Vietnam is under growing pressure to stabilize the macro-economy without the presence of new engine for growth, while the driving force from the FDI sector is fading, stated a representative of the National Center for Socio-economic Information and Forecast (NCIF).

One of the key measures proposed by economists to stimulate economic growth in the remaining months of 2018 and subsequent years is the restructuring of state-run enterprises (SOEs), the Cong Thuong newspaper, run by the Ministry of Industry and Trade, cited experts as saying. 

The restructuring of SOEs is considered a priority to stimulate economic growth, according to Nguyen Mai, chairman of the Vietnam Association of Foreign Invested Enterprises (VAFIE). 

According to Mai, SOEs utilize large amount of capital and resources but remain the least efficient among economic groups. Moreover, the government's target of divestment and equitization of SOEs is lagging behind schedule, Mai added. 

Pham Sy Thanh, director of the China Economic Research Program of the Vietnam Institute for Economic and Policy Research (VEPR), informed that among 1,000 largest corporate tax payers in Vietnam in 2017, the state sector accounted for 27.7%, while those of the private and FDI sectors were 34.1% and 36.7%, respectively. 

In the first six months of 2018, equitization schemes of eight SOEs were approved with a total value of VND29.37 trillion (US$1.29 billion), making the target of equitizing at least 85 SOEs by the end of this year a real challenge, according to the Ministry of Finance (MoF).

Under the equitization plan approved by Prime Minister Nguyen Xuan Phuc, at least 85 SOEs must complete the equitization process by the end of this year. 

Moreover, only five out of 181 state owned enterprises (SOEs) subject to divestment completed the process, bringing the total number of enterprises that had divested to 16 during the 2017 - 2018 period.

The progress is far behind expectation set in the list of SOEs marked for divestment during 2017 - 2020 under the PM's Decision No.1232, targeting the divestment in 135 SOEs in 2017 and 181 in 2018.  

Additionally, Vietnam would need to step up effort in improving the business and investment environments, creating favorable conditions for private enterprises, especially small and medium enterprises (SMEs). 

With regard to this matter, Vu Tien Loc, chairman of the Vietnam Chamber of Commerce and Industry (VCCI) said that 60% of SMEs have not had access to capital. 

This is especially true for start-ups, as the majority are run by young people and lack of capital. Therefore, supports from banks and credit institutions would be vital for their developments, Loc continued. 

Vietnam's GDP growth is projected to reach 6.83% in 2018, higher than the target set by National Assembly of 6.7%, according to a report by NCIF under the Ministry of Planning and Investment. 

On breaking down, the agro-fishery-forestry sector is forecast to grow by 3.54%, industry and construction  7.89%, and service 7.36%. 

Additionally, NCIF expected the inflation rate to be in the range of 4 - 4.2%, higher than the National Assembly's target of below 4%. 

Notably, economic growth in the third quarter of 2018 is estimated at 6.72% and the fourth quarter of 6.56%, which is in line with previous projections of a weakening trend. 

Dang Duc Anh, head of NCIF's Analysis and Forecast Division, pointed to several reasons behind a decline in growth in the remaining months of 2018, including unfavorable global and Vietnam's economic situations. 

With regard to internal risks, Anh said Vietnam is under growing pressure to stabilize the macro-economy without the presence of new engine for growth, while the driving force from the FDI sector is fading.

Although Vietnam's manufacturing and processing sector is growing strongly, the sector remains at the lower end of the global value chain, in turn contributing modestly to economic growth. 

In terms of external risks, the strengthening of the US dollar, the US protectionist policies towards other countries, especially China and price volatility of essential goods such as petroleum and gas would have negative impacts on Vietnam's economic growth in the remaining months of 2018 and subsequent years, Anh continued. 
Vietnam's consumer confidence level slides in Q2 2018: Nielsen

"The consumer confidence level in Vietnam remains on par with that of the second quarter last year, well above the global average and the neutral threshold," observed Nielsen Vietnam`s representative.

Vietnam's consumer confidence remained stable in the second quarter of 2018 with an index score of 120 percentage points (ppts), down four points compared to the previous quarter, according to Nielsen's latest survey.

The downtrend was due to decreased positivity about job prospects and perception of time to buy. This quarter, Vietnam inched down a spot to the fifth most confident country globally.

