that the association of realtors in Can Tho will support and protect the legitimate interests of real estate firms and those working in the industry.
Real estate brokerage has long been a globally legal activity to facilitate the development of the property market, where it acts as an intermediary between sellers and buyers of real estate products, Ha noted.
After ten years of implementing the Law on Real Estate Business in Vietnam, enterprises and individuals involved in the brokerage business have grown strongly in both quantity and quality.
The brokering service now attracts the participation of tens of thousands of people who work as real estate brokers. Of which, some 30,000 brokers have gained trading certificates, Ha said.
According to a report of the Housing and Real Estate Market Management Department under the Ministry of Construction, the country currently has more than 1,000 real estate trading floors.
Besides, 90% of housing transactions on the market are made through real estate trading floors and independent brokers.
Currently, the association has nearly 3,500 members, mostly at large real estate trading floors nationwide. Meanwhile, the number of members in the office of the Mekong Delta amounted to 100.
Apart from the delta, the association of brokers also has previously opened its representative offices in HCMC, Hanoi, Danang City, Nha Trang City, and Haiphong.
Chinese province seeks investment opportunities in Dong Nai
A delegation from the Association for Friendship with Foreign Countries of China’s Jiangsu province visited the southern province of Dong Nai to seek investment opportunities, especially in hi-tech industries.
Meeting with the delegation, Tran Van Vinh, Vice Chairman of the provincial People’s Committee, said Dong Nai boasts a strong industrial development with 30 operational industrial zones.
The province now has valid 1,253 foreign-invested projects with a combined registered capital of 25.67 billion USD. Of which, 73 projects worth 935 million USD are invested by Chinese enterprises
Vinh said Dong Nai is willing to cooperate with Chinese enterprises in particular and foreign businesses in general in hi-tech and environmentally-friendly projects.
He also expressed hope for more effective economic collaboration between Dong Nai and Jiangsu in the future.
For his part, Yang Yong, Vice President of Jiangsu’s Association for Friendship with Foreign Countries, enterprises in his province are interested in investment opportunities in Dong Nai.
Vietnamese chicken breast to be exported to Japan
First batch of processed chicken breasts of a Dong Nai-based poultry company will be sold in Japan in July, according to the Animal Husbandry and Veterinary Branch of the southern province of Dong Nai.
The Koyu & Unitek Co., Ltd, located in the Long Binh Industrial Zone, has to form a closed production chain ensuring food safety to meet its partner’s standards, according to the Gon Giai phong (Liberated Saigon) newspaper.
The shipment is expected to open new opportunities for local farmers and help them lessen their dependence on the domestic market.
Koyu & Unitek will export about 300 tonnes of chicken breasts to Japan per month.
The southern province of Dong Nai is home to 16 million farmed chickens.
Tay Ninh approves 22 million USD fruit processing factory
The People’s Committee of Tay Ninh province last week approved in principle the development of a fruit and vegetable processing factory, expected to cost about 500 billion VND (22 million USD), in the locality.
Financed by Lavifood JSC, the factory will cover 150.000sq.m in Go Dau district. Construction will commence in March and completion is slated for October.
Products produced at the factory will be exported to several countries and regions, including the EU, the US, the Republic of Korea, Japan and Australia.
Lavifood JSC is also operating a fruit processing factory in the southern province of Long An, with a total capacity of 10,000 tonnes of products annually, said its general director Pham Ngo Quoc Thang.
Binh Duong aims for 20-percent tourism growth
The southern province of Binh Duong wants to attract more foreign direct investment for tourism development, aiming to achieve an annual growth of 20 percent in the next four years.
According to Huynh Ngoc Dang, Director of the provincial Department of Culture, Sports and Tourism, the locality needs about more than 6.3 trillion VND (277.2 million USD) to invest in the sector.
Local authorities will focus on protecting land funds for developing ecotourism, towards attracting foreign investment for high-quality service sectors, Dang said.
He added that attention will be paid to promoting tourism in combination with shopping and sports, ecotourism, and cultural tourism.
Additionally, tourism clusters will be formed, providing garden and trade-village tours, and tours to historical and cultural relic sites.
Binh Duong recorded an annual average increase of 2.3 percent in the number of visitors to the locality from 2011-2015.
The locality served 4.39 million holiday-makers in 2016, up 4.5 percent against the previous year. It raked in 1.2 trillion VND (52.8 million USD) from tourism activities, a year-on-year increase of 7 percent.
