HCMC’s CIT revenue soars in H1

Corporate income tax (CIT) revenue in HCMC grew nearly 18% in the first half of this year compared to the same period last year, buoyed by company stake transfers and better performance of enterprises in the southern city.

A first-half report of the HCMC Department of Tax showed the stake acquisition deal between Siam City Cement Vietnam and Holcim Vietnam was taxed VND1.8 trillion. The Thai-owned cement producer acquired LafargeHolcim’s 65% stake in Holcim Vietnam.

In the January-June period, the city taxman collected more from a number of better-performing businesses. For instance, Unilever Vietnam International Co Ltd paid VND308 billion, up 70.64% compared to the same period of 2016.

The tax agency collected VND369 billion from VPBank, up over 100%, and VND151 billion from Shinhan Bank Vietnam, up 18.54%.

The agency had reported year-on-year CIT collection increases of 30.54% from foreign-invested firms and 16.82% from non-State businesses in the year to end-June. However, tax revenue from State-owned enterprises in the city contracted in the period.

The first half saw CIT revenue in HCMC expanding 17.79% year-on-year, the highest growth rate in three years. The growth in the same period last year was just higher than 16% while revenue in the first six months of 2015 dropped 3.5% over the year-earlier period.  

Special consumption tax revenue in the first half edged up 17.06% versus the January-June period of 2016, down from 28.23% in the same period of last year. The increase was credited to stronger sales of many goods and a higher tax rate on a number of goods, including under-nine-seat cars. 

Major special consumption tax payers included Saigon Tobacco Co Ltd with less than VND1.37 trillion, up 27% year-on-year; Vina-Bat Joint Venture with VND875 billion, up 55.74%; Mercedes-Benz Vietnam with over VND1.58 trillion, up 85.84%; and Heineken Vietnam Brewery with roughly VND3.82 trillion, up 15.1%.  

Value-added tax revenue in the first six months rose by 11.53% over a year ago, the lowest in three years. The slowdown resulted from a sharp plunge in the real estate sector.

In all, the HCMC tax agency obtained tax revenue of VND64.5 trillion from production and business in the first half of this year, an 11.2 rise year-on-year, meeting 42.87% of the full-year target. The figure accounted for more than 58% of total tax revenue from domestic sources.

Domestic collections in the six-month period exceeded VND111 trillion (excluding crude oil), surging 22.88% compared to the same period last year and meeting over 49% of the full-year target.

Data of the tax department showed 198,696 businesses had been active by the end of June. 

According to the tax agency, personal income tax revenue in HCMC in the first six months grew 20.9% over the year-earlier period. Of which, collections from taxable wages made up the biggest share, 76.77%, and increased over 19%. 

The agency ascribed the strong rise to an increase in personal tax payers after it launched a series of tax management measures.

Commercial banks lower loan interest rates

Following the State Bank of Vietnam cut the interest rate of short-term loan for some prioritized sectors, commercial banks in Ho Chi Minh City have reduced loan interest rates. 

Vietnam Bank for Agriculture and Rural Development, or Agribank, offers the interest rate of 6.5 percent a year for short-term loans and 8 percent for medium and long-term ones for prioritized people as per the circular 39/2016/TT-NHNN from July 10.

Additionally, Agribank continued to cut its activity expenses to improve business and then lower loan interest rate for special sectors and lower fees in a bid to share difficulties with customers.

Meantime, VPBank also announced a decreased loan interest in short term for small and medium enterprises (SME); accordingly, short term loans for SME will go down by 0.5-1 percentage points. The new interest rate will be applied from July 10.

Since July 8, LienVietPostBank cut 0.25 percentage point for loans of all terms for enterprises with healthy activities.

Moreover, some prioritized sector will enjoy interest rate of 6 percent a year for short-term loans which 0.5 percentage point lower than the government’s the interest rate ceiling.

Shoes & Leather Expo opens July 12 in HCM City

The Vietnam Leather, Footwear and Handbag Association has announced that all systems are go for the 19th Shoes & Leather Expo (July 12-14) at the Saigon Exhibition and Convention Centre in Ho Chi Minh City.