"The consumer confidence level in Vietnam remains on par with that of the second quarter last year, well above the global average and the neutral threshold. The country still remains its highest level for two years," said Nguyen Huong Quynh, managing director of Nielsen Vietnam.  

"The higher trend in sentiment observed in the last couple of quarters, coupled with the continued improvement in key economic indicators has led to the growth of some categories such as travelling, out-of-home activities and the latest technology. This likely impacted fast moving consumer goods (FMCG) sales in the second quarter, with overall growth of just 2.7%," Huong added.

Vietnamese continued to rank job security (46%, up 3 ppts against the previous quarter) and health (42%, up 1 ppt) as their top two key concerns, while 22% of the survey respondents indicated the nation's economic status (22%, down 1 ppt) and work-life-balance matter (22%, down 1 ppt) as the third most worrisome.

Despite the positive economic performance, recessionary sentiments among Vietnamese consumers continued to remain high as 48% of respondents said that the nation is still in recession time. 

However, nearly five in ten respondents were feeling positive that the country would be out of an economic recession in the next 12 months (46% compared to 38% in the first quarter of 2018). 

Vietnamese consumers also continued to feel upbeat on their personal state of finance with 76% perceiving that their state of personal finances to be either good or excellent in the next 12 months (down 1 ppt compared to the first quarter) but nearly half of respondents stated that it is not a good time to buy.  

Other key areas of concern were increasing utility bills (11%), parents' welfare and happiness (11%) and children education and/or welfare (8%).

"The Vietnamese economy performance has gained momentum during the last three quarters with GDP growing at around 6 to 7%, yet the top concerns for Vietnamese consumers remain with the stability of jobs and the economy. Many still believe that the country is still in recession and it is not a good time to spend, further highlighting that there are other societal matters that could waver their optimism towards a better life that they wish to lead", noted Quynh. 

"Despite the fact that none of the economic KPIs indicate that the country is in recession, consumers continue to believe that the current situation is not really positive and the future is yet to define. This sentiment could significantly influence consumers' spending and saving patterns," she added.

Globally, Southeast Asia consumers are leading the way when it comes to saving intentions, which remains unchanged over the past two years. In the second quarter, Filipinos are the world's most avid savers (71%) followed by Vietnamese (70%), Singaporeans (69%) and Indonesians (66%). The global average of consumers putting their spare cash into savings is 53% (up 1% compared to the previous quarter).  

However, after covering essential living expenses, Vietnamese consumers were eager to spend on big-ticket items as they wish to lead a better life. Nearly half of consumers were willing to spend on holidays (49%). And this desire gradually grew over the past year.

Besides vacations, 46% of Vietnamese consumers would like to spend their spare cash on new clothes and new technology products. In addition, 43% wanted to divert any spare cash towards out of home entertainment activities and 38% wanted to spend on home improvements/decoration. More noticeably, spending on medical insurant premiums keeps increasing with this intention gaining three points in this quarter (41%, up 3 ppts compared to the previous quarter). 

"Saving is Vietnamese' DNA. So, Vietnamese consumers still continue this practice for their and their children's future. With health and wellbeing becoming the top key priorities for our consumers, products and services that can adapt to a great demand in healthcare will earn their way to the top of the mind of Vietnamese people," Quynh explained. 

Vietnam encourages private enterprises’ long-term investment

Private businesses now contribute 43.22% to gross domestic product (GDP) and 39% of total social investment.

Prime Minister Nguyen Xuan Phuc has asked the Ministry of Industry and Trade to issue policies and mechanisms to encourage major private enterprises to make long-term investment and develop national brands that can compete at home and abroad.

The PM made the request at the first gathering of the National Steering Committee for economic restructuring and growth model, according to the Government Office. 

Private enterprises play an increasingly important role in achieving Vietnam's socio-economic goals, especially in the context of restructuring and regulating the scope of state-owned enterprises. The Communist Party of Vietnam aims to make the private sector an important driving force in the socialist-oriented market economy.
 
According to a report by the Department of Business Development under the Ministry of Planning and Investment, the private sector has contributed a great deal to Vietnam’s socio-economic development. Private businesses now contribute 43.22% to gross domestic product (GDP) and 39% of total social investment.