Bac Giang concentrates on infrastructure investment
The northern province of Bac Giang is paying heed to infrastructure investment in industrial parks and clusters to attract businesses.
This year, local authorities will focus on the implementation of large-scale projects such as the construction of an industrial park in Hiep Hoa district, a logistics centre in Bac Giang city, and a thermal power plant in Luc Nam district.
The provincial People’s Committee has put a public administrative centre into operation in September 2016 to reduce time and costs spent on administrative procedures by businesses.
The locality will hold meetings and dialogues every three months with entrepreneurs to help them remove difficulties.
From 2017, the province pledged to make it easier for enterprises to access land in line with the State’s Land Law 2013.
In January 2017, Bac Giang granted investment licenses to eight foreign direct investment projects with total registered capital of 159 million USD.
As such, the province has hosted 1,145 investment projects so far, including 270 FDI projects totaling 3,693 million USD.
Tuyen Quang calls for investment in tourism sector
The northern mountainous province of Tuyen Quang is preparing to hold a conference on investment, trade and tourism promotion in an effort to attract investment in the local tourism sector.
Nguyen Hai Anh, Vice Chairman of the provincial People’s Committee, said the conference will take place in on February 27 with the participation of around 600 representatives from major corporations and international organisations, and economic experts.
This is the first time the province has organised such a conference to introduce its advantages, potential, investment opportunities and incentives to local and international investors, he said.
Many of 15 projects Tuyen Quang is calling for investment this time are for tourism development, including the Song Lo Resort City, the Nui Dum and Phieng Bung ecological tourism areas, he added.
Anh said that considering tourism one of the province’s four economic breakthroughs, Tuyen Quang has been implementing many infrastructure projects serving tourism development. It has partnered with northwestern provinces and key tourist attractions to lure visitors.
The province welcomed 1.4 million tourists in 2016 and more than 400,000 in the first months of this year.
Tuyen Quang boasts great potential for tourism development as it is just three and a half hours by coach from Hanoi and is home to many revolutionary and historical relic sites, notably the Tan Trao special national historic relic site.
In addition, there are Mother Goddess temples, eco-tourist sites and ethnic groups’ cultural villages, among others.
The province has built its own tourism brand through the Tuyen Citadel Festival that coincides with the mid-Autumn Festival, displaying hundreds of giant lantern models.-
Tata Coffee takes step to setting up in Binh Duong
Tata Coffee, a subsidiary of Tata Group, is eyeing the southern province of Binh Duong for a US$50 million project in Vietnam, making good on a pledge last year.
Indronil Sengupta, a representative of the Indian conglomerate, informed Binh Duong authorities of the group’s proposal to invest the sum in a freeze dried instant coffee plant in the province.
The plant is expected to be located at the VSIP II Industrial Park, with a capacity of 5,000 tonnes per annum. The plant in Vietnam will serve global customers new freeze-dried coffee product mixes. Tata Coffee has made steady progress in growing its freeze-dried instant coffee business, which is now about 20 per cent of its overall instant coffee portfolio according to a Tata representative.
“This move is in line with the company’s strategy to strengthen its focus on differentiation and customer-centricity. Tata Coffee’s commitment to quality, process improvement, sustainability, and understanding customers will help us grow in this market,” said Sanjiv Sarin, the company’s managing director, in a press release late last year.
Freeze-dried coffee is a growing sector globally in the instant coffee segment, Tata Coffee said. Instant coffee accounts for about 20 per cent of the global coffee consumption, with freeze-dried instant coffee remaining the most popular.
The company said that it is India’s second-largest exporter of instant coffee, and the country’s largest producer of speciality coffee. It also exports green coffee – unroasted beans – to countries in Europe, Asia, the Middle East, and North America.
“Tata Coffee has made steady progress in growing its freeze-dried instant coffee business, which is now about 20 per cent of our overall instant coffee portfolio. Vietnam is considered an attractive business environment, and is the largest robusta coffee growing region. The plant will help us further expand our global footprint,” Sarin said.
Tata Coffee already has 19 manufacturing plants in southern India, including sites at Coorg, Chickmaglur, and Hasan in the Indian state of Karnataka, and in Theni district within Tamil Nadu.