This year’s exhibition will hold numerous seminars discussing the latest technology and recent fashion trends in the shoes and leather industries providing unique perspectives of highly regarded industry professionals.

It is anticipated that more than 15,000 professional buyers will visit the fair seeking business opportunities in the segments of shoe making and tanning machinery, leather and materials, shoe components, finished products and chemicals among others.

RoK group to build waste treatment plant in Hung Yen

The Republic of Korea (RoK)’s Hao group is keen on investing in a waste-to-energy plant in the northern province of Hung Yen. 

At a meeting with local authorities on July 10, the Hao group’s representatives said the group plans to pour 76 million USD into building a waste treatment plant with a designed daily capacity of 150 tonnes of waste.

The project includes an incinerator and an electricity generator, a set of high-capacity batteries, a set of waste fermentation processing and microbiological fertiliser production facilities.

The group wishes the province to facilitate the implementation of the project.

Chairman of the provincial People’s Committee Nguyen Van Phong affirmed the province’s support to the project and requested the group to conduct thorough feasibility studies.

The province assigned the provincial Department of Planning and Investment to coordinate with the provincial Department of Natural Resources and Environment, Department of Construction to select a proper location for the project.

NPC signs 22.7 million USD loan deal

The Northern Power Corporation under the Electricity of Vietnam Group (EVN NPC), signed a syndicated loan agreement worth 515 billion VND (22.7 million USD) last week for the period of seven years.

The Vietnam International Commercial Joint Stock Bank (VIB) is the focal point for arranging this loan, in collaboration with the Taipei Fubon Commercial Bank (Hanoi branch) and the First Commercial Bank (HCM City branch).

EVN NPC is one of the five electricity distribution corporations of the EVN, with management area of 27 provinces in the North and North Central regions (excluding Hanoi).

The corporation aims to further develop the grid to meet annual growth rate of 13-15 percent from now until 2020.

The successful signing will help EVN NPC carry out investment activities to upgrade and expand distribution network in the future.

The Taipei Fubon Commercial Bank and the First Commercial Bank, two of Taiwan’s leading banks, have pledged to provide financial support to companies and corporations, supporting the development of Vietnam’s economy.

This agreement is also one of the first syndicated loans arranged by local banks with full co-financing from foreign bank branches in Vietnam.

Australia – Potential market for Vietnamese garments, footwear

A conference introducing export potential of Vietnam’s garments, handbags and leather footwear to the Australia market was held in Hanoi on July 10. 

The event, co-held by the Hanoi Investment, Trade and Tourism Promotion Agency and Australia International Exhibition and Conference Group (IEC), brought together over 60 Hanoi-based businesses operating in the fields of garment, textiles, leather footwear and fashion, along with associations and organisations which have high export demand to Australia and New Zealand. 

At the conference, participants were briefed on Southeast Asia’s garment and textiles market and Australia and New Zealand’s import potentials for garment, textiles and leather products. 

The conference was a good opportunity for Vietnam export businesses to broaden their network with Australia partners, thus increasing availability of Vietnamese goods in the market, said Nguyen Mai Anh, deputy director of the agency.

Meanwhile, IEC Director Julie Holt said Australia boasts great purchasing power although its population is less than the US and Europe, adding that Vietnam ranked second among countries exporting footwear products to Australia with export turnover of 32 million AUD. 

The director also noted that Vietnamese firms should follow international standards to meet requirement of importers.

According to data the General Department of Vietnam Customs, in the first quarter of 2017, two-way trade between Vietnam and Australia reached 1.35 billion USD. Vietnam exported 687 million USD worth of goods to Australia, up 8.3 percent, while importing 665 million USD worth of products from the market, down 18.6 percent compared to the same period last year. 

During the reviewed period, Vietnam raked in 50 million USD from footwear exports to Australia, up 24.6 percent and 42 million from garment and textile products, up 13.6 percent.

Way to 2017 target paved with good intentions

Vo Tri Thanh, a senior economist at the Central Institute for Economic Management (CIEM) and a member of the National Financial and Monetary Policy Advisory Council, has given his analyses of the way to achieve the 2017 GDP target.  