Over the past three decades, Vietnam's private sector has developed in both quantity and quality. This area has been actively contributing to solving the country's basic socio-economic problems, the report said.

However, the development of the private sector in Vietnam is still facing many barriers and has not fully developed its potential to truly act as an important driving force in the country’s economy, the report added.

It can be confirmed that by 2020, with vision for 2030 – 2035 and a growing role, the private sector will play a pivotal role in Vietnam’s economy. This will be directly influenced by changes in institutions and policies, and is the best place for Vietnam’s economy development, the report stressed.

According to the Government Office’s announcement, in the period of 2018 - 2020, the situation in the region and the world keeps being so complicated, directly affecting macroeconomic stability, structural objectives and renewing the growth model.

Therefore, PM Phuc asked the ministries, branches and localities to determine restructuring task of the economy, renew the growth model as the top priority in the administration to implement more effectively and create a breakthrough in raising the productivity, quality and competitiveness of the economy. Thus, it can ensure rapid and sustainable development.

It is necessary to pursue the principle of the socialist-oriented market, strictly deal with anti-corruption and negative group interests in the economic restructuring, and further improve Vietnam’s investment environment, the PM said.

He assigned Deputy Prime Minister Vuong Dinh Hue to direct activities of the Steering Committee to urge and remove obstacles to ministries, branches and localities in the implementation of economic restructuring. 

The PM requested the ministries, branches and localities to urgently and seriously implement the assigned tasks in order to ensure their effectiveness and timeliness. In particular, the State Bank of Vietnam must coordinate with ministries, branches and localities in issuing documents to handle related problems in the process of handling bad debts of credit institutions.

The Ministry of Agriculture and Rural Development promotes development renewal and enhances the efficiency of the state agro-forestry business in accordance with Vietnamese Politburo’s resolution. Besides, the ministry needs to develop secure food supply chain models, speed up processing industry.

The Ministry of Labor, Invalids and Social Affairs continues to study solutions to develop the labor market, assess the unemployment status, deal with the sacking of laborers aged more than 35 years, especially workers in industrial zones and processing zones, propose solutions, the PM said.

The ministries, branches and localities must take the initiative in reviewing, cutting down and simplifying administrative procedures and creating conditions for enterprises to cut costs. Moreover, it is necessary to issue sets of monitoring and evaluation norms for each scheme, strive to complete by October 15, 2018 and send it to the Ministry of Planning and Investment for summing up and reporting to the PM.
Boom in FDI benefits Vietnam but risks remain: HSBC

Continued FDI into and expansion of Vietnam`s manufacturing sector are key to reducing poverty and raising productivity, which paves the way for more inclusive growth.

Despite global trade tensions and the loss of many investment incentives, many ASEAN countries, including Vietnam, have seen a boom in foreign direct investment (FDI) of late, which is likely to persist and lift local industry, stated HSBC in its latest report.

ASEAN has seen a bounty of FDI in recent years, thanks in large part to the region's tremendous economic potential. The financial crisis in 2008-09 was a big catalyst to the region's FDI boom, as multinational companies searched for investment opportunities at faster-growing economies. 

Total FDI to ASEAN-6 (including Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam) has averaged nearly US$117 billion per year since 2010-approximately 3x more than its average from the previous decade (2000-2009 average: US$41 billion). Similarly, net FDI (inbound FDI - outbound direct investment) is averaging nearly US$50 billion a year since 2010, which is about 3.5x its average from the previous decade. 

HSBC forecast the post global financial crisis trend is likely to persist in the near to medium term, provided that ASEAN's growth outlook remains robust and the region's economic fundamentals remain sound. 

According to HSBC, structural issues like the rule of law, strength of institutions, demographics, and investment incentives all play a key part in attracting FDI to the region. Most countries have also seen significant improvements in their "Global Competitiveness Index (GCI)" rankings over the past decade.

The GCI measures a country's set of institutions, financial markets, infrastructure, education, health, and other factors that contribute to sustainable economic development. In particular, the Philippines, Vietnam, and Indonesia have seen the biggest improvements in recent years, which speaks to economic and political reforms that those countries have implemented, including: improving infrastructure, reducing corruption, easing investment restrictions, and better fiscal management, among others.

