BUSINESS IN BRIEF 27/5
HCM City works to promote innovative start-ups
Ho Chi Minh City has created many programmes to support start-up activities, and has plans to expand its support to individuals and groups with potential, the Saigon Hi-tech Park Incubation Centre (SHTP-IC) has said.
Since 2014, the centre has incubated 38 projects, 22 of which have been commercialised, according to SHTP-IC. Last year total revenue from incubated projects reached 41.4 billion VND (1.8 million USD), the centre said.
The centre also helps businesses and projects register for intellectual property rights, conduct market research, improve model products to take to trade fairs, and connect entrepreneurs with investors, capital plans and venture capital funds.
Le Thanh Nguyen, head of SHTP-IC, said this was a positive sign for a public incubation model for science-technology businesses.
Last year, the city’s Department of Science and Technology kicked off a pilot programme for the incubation of science-technology businesses at HCM City-based Nong Lam University, HCM City University of Technology and Saigon Hi-tech Park.
The department also provided consultation and added technological services for the businesses.
In addition, a number of universities in the city have also established start-up support centres for their own students.
Other private incubation centres have also been built such as Software Business Incubator (SBI) and FPT Ventures.
Thanks to the diversity of incubation centres, start-ups can now easily find support, investment and partners, according to the centre.
Most of Vietnam’s start-ups, however, are small in scale and yet to enter the capital-calling period, according to the Department of Science and Technology.
They need support from the government and participation in public-private cooperation models, as well as contributions from part of the innovative start-up ecosystem.
In addition, they are not lucrative enough to attract investors because of specific features and policies of public incubation centres.
Tran Van Tung, Deputy Minister of the Ministry of Science and Technology, said the biggest weakness were start-up skills. A successful start-up business must bring its products to the market, he said.
“In addition, mobilising capital from investors is very important. If start-ups cannot attract capital, they will not have enough resources to grow,” he said.
Experts said the city would focus on encouraging innovative start-up activities among young people and high school students due to their great potential.
Nguyen Viet Dung, Director of the Department of Science and Technology, said it was necessary to help individuals and businesses conduct research and reform their operations.
Speaking at a recent meeting held in Hanoi, Vu Tien Loc, Chairman of the Vietnam Chamber of Commerce and Industry (VCCI), said more than 50 investment funds in diverse investment forms existed, but they were scattered and on a small scale.
To foster start-up activities, the city has introduced many policies, including a programme to help small- and medium-sized businesses to innovate and increase global competitiveness in the 2016-2020 period.
HCM City has set a goal to support 2,000 innovative businesses until 2020 by creating an innovative working environment for start-ups via public-private cooperation.
Vietnam currently has 1,800 start-ups, of which 834 operate in HCM City.
Despite strong growth, investment in innovative start-ups in Vietnam remains relatively modest, compared to the region and the world.
Belgian potato exporters seek opportunities in Vietnam
Belgium’s Flanders Agricultural Marketing Board held a press conference in Hanoi on May 14 to announce a plan to develop the Belgian potato market share in Vietnam.
Attending the event were five largest Belgian businesses major in exporting potato products and specialties to 100 different markets globally, including Agristo, Bart’s Potato Company, Clarebout Potatoes, Ecofrost and Mydibel, and the Belgian fries group
The event was part of activities on the occasion of the Minister-President of Flanders’s visit to Vietnam from May 13-17 to seek business opportunities.
Romain Cools, General Secretary of the Belgian potato trade and processing industry association (Belgapom), expressed his delight at introducing Belgian potatoes in Vietnam following debuts in Indonesia, Malaysia, Thailand and Singapore.
He hailed Southeast Asia as one of the fastest-growing regions on the back of middle class growth, urbanisation and young population, adding that Belgium’s frozen fries are ready to meet demand.
Belgium is the world’s largest frozen fries exporter, with over 90 percent being shipped abroad.
In 2016, Belgium’s fries export grew by 14.3 percent to 1.68 million tonnes.
Vietnam Medi Pharm Expo to return to HCM City in August
About 350 domestic and foreign exhibitors will gather at the Saigon Exhibition and Conference Centre (SECC) in Ho Chi Minh City for the 18th Vietnam International Hospital, Medical and Pharmaceutical Exhibition (Vietnam Medi Pharm Expo 2018) from August 2-4.
