VIETNAM BUSINESS NEWS JANUARY 2416:32 Tax authorities clamping down on foreign evaders
The total tax debt under the management of tax authorities is estimated at VND104 trillion (US$4.5 billion) as of December 31 last year, a year-on-year increase of 9.3 per cent. The General Department of Taxation reported that it collected VND25.1 trillion by December 31, reaching 83.4 per cent of the assigned debt collection target. The total amount of tax and late payment handled was VND33 trillion, equal to 117.8 per cent of the assigned task. A representative of the General Department of Taxation said that the increase in tax debt was due to the pandemic. Many localities had to apply social distance in accordance with Directive 15/CT-TTg and Directive 16/CT-TTg of the Prime Minister, leading to many difficulties in production and business. Many enterprises fell into a state of loss and insolvency, or their property was mortgaged at banks, leading to taxes not being paid promptly to the State budget. Quadria Capital invests $90 million into Vietnam's mom and baby retailer Con Cung Quadria Capital, Asia’s leading healthcare investment firm, this week announced the completion of its $90-million investment in Con Cung, Vietnam’s largest and fastest-growing mom and baby retail network. The fund will be used to support Con Cung’s ambition to launch 2,000 local stores by 2025, expand its product portfolio, as well as develop an all-in-one super app that provides personalised products and services for over five million Vietnamese mothers. Founded in 2011, Con Cung is a household name in the mother and baby products industry with over 600 fully-owned stores across 45 provinces and cities in Vietnam. ATMs not busy, banking apps congested as Tet nears Although the Lunar New Year (Tet) is nearing, long queues of people are no longer seen at automated teller machines (ATMs) like in previous years. Instead, online transactions on banking applications are facing difficulties, with network congestion frequently reported by users. Regarding faults of banking apps, representatives of some banks said that the sudden increase in transaction demand in recent days has caused overload of the system sometimes, disrupting services. All banks have urgently taken measures to stabilise their services soon. To avoid network congestion when doing online transactions or having to wait in line to withdraw money at ATMs or transaction offices, banks recommend that users plan ahead and avoid peak times. Nearly 55 per cent of Japanese firms in Vietnam gained profits despite pandemic The Japan Trade Promotion Organization (JETRO) has just published a study of 4,600 Japanese businesses operating in roughly 20 Asia-Pacific regions, including 700 in Vietnam. According to the findings, 54.3 per cent of Japanese enterprises in Vietnam are expected to have been profitable in 2021, up 4.7 percentage points from the previous year. While the rate of businesses that suffered losses was 28.6 per cent, it was down 1.5 percentage points from the previous year. Amid fears that businesses would be irreparably impeded as a result of the strict and prolonged social distancing period, according to Takeo Nakajima, chief representative of JETRO, more than 55 per cent of Japanese businesses still want to expand their operations in Vietnam in the next 1-2 years (the highest proportion among ASEAN nations); and 42.5 per cent of businesses plan to remain at their current size while only 1.9 per cent want to trim down or close their operations. As a result of its market size and development potential, Vietnam consistently ranks among the top destinations for Japanese companies looking to expand their operations abroad. Furthermore, as compared to other nations, Vietnam's socio-political stability and high quality of labour are distinguishing characteristics, said Takeo. When it comes to the future of Japan's investment flow, Takeo is fairly optimistic. He believed a large number of agreements between Vietnamese and Japanese enterprises worth billions of dollars were made during Vietnamese Prime Minister Pham Minh Chinh's visit to Japan in November, particularly during his visit to Tokyo. This would be a critical precondition for any new Japanese investment projects in Vietnam. Lossmaking plants to afloat thanks to Government scheme Thanks to a scheme for state-owned enterprise (SOEs) restructuring during 2016-2020, many unprofitable plants have been reinvigorated, according to reports. Viet Nam Oil and Gas Group (PVN) revealed that in 2021 four of its plants were taken off the list of 12 large-scale lossmaking plants in the industrial and commercial sector. These four plants include the Dinh Vu polyester plant under Viet Nam Petrochemical and Fiber JSC (VNPOLY) and Dung Quat