He said late last week, the General Statistics Office of Vietnam announced that the country’s Gross Domestic Product (GDP) growth in the first half of the year reached 5.73 percent.

Given that this is the second highest H1 growth rate since 2011, one would think that it is a good sign for the economy.

However, when compared with the annual growth target of 6.7 percent, the H1 growth seems to fall far short. It is estimated that our GDP must leapfrog by 7.4 percent in the second half of the year to meet the ambitious annual growth target.

Historically, Vietnam has never seen an H2 GDP increase of 7.4 percent. The growth rate in the first quarter of this year was 5.1 percent, the lowest in the last three years. It is worth noting that the country also missed the 6.7 percent growth target last year, reaching only 6.21 percent.

That this target is taken very seriously is evident from the fact that the Government issued a resolution on the very first day of this year (because the target was approved by the National Assembly late 2016) in which a series of tasks and solutions were mapped out for ministries and agencies to improve their management and deal more effectively with existing problems of the economy.

Never before has GDP growth received so much attention and never before has the Government been so determined and peremptory that it did not lower the target despite several economists’ saying that it was not feasible.

As late as June 02, the Prime Minister Nguyen Xuan Phuc issued Directive No 24/CT-TTg to remind ministries and agencies to focus on taking both short and long-term measures to make the target achievable.

Generally, the GDP is one of the primary indicators used to gauge the health of an economy. It represents the total value of goods and services produced within a country’s borders within a specific period of time – monthly, quarterly or annually. In economics, income, expenditure and production are equal to each other, meaning that one individual’s spending is another’s income.

So a higher GDP shows an increase in production value added and a rise in the income of people, which would translate into higher living standards, because with higher disposable income, people can spend more on quality goods and services like education and health care.

For developing and lower-middle-income countries like Vietnam, a high GDP growth is indispensable for catching up with developed and high-income countries.

Furthermore, GDP growth carries greater import this year because 2017 is an important transitional year in implementing the 2016-2020 socio-economic development plan, which sets average growth for the period at 6.5-7 per cent per year.  A failure to reach this year’s target would put much greater pressure on the remaining years.

In addition, over the past year, the current administration has shown its determination and efforts to build a constructive, trustworthy Government.

Thus, it is understandable that the Government wants its efforts to achieve specific, positive and practical results. 

However, GDP is not a target that can be achieved merely on a Government’s aspirations. It depends on business and investment decisions of households and enterprises in both State-owned and private sectors, foreign and domestic. These decisions, in turn, depend on internal and external economic factors that are to some significant extent beyond the State’s control. 

In other words, the Government’s management cannot directly yield an increase in GDP, though it is undeniable that its economic policies have impact on promoting growth.

With this rationale in mind, there is no point in debating whether or not the year’s target of 6.7 per cent is too high, as it has happened recently. Instead, it is worthwhile discussing how this goal can be achieved.

As mentioned above, the Government has mapped out several short-term solutions. Now, let’s see whether they suit the long-term plans, targets and directions that Vietnam wants to follow to ensure sustainable, inclusive growth.  

One of the measures is to increase the output of crude oil beyond the plan originally assigned by the Prime Minister. This is expected to be the fastest way to shorten the distance to the 6.7 percent goal.

The Ministry of Industry and Trade has calculated that if an extra million tonnes of oil were exploited, it would contribute an additional 0.25 percentage points to the GDP growth rate.

However, this measure is inconsistent with a growth model that is less dependent on natural resource exploitation, a long-term plan that the Government wants to realise. 

It also does not create more jobs. It would probably have a negative impact on the environment. Especially important, with the current low global oil prices, selling crude oil abroad would not earn much profit.

The second measure is to boost credit growth. Some studies have suggested that as core inflation is still far below 2 percent, the Government has more room to increase money supply without causing high inflation. But this would send a wrong message to the market. 

Loosening monetary policies could trigger macro-economic instability in the future, particularly when bad debt is still a lingering obstacle.