The number of foreign exhibitors increased annually over the past 3 years, particularly those from Germany, Japan, the Republic of Korea, Singapore, India, and Malaysia, said Nguyen Khac Luan, general director of Vinexad, organiser of the event.
Products on display at the expo will be medical equipment and equipment in the pharmaceutical and beauty industries, natural medicines and supplementary foods.
Along with trading activities among the enterprises, the three-day exhibition will also feature seminars “Introduction to Vietnam’s Pharmacy and Medicine Market” and “Local Medical Pharmacy Market and Policies”.
Besides, there will be a fact-finding tour of Cho Ray Hospital, a large hospital in HCM City, so that they can get an overview of the medical examination and treatment demands from local residents.
Vietnam Medi-Pharm Expo is an annual event taking place in Ho Chi Minh City in August and Hanoi in December.
The expo is designed to promote trade activities in pharmacy and medical equipment. The exhibition is a platform for advanced medical technologies and equipment companies from around the world to access local pharmacy companies, in which Vietnam has advantage to initiate exchanges.
Last year, the Vietnam Medi Pharm Expo drew the participation of 250 businesses showcasing their products at 350 booths. Those included giant corporations and leading global companies from 22 countries and territories such as the US, Germany, Ukraine, Belarus, Russia, Uzbekistan, Iran, Turkey, the Republic of Korea, Japan, Malaysia and Thailand.
The 2017 event attracted about 14,200 visitors.
Bac Lieu province works to lure more tourists
Boasting various tourist attractions like Quan Am Nam Hai festival, Xiem Can pagoda and bird sanctuary, among others, the Mekong Delta province of Bac Lieu will splash out 1.35 trillion VND (59.4 million USD) on various solutions to local tourism development until 2020 with a vision until 2030.
Improving tourism services, bettering transport roads and restoring cultural and historic sites are put at the first line of the solutions. Besides, the locality also pays due attention to setting up mechanisms and policies to call for investment in tourism projects in the province.
According to Director of the provincial Department of Culture, Sports and Tourism Cao Xuan Thu Van, the province is currently home to 50 accommodation facilities with nearly 1,200 rooms. The Mekong Delta Tourism Association has listed Bac Lieu province among localities having outstanding tourism products in the southern key economic region.
The regional “One destination-Four localities Plus” tourism product comprises five provinces of Can Tho, An Giang, Kien Giang, Ca Mau and Bac Lieu, he added.
From the outset of the year, the province raked in over 110 billion VND (4.84 million USD) from welcoming 120,000 tourist arrivals, including 3,200 foreigners.
This year, the local tourism sector strives to earn 1.28 trillion VND (56.32 million USD) in tourism revenue, up 6.7 percent from 2017. It targets over 1.6 million tourists, a year-on-year surge of 9.3 percent, with 41,000 foreigners.
Exports of tra fish earns 438 million USD in three months
Export turnover of tra fish reached 438.2 million USD in the first quarter of 2018, an increase of 18 percent year-on-year, according to the Association of Seafood Exporters and Producers (VASEP).
Some markets recorded strong growth such as China’s Hong Kong (45 percent), the United States (22.7 percent), and ASEAN with 56.5 percent.
By the end of March, the export value of tra fish to China’s Hong Kong hit 101.1 million USD, accounting for 23 percent of the first-quarter figure, up 45 percent over the same period of 2017. Hong Kong is also the largest export market of Vietnam.
VASEP has forecasted that exports of tra fish to this market will continue to grow due to its high demand.
There are some concerns about exporting products and goods to China due to uncertainties in the market’s demand and payment method. Prices also matter as the prices through the official channel are often 1 USD per kg higher than the prices offered by cross-border channels. VASEP has requested the Ministry of Agriculture and Rural Department to quickly inspect tra fish processing units to ensure product quality.
At the same time, it urged the ministry to introduce more marketing and promotion programs in order to popularize tra fish in China. Exports of tra fish to ASEAN market also increased strongly in the first quarter of the year, reaching 46.7 million USD, up 56.5 percent over the same period last year.
Vietnam’s three biggest tra fish importers in the bloc were Thailand, Singapore, and the Philippines, accounting for 97.9 percent, 26.8 percent and 32.7 percent, respectively. It is forecasted that in 2018, ASEAN will continue to be the third largest import market for Vietnamese tra fish (after China and the US).