bioethanol plant under Central Petroleum Biofuel JSC. DAP-1 Hai Phong under DAP VINACHEM JSC was another plant that did quite well last year. DAP-1 Hai Phong produced its first fertiliser batch in April 2009. It made the first loss of VND461.8 billion ($20.4 million) in 2016 and found itself among the 12 ailing plants of the industrial and commercial sectors. After restructuring, the plant began to operate profitably and had its name removed from the list. By late Q3 2021, its earnings hit around VND158 billion ($7 million), 232 per cent higher than the full-year target. Eleven-month output reached 239,362 tons, up 31 per cent compared to 2020. It is also worth noting that the Government has urged agencies to clear all the backlogs to have Thai Binh 2 thermal plant connected to the national power grid in 2022. Thai Binh 2 is an unfinished billion-dollar project that incurs a daily expense of billions of dong to the State Budget to service its debts. The project began construction in March 2011 but was unable to finish after ten years. Its financial burden caused public dismay. “Generator Number 1 will connect to the power grid on May 19, 2022. Coal combustion starts on June 16 and power generation in Number 1 begins on November 30. Generator Number 2 follows suit on December 31,” said the manager in charge of the project. Currently, the overall project is 87 per cent complete, construction 85 per cent and design 100 per cent. The number of workers employed on the ground stays at 459, the manager added. Thai Binh 2 power plant is expected to add 1,200 megawatts of power to the national grid. Securities companies report record profits Securities companies reported huge revenues and profits last year on the back of impressive growth by the stock market. SSI Securities Corporation achieved revenues and pre-tax profits of VND7.77 trillion (US$342 million) and VND3.33 trillion ($146.57 million), increases of 71.7 per cent and 112.6 per cent from 2020. Viet Capital Securities reported profit before tax of VND1.85 trillion ($81.43 million) on net revenues of VND 3.73 trillion ($164.18 million), 95 per cent and 115 per cent up. Viet Dragon Securities Corporation said its revenues were 123 per cent up at nearly VND1.04 trillion and pre-tax profit wasVND 534.9 billion, 185 per cent up. Agribank Securities Corporation and KB Securities Vietnam JSC and Tecom Securities also reported higher profits. Despite being affected by the COVID-19 pandemic, the stock market saw a record year. The VN-Index repeatedly rose to new highs, market capitalisation rose sharply, liquidity continued to rise after starting in 2020, and the number of investors exploded. S.Korean firms keen to enhance investment in HCMC Many South Korean enterprises have chosen HCMC as a destination to develop their business and will increase their investment in the city in the coming years, said South Korean Ambassador to Vietnam Park Noh Wan. At a meeting with HCMC Chairman Phan Van Mai on January 21, Park said South Korea was interested in the HCMC market and would hold a seminar to promote investment, trade and technology development in HCMC with the participation of 50 South Korean businesses. South Korean firms which have been operating in HCMC also have plans to expand their operations in the city. A representative of CJ Group said the firm would develop a large industrial and cultural complex in Tan Phu District. Park also mentioned some difficulties facing South Korean investors in HCMC. Specifically, after the city brought the pandemic under control, many firms sought to send their experts and technicians to Vietnam, so Park proposed the HCMC government ease regulations to facilitate foreign firms. He added that when representatives of South Korean companies come to the city, they tend to bring along their families. However, the international school in District 7, where many South Korean people live, is overcrowded, so the city should make conditions easy to expand the school. Work starts on Dien Bien airport expansion project The Airports Corporation of Vietnam (ACV), the Ministry of Transport and the government of the northern mountainous province of Dien Bien today, January 22, began work on a project to expand the Dien Bien Airport, which costs over VND1.4 trillion. The airport will be upgraded to receive larger aircraft such as Airbus A320s and A321s and the like. The current runway will be expanded from 1,830×30 meters to 2,400×45 meters, the local media reported. In addition, the passenger terminal will be upgraded to have two floors, with the first floor serving passengers arriving at the airport and departing from the airport and the second floor for lounges, trade and auxiliary services. The terminal’s capacity will be increased from 