Established in 1922, Tata Coffee is the largest integrated coffee plantation company in the world. Tata Coffee grows coffee on its own estates, processes the beans, exports green coffee, manufactures and exports instant coffee, and sells retail coffee with its own branding in its home market.
Vietnam is a major world coffee bean exporter. According to statistics published by the General Department of Vietnam Customs, Vietnam exported 1.79 million tonnes of coffee beans worth $3.36 billion last year.
High liquidity, but no drop in interest rates
Despite good liquidity in the banking system, the peculiarities in Vietnam’s monetary policy management has prevented the decline of interest rates on deposits, a central economic report said.
The Party Central Committee’s Commission for Economic Affairs in its Vietnam annual report in February 2017, entitled: ’2017 – Overcoming difficulties and continuing to develop’, said that it would be difficult to use inter-bank rate to impact the market interest rate due to the peculiarities in Vietnam’s money and banking policy management.
According to the commission, there is a major difference in the monetary policy management of Vietnam compared with other countries. The committee explained that in Thailand, Indonesia and many other countries, the monetary policy management is implemented in accordance with the inflation target. However, the monetary policy management in Vietnam is for multi-purposes, including inflation control, foreign exchange stability and capital control.
It defeats these purposes, when there is pressure on foreign exchange rates, the commission said.
It has cited last year’s experience in the report. When the exchange rate increased sharply in the wake of US’s Fed interest rate rise, the central bank had to sell the US dollar and increase the interest rate of treasury bills to reduce the pressure on the foreign exchange rates. It caused a sharp rise in inter-bank rate.
Therefore, according to the commission, maintaining low interest rates in the inter-bank market triggers instability, and it will be a barrier to the commercial banks unwilling to lower interest rates (mainly long-term rates).
Besides this, excess liquidity in some banks does not easily flow into other banks that are short on liquidity and do not have good asset quality. According to the committee, it is difficult for the latter to borrow from the first, unless they have secured assets such as G-bonds.
Therefore, the latter must increase interest rates to higher levels than the average rates to be able to attract depositors.
This year, the central bank has targeted keeping the interest rate stable, but some commercial banks inched up deposit interest rates in the first month of the year.
However, the central bank said the rise was only in some small-sized banks and did not reflect the common trend of the entire banking system. It affirmed that interest rates were stable in the first month of 2017 and would remain steady for the entire year.
Currently, deposit interest rates average at 0.8% to 1% per year for below one-month terms, 4.5% to 5.4% per year for one-month term to six-month terms, 5.4% to 6.5% per year for six-month terms to 12-month terms and 6.4% to 7.2% per year for terms exceeding 12 months.
Online retail uploads into rapidly expanding Vietnamese market
E-commerce is forecast to hit US$10 billion by 2020, accounting for 5% of the country’s retail market.
Vietnam’s e-commerce market climbed to about US$4 billion in 2016 as one of the fastest-growing markets worldwide.
Revenue from online retail in Vietnam is forecast to hit US$10 billion by 2020, accounting for 5% of the country’s retail market.
“The growth rate of Vietnam’s e-commerce market is estimated at about 35%, which is 2.5 times higher than Japan,” said industry expert Duc Tam at the recently-held Vietnam Online Business Forum 2017.
Online sales in Vietnam have expanded rapidly in recent years, currently accounting for 3.39% of the country’s retail market. The total retail market grew 10.2% last year to US$118 billion, mainly fuelled by a growing middle-class with expanding disposable incomes and an increasing number of internet users.
The World Bank forecasts that Vietnam’s US$200 billion economy is likely to grow to a trillion dollars by 2035. More than half of its population, compared with only 11% today, is expected to join the ranks of the global middle class with consumption of US$15 a day or more.
According to one estimate, about 30% of the population will be buying goods and services over the internet in 2020, with each shopper spending an average of US$350 per year.
Just three years ago Vietnam was ranked the smallest e-commerce market in Southeast Asia in terms of sales. Now its online retail is gaining momentum with more than half of the country's 92 million people increasingly turning to online shopping.
According to Internet World Stats, Vietnam is currently ranked 18th in the world in terms of the number of internet users, with mobile subscription rates as high as 4 out of 10 people.
HCM City looks to improve tax collection
HCM City has asked the municipal tax authority to enhance preventative measures against tax fraud and transfer pricing to ensure tax revenue and improve business confidence.