By the end of March, tra fish export value to the US reached nearly 75 million USD, accounting for 17 percent, and up 22.7 percent year on year. Exports of the product to the EU continued to decline by 17.7 percent to 41 million USD.
VASEP said that in the coming time, exports of tra fish to the US would continue to face difficulties due to the high anti-dumping tax rate, so ASEAN would be likely to overtake the US to become Vietnam’s second largest tra fish buyer.
VCCI’s international cooperation helps improve domestic business environment
The Vietnam Chamber of Commerce and Industry (VCCI) has made great efforts in cooperating with international organisations and foreign embassies in Vietnam to promote partnership between Vietnamese and foreign partners.
The US Agency for International Development (USAID) has been working with the VCCI in many cooperation projects, with the most prominent joint effort being the making of the annual provincial competitiveness index (PCI) rankings.
The PCI has significant influence on the improvement of Vietnam’s business environment, especially from 2014 when the Resolution 19/NQ-CP on major solutions to improve the business environment and enhancing national competitiveness was issued.
On the foundation of the PCI, localities nationwide have designed detailed plans of actions and specific ideas to further better the local business environment.
Meanwhile, according to Karashima Hiroshi, President of the Japan Business Association in Vietnam (JBAV), the VCCI has become a bridge linking the business communities of Vietnam and Japan.
With the support from VCCI, the has received operation permit in Vietnam and exerted efforts to boost trade and economic cooperation between the two countries, he said.
In 2017, the JBAV was the co-chair of the Vietnam Business Forum, and worked with the VCCI to successfully organize the event, he added.
Currently, many Japanese firms have showed their interest to invest in Vietnam. The JBAV leader held that conferences held by the VCCI are useful for Japanese enterprises to learn Vietnamese trade information.
The JBAV will continue to share information of VCCI events to member businesses, he stated.
At the same time, the VCCI has maintained effective cooperation with the UN Development Programme and other UN organisations to support the sustainable development of businesses.
Caitlin Wiesen, UNDP Country Director in Vietnam said that the UNDP will continue the close coordination with the VCCI in supporting private firms, which is also one of key focuses of the UNDP currently.
She held that sustainable development goals cannot be completed without the engagement of the private sectors as well as the support of an organization representing the business community.
The VCCI spent nearly three years to work with social, economic and environment experts as well as international partners to compile a sustainability index for enterprises, which will be applied soon.
Lach Huyen int’l port opens in Hai Phong
The Lach Huyen international port in the northern port city of Hai Phong, which uses Japanese ODA funding, opened on May 13, according to the Japan International Cooperation Agency (JICA).
The project is part of the International Port Infrastructure Construction Project through JICA.
In addition, the Tan Vu intersection (of the Ha Noi-Hai Phong expressway, Tan Vu-Lach Huyen road and ring road of Hai Phong City) is under construction and is expected to be completed within this year.
Under the project, the Dinh Vu Bridge which is 5.44 km long, is the longest bridge crossing the sea in Viet Nam. It also opened to traffic last September.
The International Port Infrastructure Construction Project aims to build international deep seaports and other related infrastructure in Lach Huyen District in the eastern part of Hai Phong City.
The project will help meet the growing demand for cargo handling in Viet Nam as well as enhance international competitiveness of the northern region.
This is the first ODA project implemented in the form of Public Private Partnership (PPP) between Viet Nam and Japan.
JICA signed an ODA loan agreement in 2011 with a loan amount of 114.12 billion yen (US$1 billion) of which the port component accounts for 65.252 billion yen and the bridge and road component 48.885 billion yen.
Viet Nam and Japan have established long-term, reliable strategic partnerships in many fields. JICA has committed to continue to finance important transport infrastructure projects in Viet Nam.
SBV allows Bao Viet Bank to open branches
State Bank of Viet Nam (SBV) last week approved Bao Viet Commercial Joint Stock Bank to open five branches and two transaction offices.
The five branches are located in the northen province of Lao Cai’s Lao Cai City, central province of Thanh Hoa’s Bim Son Town, Central Highlands province of Gia Lai’s Pleiku City, southern province of Dong Nai’s Bien Hoa City, and HCM City’s Cu Chi District.
The two transaction offices are to be opened in Nha Trang City of the central coastal province of Khanh Hoa and in Song Than Industrial Zone in southern Binh Duong Province’s Di An District.