As manufacturing continues to be the backbone of foreign investments in Vietnam, approximately 63% of the country's FDI goes to the manufacturing sector and where exports from the foreign-invested sector are now more than double those of the domestic sector. 

Indeed, continued FDI into and expansion of Vietnam's manufacturing sector are key to reducing poverty and raising productivity, which paves the way for more inclusive growth. 

There are some risks to the current FDI climate. For one, continued trade tensions present a risk, at least to some countries, given the region's integration and sensitivity to global trade. 

Although it remains difficult to ascertain the implications until there is more clarity on the full scope of tariffs implemented, continued trade tension poses risks to certain ASEAN sectors, especially where companies ultimately decide to shift production to the US.

While it is also true that the region may benefit if companies decide to shift all factors of production to ASEAN to avoid China-specific tariffs. There is no unequivocal answer, but HSBC expected the risks may outweigh the benefits in the near term in terms of FDI, given the integrated nature of trade. 

Under this circumstance, Vietnam must find ways to remain competitive in the long-term, as the sustainability of investment incentives may be in question for countries with reduced fiscal space.

Moreover, most countries need to upgrade existing economic zones and build next-generation zones to better integrate regional value chains and to attract new targeted industries. 
Vietnam overspends US$257.45 million in 8 months

State budget revenues as of August 15 reached VND814.2 trillion (US$34.93 billion), equivalent to 61.7% of the year`s estimate.

Vietnam saw a budget deficit of VND6 trillion (US$257.45 billion) from the beginning of the year to August 15, an improvement from a deficit of VND35.9 trillion (US$1.54 billion) recorded 15 days earlier, according to the General Statistics Office (GSO).

Overall, state budget revenues as of August 15 reached VND814.2 trillion (US$34.93 billion), equivalent to 61.7% of the year's estimate.  

Of the total, collections from domestic taxes and fees in the period stood at VND649 trillion (US$27.84 billion) or 59% of the year's estimate, of which, the state sector contributed VND90.2 trillion (US$3.87 billion) or 54.2% of the year's plan, the FDI sector VND109.6 trillion (US$4.7 billion) (excluding crude oil) or 49.2%.

Revenue from trade jumped to VND125.2 trillion (US$5.37 billion) or 70% of the estimate, and that from crude oil exports totaled VND37.7 trillion (US$1.61 billion) or 105.1%.

Additionally, personal income tax contributed VND59.9 trillion (US$2.57 billion) to the state budget or 61.9% of the year's estimate, and land use rights VND74.4 trillion (US$3.19 billion) or 86.6%. 

Meanwhile, Vietnam's state budget expenditures as of August 15 totaled VND820.2 trillion (US$35.2 billion), equivalent to 53.8% of the year's plan. Of the total, regular spending reached VND573 trillion (US$24.59 billion) or 60.9%. Expenditure for development investment reached VND166.3 trillion (US$7.13 billion) or 41.6% and interest payment of VND71.9 trillion (US$3.08 billion) or 63.9%. 

This year is considered as an important transitional year, following the elimination of tariff barriers for  commodities imported from ASEAN countries, of which over 90% of the goods under the ASEAN trade agreement (ATIGA) will bear zero tariff. A large amount of tax reductions are applied to items with high tax revenues such as cars (from 30% to 0%), components and spare parts (from 5% and 20% to 0%), steel (5% to 0%), among others.

Vietnam's food delivery market heats up with new players

Vietnam’s US$33 billion food delivery market has remained appealing to investors with more new service providers deciding to jump on the bandwagon.

Malaysia-based ride-hailing firm Grab has recently launched GrabFood in Ho Chi Minh City, setting to break into the lucrative food delivery market in Vietnam. The company has 500 partners which are restaurants and food shops in the city.

Grab is no stranger to the food delivery market in Vietnam. In fact, many restaurants already use their ride-hailing app for deliveries. With GrabFood, however, the company hopes to expand their role by acting as the intermediary between restaurants and customers, giving Grab a distinct advantage over other, more established food delivery services in Vietnam.

Earlier, the market also saw a newcomer, Lala, which is invested by Ho Chi Minh City-based information technology and service provider Scommerce Group. Lala is considered a rising star in food delivery sector by industry insiders, having the advantage of hi-tech know-how from its parent firm. Lala connects its users directly with restaurants before its shippers from Ahamove, also a child of Scommerce Group, delivers food.