Thirdly, the Government wants to increase the public investment. But this is not an easy assignment because of the budget deficit and high rate of public debt. So it is necessary to have specific plans and studies to choose which area/sector would be prioritised for public investment, given the limited State Budget capacity. More importantly, supervision of public investment projects must be strengthened. Otherwise, the money would be used inefficiently, deepening the budget deficit, causing more wastefulness, and hiking public debt further.

Clearly, short-term administrative interventions, if not carried out thoroughly, might be counter to long-term efforts of the Government to stabilise and restructure the macro-economy, and might end up diminishing stakeholders’ confidence in policy messages.   

Of course, there are some jobs that the Government is doing well to promote growth, like improving the investment environment, encouraging private investment, opening export markets based on free trade agreements.

But focussing too much on short-term targets and taking measures that are inconsistent with long-term goals can hurt market confidence and might make the economy suffer in the long run.

Economist Milton Friedman, who won a Nobel Prize in 1976, famously said: “One of the great mistakes is to judge policies and programmes by their intentions rather than their results.”

The Government should avoid this mistake by focusing on measures to stabilise the macro-economy and to be consistent with long-term goal of more sustainable, inclusive growth, rather than just on yearly GDP figures.

VEPR: High liquidity reduces pressure on interest rates

Contrary to 2016, credit growth expanded fast in the first half of 2017 while mobilised capital dropped, leading to a wide gap between the two sources. 

However, the slow disbursement of public investment helped increase the State Treasury’s deposits in commercial banks, reducing pressure on interest rates.

The assessment was made by Dr. Nguyen Duc Thanh, Director of the Vietnam Institute for Economic and Policy Research (VEPR) at a ceremony in Hanoi on July 10 to announce VEPR’s macro-economy report for the second quarter of 2017.

According to VEPR, by June 20, 2017, credit growth reached 7.54 percent compared to that in December last year, the highest figure recorded in the past six years. Particularly, credit saw the fastest growth pace in the second quarter, showing the Government’s determination to fulfill the set growth target.

Meanwhile, deposit growth slumped compared to the same period of 2016, reaching only 5.89 percent. However, interest rates in the interbank market still fell strongly in the second quarter. The overnight rate dropped 3.24 percentage points compared to the previous quarter to 1.47 percent averagely in June 2017, while the weekly interest rate also plummeted to 1.84 percent.

The State Treasury’s deposits in the banking system are considered a main reason behind the high liquidity in the market, according to VEPR.

The latest report of the National Committee on Financial Supervision showed that the State Treasury’s deposits in banks by the end of April reached 122 trillion VND (around 5.37 billion USD), a rise of 28.4 percent compared to the beginning of this year. This also reflected slow disbursement of public investment, said the report.

At the same time, deposit interest rates remained stable with only slight rises in some long-term deposits in big commercial banks, maintaining at 6.4-7.2 percent. Interest rates for middle-term and short-term were from 4.5-5.4 percent and 5.4-6.5 percent per year, respectively.

These conditions and the low inflation prompted the State Bank of Vietnam to cut prime interest rate by 0.25 percentage points and lower the ceiling lending interest rate by 0.5 percentage points. The move is expected to help interest rates drop further in the coming time, according to the report.

VEPR experts held that this is a proper decision that facilitates the development of businesses.

However, Dr. Nguyen Duc Thanh noted that the fast expansion of money supply led to a high M2/GDP ratio, standing at 146 percent, while the figures were 80 percent in 2006 and 114 percent in 2010.

He also warned of higher inflation in the coming time when the loosing currency policy affects the economy.

Can Tho looks to lure more investments from Japan

Japan is considered as a strategic partner of the Mekong Delta city of Can Tho, especially in high-tech agricultural and infrastructure development, a local official has said. 

At a meeting with Kyoshiro Ichikawa, Director of I.B.C Vietnam Co., Ltd and advisor to the Japan Desk Can Tho programme, Vice Chairman of the municipal People’s Committee Truong Quang Hoai Nam expressed his hope that Japan Desk, which targets Japanese firms operating in the locality, will continue supporting the city in introducing and promoting its strengths and fields that Can Tho is calling for investment in, thus attracting more and more Japanese investors. 