These branches and transaction offices must be operational within 12 months of the date of signing the document announcing the approval, failing which the approval will stand null and void.
Techcombank raises $362m from second-phase treasury stock sale
Techcombank has completed the sale of 64.4 million treasury stocks, collecting more than VND8.24 trillion (US$361.5 million), the bank announced.
The shares, equivalent to 5.85 per cent of the bank’s capital, were sold between April 27 and May 7 at an average price of VND128,000 ($5.61) per share through transactions on the Viet Nam Securities Depository Centre (VSDC).
In the first phase (March 21 to April 19), Techcombank also offloaded 93.2 million treasury stocks, equalling 9.39 per cent of its capital, for VND8.48 trillion, or at VND91,000 per share.
After the two offerings, Techcombank has raised more than VND16.7 trillion.
In the third quarter of last year, Techcombank paid more than VND4.04 trillion to buy back nearly 172.4 million stocks (treasury stocks), equivalent to just VND23,459 per share.
The bank’s share value has risen by more than five times since then.
In April, Techcombank also sold 164 million shares worth VND21 trillion to foreign investors at the price of VND128,000 per share, valuing the bank at $6.5 billion.
It is expected to list itself on the HCM Stock Exchange on June under the code TCB.
VDSC announced the deadline for closing the list of shareholders registering ownership on May 11.
Founded in 1993 with charter capital of just VND20 billion, Techcombank has emerged to be Viet Nam’s largest private sector bank with charter capital of nearly VND11.66 trillion and total assets of VND269.4 trillion by the end of last year.
The bank posted a pre-tax profit of more than VND8 trillion in 2017 and has targeted a pre-tax profit of VND10.8 trillion this year.
Techcombank’s shares are trading on the over-the-counter (OTC) market at around VND115,000 per share.
SeABank appoints new CEO
Southeast Asia Joint Stock Commercial Bank (SeABank) has appointed Le Thu Thuy as its general director following the approval of State Bank of Viet Nam.
This marks a strategic change at SeABank to strengthen its board.
Born in 1983, Thuy has worked at SeABank for more than 10 years and has many years of experience with international financial and banking organisations.
She held different positions at the bank before being appointed vice chairman of the management board, wherein she was responsible for building a modern, multi-functional retail bank and directly connecting and developing strategic co-operation with leading companies in the country.
Previously, SeABank has had many changes – from strategy and business model to organisational structure – to achieve the goal of becoming a multi-functional, modern financial group and leading retail bank in Viet Nam.
Last year, the bank posted a pre-tax profit of VND381 billion (US$16.7 million), an increase of 161 per cent over 2016 and surpassing 227 per cent of the set target. The bank’s total assets amounted to more than VND125 trillion; total outstanding loans reached VND70.5 trillion; and the bad debt ratio was 0.91 per cent.
The company said around 120 different products, including the new Mi MIX 2S and Redmi Note 5 are on display there.
Other products include scooters, robot vacuums, fitness accessories, air purifiers, desk lamps, and power banks.
Xiaomi, which first came to the country a little over a year ago, already has six other Mi Stores, five in HCM City and one in Thanh Hoa.
“It is awesome to be opening our first authorized Mi Store in Ha Noi,” Xiaomi Vietnam country manager Jack Yung said.
“Ever since our first store opening at the beginning of the year, people have been asking us ‘when will you open in Ha Noi?’”
Mi Store Hanoi is located at Level B1 in Times City, 458 Minh Khai Street.
Nghi Son 2 thermal plant finally starts construction in second quarter
After being delayed for numerous times, the construction of Nghi Son 2 thermal power plant is expected to be kicked off by the end of this quarter. The progress is thanks to the investor mobilising the majority of the required capital for the project.
Most recently, Japan Bank for International Cooperation (JBIC) released the information that it signed a $560-million loan agreement to finance the project with Nghi Son 2 Power Limited Liability Company (NS2PC), the investor of Nghi Son 2 thermal power plant, which is a consortium of Japanese company Marubeni Corporation and Korea Electric Power Corporation (KEPCO).
The purpose of the loan is to support an overseas infrastructure project in which the Japanese company participates as an investor, as well as to operate and maintain a power plant over a long period of time, using advanced Japanese technologies. This loan thereby contributes to maintaining and strengthening the international competitiveness of Japanese industries.