Deputy Chairman of HCM City People’s Committee, Tran Vinh Tuyen, said at a conference Sunday that the Government is urgently working to develop a scheme to prevent losses from tax collection and transfer pricing.
“The benefits from the scheme will not only include increasing tax revenue but also enhancing business confidence,” Tuyen said.
Tuyen stressed the importance of creating favourable conditions for firms to boost their business in order to fulfill this year’s tax collection goal.
Tran Ngoc Tam, Director of the city’s Department of Taxation, explained that transfer pricing is a scheme that firms use to avoid paying taxes due to differences in tax rates among countries. “The corporate income tax of Viet Nam should be reviewed to narrow the gaps with other countries,” Tam said.
Tam said that the taxation framework, especially on the operation of multinational companies with transactions between related entities, should be improved to prevent transfer pricing.
He said the database on average industry benchmarks should be developed soon, calling such systems useful in inspecting firms with related–party transactions.
According to Nguyen Hoang Minh, Deputy Director of the southern branch of the State Bank of Viet Nam, transfer pricing requires close coordination between relevant organisations and agencies to ensure efficiency.
The central bank is striving to reduce the proportion of cash transactions, from 19-20 per cent to 10 per cent currently, which is a solution to prevent tax losses.
Deputy Minister of Finance Vu Thi Mai said that the municipal tax watchdog must hasten inspections, with a focus on sectors and firms in which it is easy to commit tax evasion, adding that punishments must be strong enough to deter violations.
“Tax reform, especially the application of information and technology, must be hastened,” Mai said.
Mai asked the municipal taxation department to improve tax collection among e-commerce businesses booming in the southern city.
Pham Thanh Kien, Director of the HCM City Department of Industry and Trade, said that there are around 80,000 e-commerce websites in the city, half of which operate regularly. It remains difficult to collect taxes on these businesses.
Kien said that nearly no taxes are collected on sales activities via Facebook, adding that local authorities should work with the social network to form mechanisms to control revenues.
HCM City planned to collect VND238.9 trillion (US$10.4 billion) for the State budget in 2017.
Last year, the city’s tax revenue reached nearly VND203.3 trillion, increasing by 10.5 per cent over 2015.
Vietnamese entrepreneur to attend emerging leaders programme
Young Vietnamese businessperson Dao Lan Huong has been selected as one of 15 entrepreneurs to take part in the Australia-ASEAN Emerging Leaders Programme (A2ELP).
The event is scheduled to take place in Melbourne and Sydney in March this year.
The list of businesspeople was announced by Australian Foreign Minister Julia Bishop on Friday.
Minister Bishop said the selected entrepreneurs have made contributions to eradicating poverty, improving healthcare and promoting education, technological development and environmental protection.
A2ELP is hoped to promote partnerships among enterprises and organisations and further deepen relations between Australia and countries in Southeast Asia, she said.
Hương is executive director of Weshop Global, which specialises in e-commerce in the United States, Viet Nam, Malaysia and the Philippines, as well as Indonesia and Thailand.
While she was a student in 2004, Huong joined PeaceSoft/Nexttech Group – a technological startup enterprise – as its co-founder. She worked to build strategies for the firm, developing it into a strong 400-employee group from only five people. Huong held many important positions in PeaceSoft/Nexttech, and also invested in the Vietnam Investment Club to help young entrepreneurs in startup activities.
A2ELP is designed to create meaningful people-to-people links among entrepreneurs across Asia. It will bring together 10 social entrepreneurs from South-East Asia and five from Australia to take part in a series of innovative learning and development opportunities in 2017.
It will also offer participants a good opportunity to learn from the experiences of Australia’s leading experts in identifying opportunities and dealing with implicit negative impact on their businesses.
FPT Securities to remove foreign-ownership limitations
FPT Securities Joint Stock Company (FPTS) has obtained approval from the State Securities Commission to lift its foreign ownership limit.
FPTS is a member of the information-technology-telecommunication group FPT Corporation, the largest ICT conglomerate in Viet Nam. FPT Corporation holds 20 per cent of the capital in FPTS.
At the moment, Tokyo-based SBI Financial Services Co Ltd is the only foreign investors in FPTS, owning 20 per cent of the brokerage firm’s capital.
FPTS’ 90.3 million shares were traded on the HCM Stock Exchange on January 13 with the code FTS at the starting price of VND18,000 (80 US cents), but the price has fallen 28 per cent this year.
