Total taxes exemptions and delays added up to VND10.7 trillion (USD5.2 billion) by the end of July, said the Minister of Finance.

According to the Ministry of Finance, the amount of VAT in April, May and June for 200,000 enterprises which have been delayed reached VND10 trillion, and 8,260 enterprises have their corporate tax deadlines extended, equaling a total of nearly VND350 billion.

VND340 billion of land rental fees from this year were cut in half for 3,000 businesses, and 40,000 households involved in aquaculture and salt processing were also granted exemptions equalling VND10.6 billion.

The Ministry of Finance also completed allocations for an additional VND2 trillion in loans for dyke strengthening, development of transport infrastructure in rural areas and traditional villages.

The Government spent VND498,160 billion in the the first seven months of 2012, an increase of 15% from last year. The Ministry of Finance said the money spent was to assure the success of governmental policies such as salary reform.

According to the General Department of Taxation, the economy is also showing signs of strength, with 46,818 new enterprises set up in July, of which 42,349 are private.

Bad times for coal sector could affect half a million

As many as half of million of people could be affected by difficulties facing the Vietnamese coal sector, according to the Vietnam National Coal Mineral Industries Holding Corporation Ltd.

Currently, more than 108,000 pit workers are working at coal mines in the northern province of Quang Ninh. The poor performance of these mines has the potential to effect not only workers, but their families as well, a number that has been estimated to be as large as 500,000, or half of the province's population.

According to the company, Vinacomin counted on a certain amount of inventory in order to ensure jobs for pit workers. Despite cutting between 5% and 15% in salaries this year, they say they are trying to maintain the salaries of pit workers at the same level as last year.

In July, Vinacomin sold 2.2 million tonnes of coal, including 300,000 tonnes that were exported, a record low in recent years.

The Electricity Regulation Agency of Vietnam says that the Electricity of Vietnam (EVN)’s power sales has also dropped as a result of a fall in coal consumption. This downtrend is forecast to continue in coming months.

Beginning July 1, when electricity prices were scheduled to increase, coal price also went up by 10%-11.5%, but Vinacomin still claimed losses of VND8.5 trillion (USD407 million) because their selling prices were below actual market value. Without any foreseeable way to offset their losses the group predicts no profit in 2012.

VAT continues to pose difficulties for foreigners

Foreigners still encounter problems with tax refunds on goods purchased in Vietnam subject to value added tax (VAT).

The General Department of Customs officially opened offices to refund VAT to international travellers at Noi Bai and Tan Son Nhat International airports on July 1.

According to the Noi Bai International Airport Customs Department, in July, only 38 foreigners received VAT refunds, totaling VND74 million (USD3,523). The official number was still up from those of August, which came to VND70 million (USD3,333). Most of the applicable goods were imported clothes, bags, wallets, jewelleries and leather belts.

However, some problems still exist, hindering the VAT refund application for foreigners.

A number of tourists submitted purchase invoices for VAT refunds, but the papers were not considered valid because they were issued by companies which are not in the list of firms in the pilot VAT refund programme. Many invoices were deemed invalid because of stipulations in Circular 58/2012/TT-BTC on the VAT refund for foreigners.

Many shops and companies not included in the list of firms on the pilot VAT refund programme have tried to sell their products, instructing people that their purchases would be valid on VAT invoices. However, the confusion has led to many upset travelers who were not informed about the status of their purchases until they reached their airports.

Currently, the VAT refund process uses manual input methods and has not been digitized, while the ratio of VAT cases to customs officers is about 1-2.

By August 3, as many as 30 companies have been put on the list of the pilot VAT refund programme, including 18 in HCM City.

Tan Son Nhat International Airport Customs Department said that closer co-operation is needed between tax, customs, tourism, banking and aviation agencies. They also added that modern technology should be implemented for VAT refunds at international ports. Simple communications issues are also at play, including informative leaflets handed out during flights.

Dragon fruit enters US market

Vietnam’s dragon fruit will be directly shipped to the US for food irradiation before being distributed to supermarkets across the country.

Consignments will be delivered to the US agency for the irradiation service as of August 20, according to Nguyen Huu Dat, director of the post-import plant quarantine centre No2.

This is the only Vietnamese kind of fruit that has enjoyed preference from the US, and the move shows that the product has built up trust in this demanding market, said the director.