He suggested establishing an official representative office of Japan Desk in Can Tho in order to facilitate information updating and other support activities for Japanese firms, which have poured investment and are going to invest into the city.

For his part, Ichikawa said Japan Desk will actively assist Can Tho in luring investment projects from Japan and provide effective support for Japanese enterprises operating in the city in particular and the Mekong Delta region in general. 

In the second half of 2017 and 2018, Japan Desk will receive over 200 Japanese firms who come to survey investment opportunities in Can Tho, he said, adding that a part from introducing Can Tho’s investment climate, Japan Desk collects feedback from Japanese companies operating in the locality to submit to the local authority.

To boost connection with Japan, in 2015 Can Tho signed a cooperation deal with I.B.C Vietnam Co., Ltd to conduct investment promotion activities to help Japanese firms and individuals to survey and carry out investment projects in Can Tho and vice versa. Japan Desk Can Tho was set up early this year.

Can Tho is calling for investment in projects worth nearly 1 billion USD, such as building infrastructure in O Mon industrial park, Thoi Lai hi-tech zone, Con Son tourism site, Con Khuong amusement park, urban areas along Vo Van Kiet street, and Can Tho logistic service centre.

Can Tho is now home to 13 projects invested by Japanese firms with a total investment of 10.5 million USD.

TH Group targets 137,000 dairy cows by 2020

Vietnamese dairy producer TH Group aims to have 137,000 dairy cows by 2020 thanks to a 1.2 billion USD project to develop its cow herd and milk processing.

In the project’s initial stage, 45,000 cows were raised on an area of 8,100 hectares and created jobs for thousands of local labourers, said TH Group Chairwoman Thai Huong.

The group is planning to breed additional 30,000 cows in the central province of Thanh Hoa and 30,000 others in the Central Highlands province of Lam Dong.

Afitag pedometers, which serve two purposes- cow identification and activity measuring, are put on the cows. Milk extraction is automated in self-contained process to ensure high-quality milk. 

Along with strict disease prevention, TH Group’s farms also apply standout nutrition and health care for their cow herds.

According to Thai Huong, high technology is key to robust agriculture and application of cutting edged technology to cow farming has helped the group produce top quality milk.

The group’s cows are producing 8,000-9,000 litres of milk per period per year, highest in the Southeast Asia.

Prices of Luc Ngan lychees hit record high

The prices of Luc Ngan lychees have hit a record high over the last 64 years, said the Director of Bac Giang provincial Department of Industry and Trade, Mr. Tran Quang Tan.

The average price is US$1.8 (VND40,000) per kilo, which is much higher than last year of US$1.1 (VND25,000). It even reached US$3.6 (VND80,000) per kilo in the peak time.

According to the Department, by July 10, the province had sold nearly 81,000 tons of lychees to get US$1.4 billion. The total lychee output is expected to be 86,000 tons this year as the harvest season will end in the next four days.

This year, around 54,400 tons of lychees are consumed on the domestic market and the remaining volume has been exported to around 30 countries in the world, including two new markets of Thailand and the UAE.

China remains the key importer of Vietnam lychees with 24,721 tons.

Hanoi tax revenue up 18%

Hanoi collected over VND93.9 trillion (US$4.1 billion) in taxes during the first half of this year, completing 50.1 per cent of its annual target and 18 per cent higher compared with the same period in 2016, the municipal Tax Department reported on July 10.

Mai Son, deputy director general of the department, said inspections were conducted of over 8,155 companies in the capital city in the first six months, equivalent to 44.8 per cent of the target and up 79.6 per cent year-on-year. “The inspections aim to reduce unpaid tax and force businesses to comply with tax laws, thus avoiding losses for the State budget,” Son said.

A strong focus on debt collection by Hanoi’s Tax Department right from the beginning of the year has resulted in the recovery of VND6.4 trillion in arrears, Son said, adding that the tax department had become the country’s leading tax unit in debt collection.

Time and costs spent on completing taxation procedures have already been significantly reduced thanks to a series of measures promoting administrative reform, including the application of IT in tax management, he said.

As many as 98 per cent of businesses in the city used online tax filing procedures, and 95 per cent registered for e-tax payments, Son said. 