IB Securities to issue $26.67m of bonds
The Ha Noi-based IB Securities JSC plans to issue VND600 billion (US$26.67 million) worth of bonds in 2017.
The bond notes will be unconvertible and non-guaranteed. The bonds will mature in one to three years, with the face value of each bond note VND1 billion.
The annual yield rate is less than 12 per cent for the first year after issuance. The yield rate will be adjusted every six months based on the average deposit rate of the four state-owned commercial banks plus a margin of 4 per cent on either side.
The bond will be issued on several occasions with the first issuance expected in the first quarter of 2017. The next issuances will be based on the result of the first one and the company’s demand for capital.
IB Securities in 2016 earned revenue of VND182.16 billion and post-tax profits of VND54.8 billion, a increase of 19.3 per cent and a decrease of 17 per cent from 2015’s figures.
Vietnamese businesses grapple with Brexit
Back in June of 2016, Britain sent shockwaves throughout Vietnam and around the globe by voting to leave the EU.
Now, eight months after the vote to withdraw, Vietnamese companies with exposure to the country, primarily those in the clothing, textiles and agriculture segments, are bracing for the impact of the long-feared ‘hard Brexit’.
UK Prime Minister Theresa May said in a speech on January 17 that Britain will not attempt to remain in the EU single market but will start negotiations with the EU in March over its exit, and will be out in two years.
The impact of the Brexit vote has been felt most sharply on Vietnam in terms of lowering the country’s exports.
The pound has plummeted, at one point reaching 31-year lows, which has had the effect of making imports from Vietnam more expensive for British consumers and is causing a slowdown in imports of a wide range of goods.
Visa UK and Ireland managing director Kevin Jenkins told reporters recently that clothing and household goods retailers in Britain experienced a particularly difficult January.
Jenkins noted that sales in Britain for the first month of 2017 saw the biggest drop in nearly five years.
Le Tien Truong, general director of the Vietnam National Textile and Garment Group noted Brexit is having a significant impact on clothing exports and that orders dropped sharply in January.
It’s difficult to quantify the impact but he fully expects sales to Britain to drop to record lows for 2017.
The UK has been the largest export market for clothing and textile exports over the past few years, accounting for one-fifth of the total consignments to the EU, said Truong.
Traders at one of the largest wholesale markets in Britain have said the prices for imports of fish are up by as much as 40% owing to the drop in the value of the pound, which has led to sluggish imports.
It means fresh fruit, vegetables, fish, meat and poultry are all much more expensive for traders to buy.
One trader in Britain reported that all our prices, for anything from outside of this country, have gone up. Our average profits have fallen by up to 15%. We cannot pass that on.
The cost of fish, meat and poultry in Britain has soared by up to 44% since the Brexit vote, according to the British newspaper the Mirror.
Matt Southam, of the UK Agriculture and Horticulture Development Board, warned of further currency- driven increases in meat prices.
Retailers have held off until Christmas was out of the way— but now we are seeing the first of maybe two or three price hikes of fish, meat and poultry price increases expected for 2017, he added.
In the short-term at least, it looks like Vietnamese exporters are in for a wild ride full of twists and turns over the next couple of years as Britain makes its hard Brexit from the EU.
Vietnam joins ASEAN Village at Multicultural Festival in Australia
The Vietnamese Embassy in Australia participated in the ASEAN Village at the 2017 Multicultural Festival which took place from February 17-19 in the capital of Canberra.
This was the first time all 10 ASEAN countries gathered in an area at the festival, creating a favourable environment in which for visitors to learn about their land, people, culture and traditional cuisine.
At the event, Vietnam, along with other regional countries, displayed cultural publications and souvenirs as well as traditional dishes and specialities. In addition, visitors to the festival had a chance to enjoy traditional arts performances of ASEAN countries.
The formation of the ASEAN Village at this year’s festival aimed to introduce the diverse culture of the Southeast Asian region to foreign friends, particularly Australian people, as well as to demonstrate the solidarity of ASEAN countries, said Vietnamese Ambassador to Canberra Luong Thanh Nghi.
With over 300,000 Vietnamese living, working and studying in Australia, Vietnam has significantly contributed to the cultural diversity of the nation, added Ambassador Nghi.
By participating in the festival, Vietnam can effectively introduce the beauty of its land, people and culture, contributing to tightening the friendship and co-operation between the two countries, particularly mutual understanding between the two peoples.