Along with the loan from JBIC, NS2PC also called loans from the Export-Import Bank of Korea (KEXIM), Sumitomo Mitsui Banking Corporation, MUFG Bank, Ltd., Mizuho Bank, Ltd., Shinsei Bank, Ltd., Oversea-Chinese Banking Corporation, Ltd., DBS Bank, Ltd., and Malayan Banking Berhad.
The total co-financing amount is valued at $1.87 trillion. JBIC and KEXIM provide political risk guarantee for the portion of the loan financed by private financial institutions.
The project will be developed under the build-operate-transfer (BOT) format and have the installed capacity of 1,200MW, produced by two units of 600MW each. The electricity generated from this plant will be sold to Electricity of Vietnam (EVN) for 25 years.
Earlier in June 2017, the Ministry of Planning and Investment granted the investment certificate for the investor. The project's capital was estimated at $2.8 billion. According to the initial plan, the construction of the plant should have started by the end of last year, but failed. The reason for the delay may be the difficulties in arranging capital on the side of the investors.
The country now has 18 BOT thermal power projects. Some of them have been put into operation, including Phu My 1, 2, and 3 thermal power plants.
According to the latest information, the $1.75-billion Vinh Tan 1 thermal power project, the largest Chinese-invested project in Vietnam, will come into commercial operation ahead of schedule after concerns of potential power shortages in the southern provinces in the time to come.
Notably, its first unit will come into commercial operation in July 2018, five months earlier than initially scheduled. Previously, on April 18, 2018, the first unit of Vinh Tan 1 was successfully connected to the national grid and met all standard requirements during the testing as well as operation.
Vinh Tan 1 is expected to provide more than 7.2 billion KWh per year, increasing the southern region's electricity supply and helping reduce the region's dependence on hydropower—especially during the dry season or droughts.
Electronics purchases still weak despite big promotion in football season
Though numerous electronics stores in Ho Chi Minh City catch FIFA World Cup fever to push sales of television sets this football season that is barely more than one month away, consumers show their indifference to the program.
Sales are declining in electronics stores after Tet holiday (the Lunar New Year); subsequently, FIFA World Cup is believed to be a chance to kick-start the sales. For instance, staffs of Xanh ( Green) electronics store in Go Vap District gave warm welcome to all visitors to the store.
A salesman enthusiastically introduced television kinds to customers. A customer will receive discount of VND10 million ($439) if he buys a 55-inch LG television which is worth VND40 million.
The salesman said that anyone who buys 49-55 inch televisions will enjoy big discount because it is in the football season and these televisions were produced last year.
Another television brands offer discount from hundred thousands Vietnam dong to millions Vietnam dong with gifts such as vouchers or tourist tickets. Especially they can buy television or electronic appliances on instalment plan with interest rate of zero percent through consumer finance companies such as FE Credit or HD Saison.
Maybe, Nguyen Kim electronics retailer is the first one that launched sales promotion program to spur purchase. In addition to discounts with gifts , customers can join a lucky draw with the prizes such as : a tour to Russia to watch World Cup, Hitachi Inverter 584 refrigerator and free Budweiser beer in one year when you buy a product worth VND300,000 up.
Very a few visitors watched televisions at Thien Hoa Electronics store’s display section. It seemed that they just wanted to see rather buy. Mr. Hung, a visitor at the store, said it is wasteful to buy a television because there are several television at home but it is a good chance for those who want to buy bigger television. He considered World Cup not as important as it is believed.
Competition from CPTPP not big cause for concern - expert
An expert in free trade at a workshop on the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) held in An Giang Province on May 11 told local enterprises that competition ushered in by market openness is not a big cause for concern.
Tran Thi Dep, chairwoman of the An Giang Business Association, asked if local enterprises would be adversely affected by CPTPP. She voiced concern at the workshop “Assessing impacts of CPTPP and new free trade agreements (FTAs) on Vietnam – opportunities and challenges for enterprises in An Giang Province.”
More competition is by all means certain, as imported products can flow in due to lower import tariffs, said Phung Thi Lan Phuong, head of the FTA division at the World Trade Organization (WTO) and Integration Center under the Vietnam Chamber of Commerce and Industry (VCCI). However, such pressure would also bring benefits, she said.
Phuong said when Vietnam allows products made in other countries to enter the domestic market, local firms would face tougher competition from such goods. However, local enterprises have adapted themselves to such competition, so it is not a big headache for them.