Currently, the local market has two best names – Delivery Now, and Vietnammm.com. Delivery Now is a product of Foody Corporation under Singapore-based internet firm Sea LTD, while Vietnammm.com is a subsidiary of Takeaway.com, one of the world’s largest online food ordering websites based in the Netherlands.

The market also has some other food delivery service providers, such as Eat.vn and Chonmon.vn invested by Hanoi-based tech firm VCCorp. While Chonmon.vn targets local customers, Eat.vn focuses on serving expats and foreign visitors to Vietnam.

Though there is no official figure about market share, a survey by Havas Riverorchid confirmed that Delivery Now is the first name consumers would think of when asked about food ordering service in Ho Chi Minh City.

The demand for ordering food online and getting deliveries at given addresses in the country’s large cities has increased rapidly. According to the Vietnam Retailers’ Association, only 30 percent of urbanites ordered food online in 2017 in Hanoi and Ho Chi Minh City, but the figure soared to 70 percent in the first six months of 2018. This means that the number of service users increased by 40 percent just within one year.

UK-based market research firm EuroMonitor International values the food delivery market in Vietnam at around US$33 million this year and at more than US$38 million in 2020. It also puts the annual growth rate of the market at 11 percent.

However there are fears that despite the strong growth of the local food delivery market, Vietnamese firms could be pushed out of the game, leaving the field exclusively for foreign investors.

According to industry insiders, if a fierce battle started around 4 years ago for the ride-hailing service in Vietnam, it is time now for a yet another battle in the food delivery market.

Vu Hoang Tam, co-founder and director of Lala, said that Delivery Now has already gained great popularity in the country and GrabFood poses a serious threat. Obviously, GrabFood is already equipped with an army of drivers, which makes it so easy for its delivery service.

Do Xuan Quang, deputy head of the Vietnam Logistics Business Association, said that the food delivery market is clearly a fertile ground for businesses but if Vietnamese firms do not prepare themselves for the race, they will repeat the failure of the logistics sector, allowing foreign companies to take over the market.

Vietnam resolves bad debts worth US$6.04 billion under parliament resolution

As of the end of June, Vietnam`s bad debts accounted for 2.09% of total outstanding loans, down from the rate of 2.46% recorded on December 31, 2016 and below the 3% target set by the National Assembly.

Since Resolution No.42 came into effect last August, which provides special pilot treatment of bad debts at credit institutions, bad debts worth VND138.29 trillion (US$6.04 billion) were resolved as of June 2018. 

Upon breaking down, non-performing loan (NPL) at Vietnam's credit institutions stood at VND70.23 trillion (US$3.03 trillion), accounting for 50.78% of total resolved bad debts, while debts recorded off the balance sheet stipulated in Resolution No.42 reached VND21.59 trillion (US$932.07 million) or 15.61%, and bad debts sold to Vietnam Asset Management Company (VAMC) via special bonds of VND46.46 trillion (US$2 billion) or 35.59%.

As of the end of June, Vietnam's bad debts accounted for 2.09% of total outstanding loans, down from the rate of 2.46% recorded on December 31, 2016 and below the 3% target set by the National Assembly. 

Despite initial positive results, the State Bank of Vietnam (SBV) identified shortcomings during the process of resolving bad debts. Among those issues, the lack of a specialized debt trading market has restricted the efficiency of measures tackling bad debts. 

Additionaly, there remain difficulties in implementing Article No.14 of the resolution, for example, which stipulates the return of collateral being exhibit in criminal cases, Article No.12 regulating order of payment upon liquidation of collateral, or Article.15 on assignment of collateral, among others. 

Moreover, credit institutions are unable to identify correctly which collateral is under dispute or put under temporary emergency measures, due to the lack of information. This resulted in different understanding of collateral between presiding agencies, causing difficulties in dealing with collateral under Resolution No.42.

As of June 30, charter capital of the banking system stood at VND519 trillion (US$22.4 billion), up 1.3% against the end of 2017 and 6.3% from the end of 2016. 