300,000 to 500,000 passengers per year. The investment for the airport expansion project will be sourced from ACV’s budget, while site clearance will cost nearly VND1.6 trillion, sourced from the Dien Bien province’s budget. The project is expected to be completed in the third quarter of 2023. Axis road project in Soc Trang gets off the ground The construction of an axis east-west road project running through Soc Trang Province began today, January 21, with a total investment of around VND2 trillion. The 57-kilometer route will start from Nga Nam Town, pass through the districts of My Xuyen and Tran De, and end at Vinh Chau Town in the Mekong Delta province. At nine meters in width, the two-lane route will allow vehicles to travel at a maximum speed of 60 kilometers per hour. Of the total investment, construction costs will account for VND1.5 trillion, while the cost for resettlement exceeds VND220 billion. The project is slated for completion by mid-2025. The route will connect Soc Trang with the neighboring provinces of Hau Giang, Bac Lieu and Ca Mau in the delta, promote trade at the Tran De Port as well as wind power projects in Vinh Chau Town, said a representative of the Project Management Unit 2 in Soc Trang, which is the project’s investor. U.S. spends US$96 billion on imports from Vietnam in 2021 The United States remained Vietnam’s largest importer in 2021, with an import value of over US$96.2 billion, up 24.9% year-on-year, according to statistics from the General Department of Vietnam Customs. Last year, the United States imported smartphones and accessories worth a total of nearly US$9.7 billion from Vietnam, rising by 10.3% year-on-year, while the former was the latter’s largest importer of computers, electronics products and accessories, with a value of US$12.7 billion, up 23% against the previous year. In addition, the United States’ imports of machinery, equipment and components from Vietnam last year soared by 45.9% year-on-year, at US$17.8 billion. The United States took the lead in apparel imports from Vietnam at US$16.1 billion in 2021, and spent US$8.8 billion buying wooden products from the latter, up 22.4% against 2020. Meanwhile, the United States shipped goods worth US$15.3 billion to Vietnam in 2021, up 11.4% against 2020. Vietnam enjoyed a trade surplus of over US$81 billion with the United States in 2021. FDI rebound is key to economic growth in 2021 The Ministry of Planning and Investment reported that foreign investment inflows reached US$ 31.15 billion in 2021, representing a year-on-year increase of 9.2%. Specifically, the country granted licenses to 1,738 FDI projects with a total registered capital of US$ 15.25 billion, down 31.1% in number but up 4.1% in value. As many as 985 projects increased investment capital by US$ 9.01 billion, up 40.5%. Meanwhile, the amount of FDI disbursement hit US$ 19.74 billion, a year-on-year decline of 1.2%. The FDI sector also gained a trade surplus of nearly US$ 28.5 billion, contributing to offsetting the trade gap of the domestic sector. Noticeably, Viet Nam attracted a series of large-scale FDI projects including Long An Power Station Project (US$ 3.1 billion), LG Display Hai Phong's project (adding US$ 2.15 billion), and a US$1.6-billion semiconductor plant of Amkor Technology. In 2022, Viet Nam will continue to pursue selective FDI attraction policies which focus on quality of projects, said Minister of Planning and Investment Nguyen Chi Dung. Viet Nam will enable investment in the high-tech sector and source technology so that the FDI sector would make greater contribution to structure transformation and economic modernization. Gov’t extends payment deadlines for US$5.3 billion worth of land rental fees in 2021 The Vietnamese Government in 2021 extended the payment deadlines for VND121 trillion (US$5.3 billion) worth of land rental fees for businesses and individual households affected by the pandemic. Businesses eligible to these programs are of micro, small and medium-size, said Phung, adding the extension of payment deadlines of taxes and fees also subject to foreign banks and credit institutions providing support for enterprises and people affected by the pandemic. Data from the MoF revealed nearly VND130 trillion ($5.74 billion) in land rental fees were waived or had payment deadline extended in 2020, including around VND31.5 trillion ($1.4 billion) being waived for businesses and VND97.5 trillion ($4.3 billion) whose payment deadlines extended. In 2021, the Government decided to extend the validity of the program and expand its scope to help enterprises and people cope with the Covid-19 pandemic. The MoF also pushed for greater administrative reform efforts to aid taxpayers, including the removal of 30 fees and expenses for