Vietnam has allowed goods from neighboring markets like China and ASEAN under free trade agreements, and such goods have been competing strongly with domestic products as transport costs are low, she said.
Therefore, there is no need to worry about remote markets with expensive products and high transport costs like CPTPP economies, Phuong said.
She asserted that competition exerted by commodities from CPTPP economies would not be as strong as that from ASEAN and China commodities.
In addition, competition will be motivation for domestic enterprises to enhance their capacity.
An Giang vice chairman Le Van Nung said the development of enterprises, especially small and medium ones, is extremely important to the province as they offer jobs for local laborers and pay taxes to fuel the province’s growth. Therefore, the provincial government will enhance its support for enterprises.
It is a must to provide enterprises and local officials with integration information to promote the growth of enterprises, contributing to the province’s socio-economic development, he said, appreciating the significance of the workshop.
After the U.S. ditched the Trans-Pacific Partnership (TPP) trade agreement in January last year, Vietnam and 10 other members renamed TPP as CPTPP.
In March, CPTPP was inked in Chile. It will come into force after it is ratified by at least six members.
Private firm to develop bus system at Saigon Hi-Tech Park
Saigon Smile Co Ltd will invest VND100 billion (US$4.4 million) to develop a system of clean-energy and electric buses at the Saigon Hi-Tech Park to shuttle employees inside the sprawling park in HCMC’s District 9.
The SHTP Authority on May 11 awarded an investment certificate for Saigon Smile Co Ltd to develop and operate the bus system.
Truong Quang Do, representative of the investor, said the company will build bus stations and then operate 10 electric buses on the two routes of the park on a trial basis.
The project which is scheduled for completion by 2021 will include 30 electric buses and 14 clean-energy buses, together with stations and stops.
Do added Intel, FPT, Nidec, Sanofi and Samsung which set up shop at SHTP have already arranged buses to transport their employees. Therefore, Saigon Smile will make deals to transport their staff on fixed routes.
As Fulbright University Vietnam, Nguyen Tat Thanh University, and Hutech University have their facilities completed there, the park will see an increasing number of students. They will be potential bus passengers, said the Saigon Smile representative.
The city’s Metro Line No.1 will be passing through the main entrance of the SHTP, so it is also a good chance for the investor’s bus system to transport metro passengers into the park.
As bus routes in HCMC are partially subsidized by the city government, head of the SHTP Authority Le Hoai Quoc expressed concern over the effectiveness of the new bus project that will not get similar incentives.
However, Do of Saigon Smile told the Daily that the company has thoroughly studied its project which is forecast to recover its investment within 10 years of operation.
Enterprises encouraged to join city’s outstanding industrial products program
The HCMC Department of Industry and Trade has invited enterprises to apply for a program to select outstanding industrial and supporting products in 2018 to honor manufacturers with products making contribution to the city’s development.
The program functions as a bridge linking business activities together and promoting corporate development through networking among industries to help boost competitiveness and manufacturing capacity in the context of internationally economic integration.
Products eligible for the program should be those in mechanical engineering, rubber and plastics, food processing, electronics, apparel, footwear and leather. Companies from such sectors in the city and having manufacturing operations related to industrial and supporting products are qualified for participating in the program.
Earlier, in the same program held two years ago, 38 products of 30 local enterprises operating in the above-mentioned sectors met all the criteria and were recognized as outstanding industrial and supporting products by the municipal government.
Banks agree to delay fee hikes
Member banks of the Vietnam Banks Association have agreed not to revise up card service fees for now as requested by the association.
A representative of the association told news website Dan Tri last week that the fee collection is following the road map executed since 2012 and within the fee framework set out by the central State Bank of Vietnam. However, the fee hike must ensure the benefits of all parties involved.
Many big banks have recently raised their charges on cash withdrawals from ATMs to VND1,560 per transaction with ordinary cards and VND2,200 with Gold cards. Inter-bank money transfers are now charged VND11,000 per transaction.
Commenting on the recent fee rises at many banks, Dao Minh Tuan, chairman of the Bank Card Association of Vietnam, said Vietnam started to offer banking services in 1996. Regulations on services with charges are mentioned in the central bank’s Circular 35 issued in 2012.
According to Tuan, banks were allowed to impose ATM fees from March 2013 at VND0-2,000 per transaction. From 2015 onwards, the fee level could be raised to VND3,000 per transaction.