Additionally, the combined equity of the system reached VND720.43 trillion (US$31.1 billion), up 9.1% compared to the end of 2017 and 21.1% by the end of 2016.

Vietnam finance ministry drops proposal on tax investigation function

Under the draft proposal for the revised Law on Tax Administration, tax authorities will now have the responsibility to coordinate with other government agencies in investigating tax frauds.

Vice Minister of Finance Tran Xuan Ha has suggested not including the investigation function for tax authority in the draft proposal, VnExpress reported. 

The Ministry of Finance (MoF) needs to review the issue thoroughly, which will be implemented step by step, Ha said in a government meeting on August 27.

Previously, government agencies and experts voiced opinions against the MoF's proposal of adding tax investigation function in the revised Law on Tax Administration. 

In July, the MoF proposed that in case of tax law violation or tax evasion, heads of examination teams, heads of inspection teams, heads of sub-departments, and directors shall have the right to seal goods, warehouses, dossiers and documents, temporarily detain people and escort the offenders. 

Particularly, if the violation act is up to the level of criminal prosecution, tax authorities have the authorization to prosecute the case and the defendant, conducting investigation activities in accordance with the provisions of the Criminal Procedure Code and the Law on Organization of Criminal Investigation Bodies. 

However, as the proposal has now been scrapped, the draft law stipulates that tax investigator will transfer cases of violation to competent authorities for investigation when signs of criminal offense are detected. 

Under the draft law, tax authorities will have the responsibility to coordinate with other government agencies in investigating tax law violations. 

Additionally, the draft law also provides new regulations on reinvestigation when tax authorities infringe taxpayer's legitimate rights, or the investigation result does not reflect the seriousness of the case. 

With regard to tax compliance for enterprises having related party transactions, the draft law applies mechanism of simplified declaration to prevent transfer pricing, identifying value of related party transaction with low-risk taxpayers.  

The draft law also regulates obligation of taxpayers in providing information with regard to related party transactions and communication mechanism between Vietnam's and foreign tax authorities. 

In terms of tax administration in field of e-commerce, the draft law points to the necessity of establishing a database and applying new tax services, including declaring tax and paying tax online, while stipulating responsibilities of government agencies in related to e-commerce. 

The revised Law on Tax Administration is expected to be submitted to the National Assembly in the next semiannual session in October for review, aiming to be approved in the May session in 2019. 

Vietnam banknote-printing plant reports 6-month profit up 46%

The six-month figure is higher than the target set for the whole 2018 at VND54.24 billion (US$2.34 million) and slightly lower than that of 2017 at VND67.75 billion (US$2.92 million).

Vietnam's state-run National Banknote-Printing Plant reported a pre-tax profit in the first six months of 2018 at VND66.7 billion (US$2.88 million), up 46% year-on-year, the company's financial statement showed. 
 
The six-month figure is higher than the target for the whole year of 2018 at VND54.24 billion (US$2.34 million) and slightly lower than that of 2017 at VND67.75 billion (US$2.92 million). 

During the January - June period, the plant's revenue stood at VND997.5 billion (US$43.07 million), up 28% year-on-year. However, as cost of goods sold remained high at VND910.7 billion (US$39.32 million), the company's gross profit stood at VND86.8 billion (US$3.74 million). 

Income from financial activities in the first half of 2018 climbed 32% year-on-year to VND17.2 billion (US$742,549), while financial expense saw a sharp decline from VND15.3 billion (US$660,539) to VND8.7 billion (375,600) and administrative expense up 13% to VND29.17 billion (US$1.26 million). 

As of June, the plant's total assets reached VND2.34 trillion (US$101.02 million), up 3% compared to the beginning of the year. Inventory increased from VND531 billion (US$22.92 million) in early 2018 to VND997 billion (US$43.03 million) by the end of June. 

Additionally, the money maker's equity amounted to nearly VND1.96 trillion (US$84.6 million). 

Under the administration of the State Bank of Vietnam, the National Banknote-Printing Plant is tasked with printing and casting paper money and coins, producing gold bullion, gold souvenir items and valuable papers. 
Grab Vietnam expects to pay US$21.5-million tax in 2018

Grab Vietnam is currently subject to a tax rate of 5% over its revenue, which is applied to companies operating in the science and technology field.