“The department’s tax collection goal set out for 2017 was estimated at VND205 trillion, which was relatively high, up 19 per cent over 2016, posing many challenges for the second half,” Son said.

In a bid to meet the target, the tax department will strengthen coordination with the municipal police to detect, prevent and promptly handle tax fraud or evasion, especially the sale or use of illegal tax invoices, he added.

Vice Chairman of Hanoi People’s Committee, Nguyen Doan, Toan said the municipal tax department should undertake dialogue with firms, listening to their difficulties and discussing solutions, thereby ensuring sustainable tax collection, Toan said.

Vietnamese trade mission to US signs major agreement

A business operating in Riverside County, California had been looking for ways to expand its fire helmet manufacturing business into the Asian market for quite some time, reported the US Valley News.

A recent visit by a Vietnamese trade mission to Riverside County gave the business, Phenix Technology, an unprecedented opportunity to do exactly that, the newspaper continued. 

The delegation from the Mekong Delta province of Can Tho, travelled to Riverside last month to sign a bilateral trade agreement with the county of Riverside and to have a business-to-business meeting with local entrepreneurs.

Angel Sanchez, Jr., the director of global operations for Phenix Technology, and other business representatives met with more than a dozen trade delegates and representatives of the Consulate General of Vietnam.

“Riverside County businesses have a lot to offer, and we’re thrilled this delegation recognized that fact,” Heidi Marshall, commissioner for the county of Riverside’s Office of Foreign Trade, said.

“We see this meeting and new agreement as the first steps in what we believe will be a mutually beneficial relationship for years to come.”

Riverside-based Phenix Technology now has a connection to a Vietnamese company interested in working with an American fire protection company. University of California Riverside believes the trip can lead to joint ventures between local researchers and Vietnamese businesses, and the consulate general is trying to entice Riverside County wineries to export to Vietnam.

“It was such an incredible opportunity,” Sanchez said of the business meeting with the delegation. “Having that type of warm introduction to a potential client is huge. It lends credibility to us.”

Sanchez hopes to make his new Can Tho contacts a client and to expand Phenix Technology’s business in Asia, where it already sells fire helmets in Thailand.

Using an interpreter who travelled with the Can Tho delegation, Sanchez shared information about his business with the trade delegate and is working to schedule a follow-up meeting.

Sanchez was one of several area business representatives who joined the delegation for a 4-hour meeting June 6 at the University of California Riverside Extension campus. There they learned about the city of 1.3 million, which is looking to find business associates for its technology and agriculture industries, among others.

Rosibel Ochoa, Ph.D., associate vice chancellor for University of California Riverside Office of Technology Partnerships, attended the meeting at the extension campus and said she believes there are multiple opportunities for collaboration in technology, agricultural research and entrepreneurship.

“We can help these companies connect with researchers,” Ochoa said, who expects the delegation to return to the university for a follow-up visit. “We can also show them how they can engage with the university if they want to sponsor research, license technology or if they want to do field testing of their products.”

The delegation also toured wineries in the Temecula area during the visit. Tran Minh Thang, chief of the Vietnam Trade Office at the Consulate General of Vietnam in San Francisco, said he thinks there are lots of opportunities for trade between Riverside County and Vietnam.

He, ultimately, would like to entice the wineries to export to Vietnam.

The business meeting followed a reception the previous evening at City Hall in Riverside, where Can Tho entered into a sister-city agreement in 2014.

Pham Van Hieu, chairman of the Can Tho City People’s Council, and Marshall with the county of Riverside signed a bilateral memorandum of understanding between their two governments at the reception.

Petrolimex plans to pay dividend this August     

The board of management of the Viet Nam National Petroleum Group (Petrolimex) has approved the expected date for last year’s dividend payout from August 24 to 31.

According to the group’s resolution at the annual shareholders meeting at the end of April, the shareholders approved dividend rate for 2016 at 32.24 per cent, equivalent to VND3,224 (14 US cents) per share.

Petrolimex listed on HCM City Stock Exchange (HoSE) on April 21 with stock code PLX.