“Though the fee ceiling per transaction of ATM withdrawal is VND3,000, most banks are still charging VND1,000 per same-bank transaction,” Tuan said.
Following the Government’s cashless payment plan, banks have in the past time invested heavily in modern banking services.
Commercial banks’ increased charges of same-bank ATM withdrawal, besides being used to cover costs spent on ATM services, are one of the solutions to reduce cash payments.
Transactions involving domestic cards have picked up from 0.7% in 2013 to 3%, but up to 80% of such transactions are money withdrawals.
Petrol assoc says slow tax refund impacts biofuel traders
The Vietnam Petroleum Association (Vinpa) has voiced its disagreement over the slow refund of excite tax on E5 bio-fuel to traders, saying many enterprises are facing financial distress due to the Finance Ministry’s slowness in this regard.
E5 bio-fuel is a mixture of 95% RON 92 gasoline and 5% ethanol.
Under prevailing regulations, the fossil fuel RON 92 is subject to 10% special consumption tax, while the bio-fuel is entitled to a rate of 8%, meaning the Finance Ministry is bound to refund the differential in tax sums to oil traders, an obligation the ministry has yet to realize.
Data shows around 593,000 cubic meters of E5 bio-fuel was sold in the first two months of the year, accounting for 42% of the total fuel consumption. Consumption of the biofuel rose by over 30% from a year earlier, which is quite high, according to Vinpa.
However, the association said the increasing consumption has placed fuel traders in a dilemma, news website Dan Tri reports.
The differential in special consumption tax between RON92 used to make E5, and finished E5 bio-fuel has led to a large amount of tax arrears owed to traders by the Finance Ministry, which has directly affected financial resources among firms.
Vinpa said the association petition the Finance Ministry on this hangover this January, but it has yet to receive any guidance on the deduction and refund of special consumption tax on E5.
If the situation persists, fuel traders will face numerous difficulties in making E5 a preferred product among local residents, as they cannot offer the product at a competitive price against RON95.
Earlier, Deputy Prime Minister Vuong Dinh Hue on April 3 asked the Finance Ministry to guide the deduction and refund of special consumption tax in line with prevailing regulations and under its authority.
In case the tax deduction or refund proves difficult, the ministry should amend tax regulations accordingly to reimburse enterprises, according to the Deputy PM.
The Law on Special Consumption Tax regulates the tax rate applicable to RON92 gasoline at 10%, while E5 and E10 bio-fuels - mixed with 5% and 10% ethanol - are subject to excise tax rates at 8% and 7% respectively. The lower tax is meant to cut petrol prices to attract more consumers.
Travel firms offer numerous summer tours
Many travel companies in HCMC have launched multiple tours for the upcoming summer season with prices unchanged or increasing slightly compared to normal days.
Two leading tour operators,Vietravel and Saigontourist, have offered summer tours with various promotions such as discounts, extra services and gifts for customers. Several days ago, other tour operators such as TST Tourist and Lien Bang Travelink also began providing such tours.
Vietravel deputy general director Tran Doan The Duy said the company targets selling package tours to 270,000 tourists, up 10% year-on-year, and open tours for 30,000 customers.
The demand for summer tours grows slightly this year. Prices of other services during the peak season are high but the costs of all-inclusive tours have barely increased or are even unchanged as travel firms have prepared such tours long in advance to attract more tour buyers.
Other travel companies also provided the same information, saying tour prices remain affordable though hotel room prices in Phu Quoc, Phan Thiet and Con Dao would grow by an average of 25% to 35% on weekends while those in the central region would go up by 15-25%.
Like in previous summer seasons, beaches and tourist attractions in central provinces were forecast to lure a huge number of tourists.
As for outbound tours, destinations in Southeast Asia countries still capture much interest, but it is Northeast Asia tours that will post the highest growth thanks to relaxed visa policy and reasonable tour prices.
Services for the upcoming summer season are diverse with different tours meeting the needs of customers.
In the past years, tourists preferred to travel on holidays. Nowadays, they tend to travel anytime in the year and carefully study destinations, said TST Tourist general director Lai Minh Duy. He revealed the number of tourists buying tours to France, Switzerland and Italy have surged, and his company will offer tours to Europe for some 1,000 customers from June 1 to August 15.