businesses worth a total of VND1 trillion ($44.2 million). Hanoi to push for comprehensive digitalization in 2022 Hanoi plans to push for a comprehensive digitalization in every public department and unit and eventually to every socio-economic activity in 2022. Vice-Chairman of the Hanoi People’s Committee Chu Xuan Dung gave the remarks at a conference held by the municipal Department of Information and Communications to discuss the objectives set for 2022 on January 21. To realize this goal, Dung called for the Department to accelerate the formation of the e-government model and the digital transformation program in the capital city in the 2021-2025 period, along with the proposal of making Hanoi a smart city by 2025, with a vision to 2030. In this regard, Dung expected a strong development of information and communication technologies would serve as the foundation for the establishment of Hanoi’s e-government. At the meeting, Vice Director of the Hanoi’s Department of Information and Technology Nguyen Viet Hung said IT application has been one of Hanoi’s main instruments in pushing for both Covid-19 containment and socio-economic recovery in 2021. As of December 31, 2021, Hanoi is home to nearly 8,500 IT companies. Last year, the city’s IT sector posted combined revenue of VND321.3 trillion ($14.2 billion) and created jobs for 189,500 people. More than VND200 trillion of loans on stock market According to the Vietnam Securities Depository (VSD), outstanding loans (mainly margin loans) on the stock market by the end of 2021 were about VND193 trillion (equivalent to US$8.4 billion). If including third-party loans, the outstanding loan balance on the stock market would be more than VND200 trillion. Accordingly, the outstanding loans of securities companies at the end of 2021 increased by about VND100 trillion compared to the previous year. Some securities companies had high margin loans at the end of 2021, such as SSI with nearly VND23.7 trillion, Mirae Asset with more than VND17.28 trillion, TCBS with more than VND15.85 trillion, VNDirect with more than VND15.47 trillion, and HSC with VND13.69 trillion. According to the VSD, the number of new securities accounts opened by domestic investors in 2021 hit a record, with more than 1.5 million accounts, much higher than the total number of new accounts opened in many previous years. Vietnam striving to regain foothold for pepper industry Vietnam is seeking ways to revive the billion-dollar pepper industry which has been struggling against unfavorable weather conditions and the Covid-19 pandemic for over the last several years. The Vietnam Pepper Association (VPA) is considering importing pepper from neighboring countries to ensure sufficient supply for domestic processing, according to Chairman Nguyen Hai Nam. Last year, Vietnam’s pepper imports from Cambodia soared 111 percent compared to 2020, he said. Pepper output in Cambodian provinces bordering with Vietnam can reach 30,000 tons per year. Despite the fact that the number only accounts for one-tenth of Vietnam’s output, it can help ease the shortage in the coming time. Data from the VPA shows that pepper was sold at VND90,000 (US$3.98) per kg last year, almost doubling the previous year’s VND48,000 per kg, after constant reduction over the last few years. In 2021, Vietnam exported 260,000 tons of pepper for some $950 million, down 9 percent in volume and up 44 percent in value against 2020. Reference exchange rate down 15 VND at week’s beginning The State Bank of Vietnam set the daily reference exchange rate for the US dollar at 23,062 VND/USD on January 24, down 15 VND from the last working day of previous week (January 21). With the current trading band of +/-3 percent, the ceiling rate applicable to commercial banks during the day is 23,754 VND/USD and the floor rate 22,370 VND/USD. Lam Dong sets to welcome 5 million visitors in 2022 The Central Highlands province of Lam Dong eyes to welcome 5 million visitors, including 150,000 foreigners, this year, heard at the conference held by the provincial Department of Culture, Sports and Tourism on January 23. To this end, the province plans to restore some traditional festivals of local ethnic minority groups and launch various new tourism products, such as adventure tours in Tuyen Lam Lake in the resort city of Da Lat and Bidoup Nui Ba National Park, and healthcare, camping and glamping tours in Da Lat. It will also introduce a week-long travel festival this year and develop Da Lat as a smart tourism city. Lam Dong has received a large number of vacationers at the end of last year, signaling a good start for the industry recovery in 2022, said Deputy Director of the provincial Department of Culture, Sports and Tourism Nguyen Thi Bich Ngoc. The province will