With the US easing import regulations, Vietnam will have a good chance to promote and expand outlets for its dragon fruit, said Dat.

Early this year the US Patent and Trademark Office (UPSTO) granted a patent to the dragon fruit grown in the southern province of Binh Thuan, recognizing the brand name Binh Thuan, Dragon Fruit, and the image of the fruit.

Bui Dang Hung, president of the Binh Thuan province Dragon Fruit Association, said the US organization’s recognition will help Binh Thuan Dragon Fruit to secure a firm foothold in this market, protecting its prestige and US consumer rights.

Although Binh Thuan, which has the largest acreage under dragon fruit cultivation in Vietnam, is at the peak of the harvest time, the price of the fruit is increasing 30-40 percent compared to the off-peak season.

Nearly 47,000 businesses set up in seven months

Nearly 47,000 businesses in Vietnam were established in the first seven months of this year, according to the General Department of Taxation.

Of the sum, private firms accounted for the majority with 42,349.

About 940 enterprises that suspended operations in the first half of the year restarted business last month.

Pre-tax profits for all enterprises in Vietnam in the second quarter stood 2.5% higher than in the first quarter. Pre-tax profits earned by state-owned enterprises increased by 5.8% over the first quarter of the year.

Vietnam sees first bank merger of the year

The State Bank of Vietnam (SBV) has given the final approval for the merger between SHB and Habubank, the first merger under the country’s banking restructuring plan initiated in April this year.

This is also the second merged bank, following in the path of the Ficombank, TinNghiaBank and Saigon Commercial Bank union in December last year.

Under the SBV’s decision, during the merger process, the Saigon-Hanoi Bank Commercial Joint Stock Bank (SHB) will take over the legal whole assets, rights, duties of the Hanoi Building Commercial Joint Stock Bank (Habubank). Within 15 working days after the decision takes places from August 28, SHB must complete all business register procedures and announce the merger. Habubank will have to hand over its entire assets, rights and duties to SHB.

According to Tuoi Tre Newspaper, the new bank, which will trade under SHB will have 54 branches and 150 transaction offices countrywide, and some 5,000 bankers and employees. The bank has a total registered capital amounting to VND9 trillion (USD428.6 million), enabling SHB to become one of the country’s eight largest banks by assets. Its total assets are expected to reach VND123 trillion (USD5.85 billion) by the end of this year.

The two banks held a shareholder meeting last April, after which SHB began to take over management activities in Habubank.

A news source said that, after the decision, the two sides would withdraw HBB coded Habubank shares listed at Hanoi Stock Exchange (HNX) and then seek approval from the State Securities Commission to issue convertible shares.

HCM City promotes huge discount month

Enterprises in HCM City are to spend huge money on the annual promotion month with hope of stimulating consumer spending during the current hard economic times.

HCM City Department of Industry and Trade said about 750 enterprises have registered for the discount month starting September 1. Although the number of registered enterprises has only increased by 7%, the amount of money spent is forecasted to be much higher than 2011.

Hoping to boost their sales during one of the biggest promotion months of the city, business owners have no hesitation in spending tens of billions of VND on their advertising.

Nguyen Minh Thu, Vice Director of Thien Nam Hoa Trading and Services Company said it would spend VND22 billion (USD1.1 million), an increase of VND7 billion compared to last year. The company will also co-operate with 20 electronic groups and banks to offer discounts of 10-49% on products, with an additional 10-15% discount for customers using credit cards.

Despite higher expenses, the company are anticipating their sales to increase by 170%, down on the 180% recorded last year.

Tran Thi Tuyet Hoa, Deputy General Director of the Co-operative Union Trade Ho Chi Minh City (Saigon Co-op) said the union will double their spending in this discount month to VND100 billion.

VND80 billion will be discounted from the goods and VND20 billion will be used on vouchers. The number of suppliers has also stepped up from 450 to 600.

"Businesses have experienced a slump since early this year so we’ve only recorded 10% growth. With the discount programmes, we’re hoping for 30-40% growth we had last year." she said.

The month-long discount is an annual city event, held by the local Department of Industry and Trade and the Department of Culture, Sport and Tourism to stimulate consumer spending. Aside from the sales, lucky draws and gifts, the organisers will also set up mobile sales outlets in rural areas this year.