For the imminent summer season, travel companies have invested heavily in marketing programs to attract customers to book tours early so that they can prepare well tourism services. They have hired celebrities, had their staffers riding motorcycles on streets and posted videos on social media to introduce their products.
Deputy PM orders Sabeco’s back tax review
Deputy Prime Minister Vuong Dinh Hue has told the State Audit Office of Vietnam (SAV) to review its conclusions on back tax and fines imposed on Saigon Beer, Alcohol and Beverage Corporation (Sabeco), the website of Phap Luat newspaper reports.
The order comes after the Deputy PM’s meeting on May 2 with representatives of SAV, the Ministries of Industry-Trade, Finance and Justice, the Government Inspectorate, the Government Office, Sabeco and Hanoi Alcohol Beer and Beverage Corporation (Habeco) over special consumption tax debt owed by Sabeco and Habeco.
Hue requested SAV to review its conclusions on special consumption tax debt, fines on tax payment delays and violations of tax laws in Sabeco and Habeco, and the rights and duties of their shareholders. SAV will later report results to the PM and relevant ministries, agencies and enterprises.
The Ministries of Finance and Justice and the Government Inspectorate were told to swiftly comment on SAV’s conclusions. The Ministry of Industry and Trade was tasked with making a report on their comments and send it to the PM prior to May 10.
SAV earlier sent results of its audits of Sabeco’s financial reports and activities related to the management and use of State capital and assets in 2016. The results showed Sabeco had made more than VND2.9 trillion (US$127.3 million) in profit by 2016.
At the time, the Government held an 89.59% stake in Sabeco, so SAV proposed collecting VND2.5 trillion in undistributed profit of the Government as a majority shareholder of the corporation.
According to a representative of the Finance and Business Renovation Department under the Ministry of Industry and Trade, the retained profit would be used to fulfill special consumption tax obligations and administrative penalties concerning tax obligations.
Sabeco had written to the HCMC Tax Department stating that it paid VND4.7 trillion in special consumption tax to the department in 2016 under the department’s direction.
Sabeco has also agreed to pay over VND2.79 trillion for the State budget as requested by SAV and written to the HCMC Tax Department seeking advice on how to proceed with the payment.
The Ministry of Industry and Trade is instructing Sabeco to pay the tax in line with the law and SAV’s requirements.
The Vietnam Association of Financial Investors (VAFI) has warned that Sabeco’s payment of VND2.5 trillion for the State budget might cause serious consequences. VAFI has written to Deputy PM Hue, the Ministry of Finance and SAV as saying that based on the 2014 Enterprise Law, the firm could not pay dividends to shareholders without its board giving prior approval.
If Sabeco pays VND2.5 trillion for the State budget, Sabeco board members and senior executives of the Ministry of Industry and Trade involved in the problem would violate the Enterprise Law and compensate for losses of thousands of Sabeco’s investors.
Auto sales exceed 80,000 units in Jan-Apr
Vietnam Automobile Manufacturers Association (VAMA) members have reported April sales of 21,123 units, taking to over 80,680 the total in the first four months of this year.
According to VAMA, sales of domestically-assembled cars reached 17,910 units, down a mere 5% month-on-month, while sales of imported completely-built-up (CBU) cars rose a sharp 37% versus last month to 3,213 units, including 13,549 passenger cars, up 5% month-on-month; 6,357 commercial vehicles, down 8%; and 1,217 special-purpose autos, down 8%.
The April auto consumption figure is unchanged from March, at 21,127 units, down 4% year-on-year.
Sales of pick-up trucks which were all imported from Thailand plunged sharply last month due to Government Decree 116. Last month saw nearly 350 pick-up cars sold and most of them were cleared by the customs in 2017.
Chevrolet Colorado cars had gone through the required procedures by end-April. Ford, Toyota and Mitsubishi are still undergoing customs clearance procedures.
As reported by VAMA, from January to April 2018, sales of passenger cars rose a mere 2% to 53,438 units, while sales of commercial vehicles dropped 18% to 23,993 units, and sales of special-use vehicles slipped 36% at 3,250 units.
Sales of locally-assembled cars increased 8% to some 67,960 units, while sales of CBU automobiles plunged 47% at 12,722 units versus the first four months of 2017.
However, auto imports are expected to rise strongly in the next two or three months as Vehicle Type Approval certificates have been issued by authorities of some exporting countries and also approved by the Ministry of Transport.