not only improve its service quality and create new products but also provide visitors with the best conditions when it comes to COVID-19 rules, given the relatively high vaccine coverage, she said. Vietnam exports over 453 million medical maks in 2021 Vietnam exported a total of 453.1 million medical face masks of all kinds in 2021, according to the General Department of Vietnam Customs (GDVC). With 44.8 million pieces sold to foreign markets last December, down 8.6 percent against the previous month, the export declined after rising for four consecutive months. The masks were shipped abroad by 12 businesses. Civil construction to benefit from public investment wave Civil construction is likely to be one of the sectors that enjoy direct or indirect benefits from the Government’s public investment wave, according to insiders. A report by Mordor Intelligence showed that Vietnamese construction market value reached 57.5 billion USD in 2020 and is expected to hit 94.9 billion USD in 2026, with an annual growth rate of 8.7 percent in the 2021-2026 period. The sector made up 8 percent to the country’s growth on the average in the past 10 years, it said Meanwhile, the General Statistics Office revealed that in 2021, the production value of the sector topped 1.9 quadrillion VND (83.6 billion USD), up 5.1 percent year on year despite COVID-19 impacts. In the coming time, public investment will be a great resource that the Government pours into infrastructure projects to promote growth and support economic recovery. In 2022, the Ministry of Transport is allocated the largest ever middle-term public investment captial amount of over 50 trillion VND. In the next five years, it plans to implement 67 new projects, including 12 ones belonging to the North-South Expressway. Vietnam-China trade enjoys strong growth in 2021 Bilateral trade between Vietnam and China still recorded strong growth in 2021, despite the negative impacts of COVID-19 on global trade, according to Vietnamese commercial counsellor in China Nong Duc Lai. He cited data from Vietnam’s customs, stating that two-way trade reached 165.8 billion USD in 2021, up 33.5% from a year earlier, while data according to China’s customs showed that bilateral trade exceeded the 200 billion USD mark for the first time, reaching 230.2 billion USD, up 19.7% from 2020. With such figures, China continues to be Vietnam’s largest trading partner and second largest export market, while Vietnam was China’s largest trading partner in ASEAN and its sixth largest trading partner in the world. According to Lai, the bright spot for bilateral trade in 2021 was the high growth rate of 33.5% according Vietnam’s statistics and 20% according to China’s data. These figures demonstrate the stability in trade between Vietnam and China despite the difficulties due to coronavirus restrictions over the past few years. Six Vietnamese sectors obliged to keep greenhouse gas inventories The energy, transportation, construction, industry, agriculture, and waste sector are now legally required to establish and report their greenhouse gas (GHG) inventories to relevant authorities since January 18. Deputy Prime Minister Le Van Thanh has signed Decision No.01/2022/QĐ-TTg on the list of sectors and facilities subject to greenhouse gas (GHG) inventories, effective since January 18. Accordingly, the list includes the six aforementioned sectors and hundreds of facilities. The facilities include 1,662 in the industry and trade sector, 70 facilities in the transport sector, 104 in the construction sector, and 76 in the natural resources and environment sector. Accordingly, the facilities must carry out GHG inventories and provide related information for the Ministry of Natural Resources and Environment (MoNRE) about the total energy consumption and working capacity, which the MoNRE will gather and produce reports for the prime minister. Seaports handle over 60 million tonnes of goods in January Vietnam’s seaports are projected to handle more than 60 million tonnes of goods in the first month of 2022, equivalent to the same period last year, announced the Vietnam Maritime Administration (VMA). The total volume of container cargo going through seaports is estimated to hit 2 million TEUs in the period. The expansion of the containers shipping market, which is forecast to last until the end of this year, along with a trend in raising vessels’ capacity, will open up major opportunities for Vietnam’s seaports, notably gateway ones of Cai Mep-Thi Vai in Ba Ria-Vung Tau southern province and Lach Huyen in the northern port city of Hai Phong, said Tran Khanh Hoang, Vice Chairman of the Vietnam Seaports Association. Source: VIR/VNS/VNA/VOV/SGT/SGGP/Hanoitimes |
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