Some 1.3 billion PLX shares were listed with floor price of VND43,200 per share. Right after the listing, Petrolimex sold 20 million treasury shares out of 155 million shares.

In 2016, Petrolimex earned after-tax profit of VND5.147 trillion.

With nearly 1.16 billion shares in circulation, Petrolimex will spend some VND3.736 trillion for paying shareholders’ dividend, equivalent to nearly 73 per cent of its total profit distributed to shareholders.

At the stock market, PLX share’s price has significantly increased to around VND69,000 per share, up 59 per cent after some three months of being listed.

7.52 million shares of HDBank auctioned

The Tân Thuận Industrial Park Company sold around 7.52 million shares of HDBank at an HCM Stock Exchange (HOSE) auction last week.

At VNĐ16,182 (70 US cents) per share, three organisations and 18 industries spent a total of VNĐ121.7 billion to buy these stocks, according to the HOSE.

Some auctions have been held previously to sell HDBank shares, including the Industrial Urban Development Company No 2 (D2D), with a divestment of 2.4 million shares from HDBank, the HCM City Housing Management and Trading Co with 700,000 shares and the Saigon Real Estate Corporation with 3 million shares. 

Tough to tax online vendors

Online shopping has grown popular among young buyers in major cities in Vietnam in recent years, helped by the rise of social media platforms like Facebook. But most online vendors do not pay taxes as tax authorities find it extremely hard to force them to comply with tax regulations.

The HCMC Tax Department has recently threatened to make public a long list of individuals and organizations that sell goods and services on Facebook but never pay taxes. The move is aimed at protecting the interests of those fully paying taxes and thereby guaranteeing fair competition.

The tax offices of the city’s 24 districts have informed online vendors of their obligations to file and pay taxes. Nonetheless, few have complied while the taxmen feel their hands tied because certain online vendors do not give truthful information.

The tax office of Binh Thanh District, for instance, has found more than 1,100 e-commerce pages on Facebook and websites having addresses in the district and invited the owners of 172 most active websites to come to the office to file and pay taxes. But only 98 of them have come, showing that they are complying with tax rules.

The owners of 677 Facebook pages and websites active in e-commerce have got notices from the Binh Thanh tax office but 548 of them have never shown up and 59 notices have been returned. Many vendors on Facebook who have come to the office reason they are small businesses with insignificant sales revenues and that they sell goods online as a second job, hence small revenues.

To evade paying taxes, some vendors have erased their addresses and only telephone numbers can be found on their pages, leaving no trail for looking for them. When there is an order placed, they will simply contact the buyer by phone to deliver goods to their customer’s door. And the most popular method of payment is cash on delivery, making it impossible for the taxman to track their transactions.

They use Grabbike service or self-employed people to deliver goods to their customers, instead of officially registered delivery service firms.

The HCMC Tax Department says it will conduct inspections into non-compliant online vendors to compel them to pay taxes, and even ask the Ministry of Information and Communications to close their pages. But it seems these measures are not enough to counter tax evasion by online vendors.

Cai Rang Floating Market vendors report annual sales of VND1 trillion

Cai Rang Floating Market in the Mekong Delta city of Can Tho has become a trading center in the delta, with annual sales amounting to over VND1 trillion (US$44 million), according to Vuong Cong Khanh, vice chairman of Cai Rang District.

Speaking at the opening ceremony of the Cai Rang Floating Market Festival 2017 last Friday, he said the market is located on the Can Tho River, a strategic waterway between the Hau River and Xa No Canal.

The floating market is visited by 200 to 250 vendors’ boats, even 300-400 at its peak, and 2,000 tons of agricultural products is traded a day.

He noted that at the market, domestic and international tourists can buy local specialties, and  the festival aims to promote the image of the Cai Rang Floating Market as a key tourism product of the city.

The three-day festival which ended on July 9 featured a wide range of activities like a composite boat race, a parade of tourist boats, and the making of a super-large “banh xeo” (crispy rice flour pancake), a specialty of southern Vietnam.

Le Van Tam, vice chairman of Can Tho City, asked local authorities to develop the market into a unique tourist destination, and make the festival an annual event.