Grab Vietnam is expected to pay nearly VND500 billion (US$21.5 million) in tax in 2018, VnExpress cited a reported of the company sent to the Ministry of Finance as saying.

In the first six months of 2018, Grab Vietnam paid over VND198 billion (US$8.51 million) in tax, four times higher than the figure recorded the same period of last year, and VND223.5 billion (US$9.61 million) in tax for the January - July period. 

The tax amount paid by the ride-hailing company in 2017 was reported at VND189 billion (US$8.13 million). 

According to statistics provided by Grab, its corporate income tax has been growing in recent years. Grab Vietnam is currently subject to a tax rate of 5% over its revenue, which is applied to companies operating in field of science and technology. 

Based on those data, Grab deemed recent accusations made against the company, which focused on fair competition, tax obligation, transfer pricing and tax evasion, groundless. 

Grab argued that tax obligation of passenger transportation services applying technology has to take into account that of Grab and its partners. Therefore, if only Grab is singled out to compare its tax payment with other transportation companies, there will be significant difference in terms of value. 

Moreover, as Grab does not own transportation vehicles, the company said it does not operate in the same way as other transportation businesses. 

Grab on March 26 confirmed its acquisition of Uber's South-east Asia operations for an undisclosed sum, raising concern over its alleged monopoly status in the region's ride-hailing market. 

The Ministry of Industry and Trade (MoIT) in May considered Grab's acquisition of Uber in Vietnam a violation of the Law on Competition, arguing its combined market share after the deal exceeds 50%. 

Based on that, the Vietnam Competition Authority under the MoIT is considering launching an investigation into the acquisition, while urging Grab to provide more evidences and calculate the exact combined market share. 

In July, taxi Associations from Hanoi, Ho Chi Minh City and Da Nang voiced their opinions against the extension of Decision No.24, which pilots the application of technology in managing and connecting electronic contract-based passenger transportation. 

Under the decision, Grab Taxi's services are allowed to operate in five cities and provinces, including Hanoi, Ho Chi Minh City, Khanh Hoa, Da Nang and Quang Ninh

According to the taxi associations, Grab arrived in Vietnam in 2014 with charter capital of VND20 billion (US$867,110), however, the company posted losses of VND938 billion (US$40.66 million) after two years implementing the pilot program. 

As of 2017, Grab's losses increased by VND788 billion (US$34.17 million), while nearly 50,000 drivers purchased or rented cars to become Grab's partners. 

In June, the MoT rejected Grab's proposal to expand its service network beyond the current five cities and provinces in the country. Before that, Grab had asked for permission to bring its service to a number of provinces and cities, including Ninh Thuan, Dong Thap and Gia Lai.

Vietnam spends US$592 million on car import in 8 months

Of the total number, cars with less than nine seats make up the largest proportion with 15,348 units worth US$324 million.

As of August 15, Vietnam imported 24,451 cars worth US$592 million, according to the General Department of Vietnam Customs (GDVC). 

Of the total number, cars with less than nine seats make up the largest proportion with 15,348 units worth US$324 million. The second place belongs to truck with 7,754 units at US$171 million. 

Last week, Vietnam imported 3,723 units worth US$89 million, while that of the previous week reached 1,287 unit totaling US$31.3 million. 

From August 10 to 16, the majority of imported cars were from Thailand with 2,965 units, followed by Indonesia with 497 units. Overall, cars from these two countries accounted for 93% of total imported cars to Vietnam during this period.

Imported cars with less than nine seats amounted to 1,858 units for US$39.5 million between August 10 and 16, making up 49.9% of Vietnam's imported cars in the period. Of that amount, Thailand was the largest supplier with 1,228 units (66%), followed by Indonesia with 428 and Germany with 85. 

Notably, no car with over 9 seats was imported to Vietnam over the last week. 

Nevertheless, trucks saw a sharp increase with 1,840 units with US$43 million, a significant increase from last week with 209 units. Of the number, 1,737 units were from Thailand, 69 from Indonesia, 30 from Belarus and 4 from China. 

Additionally, 25 specialized cars were imported in Vietnam last week with US$6.6 million. 

Customs statistics also showed that US$60.9 million worth of cars' accessories and parts were imported to Vietnam during the week, down 18% week-on-week.