Over the past 42 years, the bilateral co-operation between ASEAN and Australia has developed well, particularly in the economy.
Visiting ASEAN booths, Rachel Stephen-Smith, Minister for Multicultural Affairs of the Canberra Capital Territory (ACT) government, said that the ASEAN Village was one of interesting areas at the festival and the presence of ASEAN countries indispensable to this multicultural event in Canberra over the past two decades.
The 2017 Multicultural Festival featured over 400 pavilions belonging to organisations, embassies and communities from various countries around the world, stretching nearly 10km along the streets in the centre of the capital.
Last year’s event attracted more than 280,000 visitors.
Vietjet to build US$140-million aviation technology center in HCMC
Vietnam’s low-cost air carrier Vietjet on Saturday received an investment certificate from the management board of Saigon Hi-Tech Park for a US$140-million project to develop the Center of Aviation Technology.
The center would be located on an area of 5.54 hectares at Research & Development Training and Incubation Zone (Science Zone) in the park.
Vietjet has set a target of developing the facility as a professional aviation research and training center meeting international standards.
The project is expected to get off the ground next month. The first phase of the project will be a Full Flight Simulator Center for pilot training, run in partnership with aircraft manufacturer Airbus. It is scheduled to go into operation after 12 months of construction.
Earlier, Vietjet also clinched a deal with Airbus to establish a flight and maintenance training center in Vietnam to train pilots, engineers, mechanics, flight dispatchers and flight trainers in February 2016.
The opening of the center of aviation technology is aimed to train pilots and engineers at home to save the cost of sending them abroad for training.
On the same day, Vietjet also got a membership certificate from the International Air Transportation Association (IATA).
Vietjet last year posted revenue of some VND27.5 trillion (nearly US$1.21 billion), and profit of VND2.3 trillion. In addition, the budget carrier reported a load factor of 88.9%, with more than 14 million passengers transported in 2016.
Thai Nguyen bolsters cooperation with Swedish firms
The northern province of Thai Nguyen hopes to cooperate with businesses from Ostergotland province of Sweden in various fields, said Vice Chairman of the provincial People’s Committee Nhu Van Tam.
The official made the statement during a conference to promote trade and investment cooperation between local businesses and their peers from Ostergotland on February 20.
At the conference, Tam introduced the strengths of Thai Nguyen, higlighting the fields that the province wants investment in including industry, import-export, tourism finance, services, education, health, environment protection and industrial waste treatment.
Emphasising the sound relations between the two countries, Elisabeth Nilsson, Governor of Ostergotland affirmed that bilateral trade ties are also growing. The prospects of collaboration between the two countries and two localities are remarkable, especially in Sweden’s strong suits like environment, climate change, green technology, urban transport and education, she added.
The Governor noted that businesses of Ostergotland wish to invest in Thai Nguyen province in renewable energy, environmental protection and waste treatment.
At the conference, a memorandum of understanding on clean technology between the Thai Nguyen Business Association and Cleantech Ostergotland, a Swesdish non-profit organisation, was inked.
Champasak gains insight into HCM City’s agricultural development
A delegation of the Lao province of Champasak visited the Biotechnology Centre and the Agricultural Hi-tech Park of Ho Chi Minh City on February 20.
The delegation was led by Secretary of the provincial Committee of the Lao People’s Revolutionary Party and Governor of Champasak Bounthong Divixay.
Briefing the guests about the Biotechnology Centre, Director Duong Hoa Xo said the centre’s studies and application of biotechnology have reaped encouraging outcomes such as successfully cross-breeding orchid species, creating new roots for Ngoc Linh ginseng by gene transfer, and inventing shrimp disease test kits.
Champasak boasts favourable natural conditions for agriculture, he said, suggesting his centre and the Lao province cooperate in training manpower, transferring plant tissue culture technology and farming techniques, applying biological products, exchanging medicinal plant genes, and developing cattle.
The Lao side also toured the Agricultural Hi-tech Park to better understand the cultivation of orchids, honeydew melon, and mushroom by using technologies.
Bounthong Divixay said his delegation is very interested in hi-tech agriculture and wants to learn from HCM City’s experience in this field.
On the occasion, the guests also paid tribute to heroic martyrs at Ben Duoc Temple, the Saigon – Cho Lon – Gia Dinh Revolution Memorial Complex, and the Cu Chi tunnels.