VAMA members sell 134,200 autos in Jan-Jun

Auto sales reached more than 134,200 units in the first half of this year, unchanged from the year-ago period, the Vietnam Automobile Manufacturers Association (VAMA) said in a report.

VAMA members said more than 24,300 autos found buyers last month, a 5% month-on-month rise but a slight decrease from the year-earlier period.

Of the volume, there were more than 14,100 passenger cars, up 10% against May; over 9,100 commercial vehicles, up 1.5%; and nearly 1,050 special-purpose autos, down 20%.

Automakers delivered more than 17,200 domestically-assembled cars to customers last month, up 4% over the previous month. There were over 7,000 imported completely-built-up (CBU) autos sold, up 8% month-on-month.

Overall, over 134,200 autos were sold in the January-June period, down a mere 1% year-on-year. Sales of commercial and special-use vehicles edged down 9% and 18% respectively at around 47,400 and 7,500 units.

Meanwhile, passenger car sales increased 7% to nearly 79,400 units. This was a surprising result as consumers appeared to be waiting until early next year when car prices might fall as a result of a cut of import tax on automobiles manufactured in ASEAN from the current 30% to zero.

Especially, sales of domestically-assembled cars dropped 6% to over 96,700 units while CBU autos rose 15% to nearly 37,570 units.

Hoa Lam-Shangri-La encouraged to invest in more equipment

Hoa Lam-Shangri-La Healthcare LLC’s International Hi-Tech Healthcare Park and City International Hospital in particular should invest more in modern facilities to attract patients and thus reduce the number of patients going abroad for medical treatment, said HCMC chairman Nguyen Thanh Phong.

During his visit to the healthcare park in the city last week, Phong said many public hospitals in the city are grappling with overload and that Vietnamese patients spend about US$2 billion a year on medical examinations and treatments overseas.

Many public hospitals are overcrowded but the city does not sufficient budget to fund the construction of new hospitals. The city has been able to manage to fund a new children’s hospital.

Therefore, private sector investment is much needed to develop the healthcare sector.

Covering some 375,600 square meters, the International Hi-Tech Healthcare Park comprises six hospitals with 1,750 beds. A general hospital with 320 beds was put into operation in September 2013 while Hoa Lam People’s Hospital 115 specializing in cardiovascular, endocrinology, neurology, trauma and orthopedics with 367 beds is under construction and expected to be ready sometime this year. A tumor hospital is also being planned in the park.

Thailand seeks stronger cooperation with Mekong Delta

Thailand opened a weeklong trade and investment promotion event in Can Tho City on July 8 in a bid to prop up cooperation with Vietnamese enterprises, especially those in the Mekong Delta.

Ureerat Ratanaprukse, consul general of Thailand in HCMC, said that as of June this year, Thai firms had had 88 projects worth nearly US$400 million in the Mekong Delta. However, there is still room for more investment cooperation, especially in services, supporting industries and hi-tech agriculture.

Can Tho City has great potential for tourism and economic development, she said, adding the Thai Trade Centre in HCMC is working with Vietnam National Trade Fair and Advertising Company (Vinexad) and other partners to promote cooperation between the two countries.

And the ongoing Thailand Week in Can Tho City is one of their activities.

Pitinun Samanvorawong, minister counselor of the Thai Trade Centre at the Consulate General of Thailand in HCMC, said the event features 122 booths of 84 Thai companies showcasing agricultural machinery, food and beverages, healthcare products, home appliances, leather products, jewelry, education, tourism and catering services.

Nguyen Minh Toai, head of the Department of Industry and Trade of Can Tho City, said the city has five Thai-invested projects with total pledged investment capital of over US$41 million, mainly in seafood and farm produce processing.

Last year, the city imported US$4.3 million worth of goods from Thailand while its exports to Thailand amounted to US$36 million. In the first four months of this year, the city’s exports to Thailand totaled US$5.8 million while its imports were US$1.7 million.

The city mainly exports seafood, textiles, garments and medicines.

VNA/VNS/VOV/SGT/SGGP/TT/TN/Dantri/VNEVET