Inflation hits sales of timber furniture, goods
 
Many wooden furniture and handicraft companies have been cutting back production or seeking new markets to deal with slow sales caused by inflation.

Duong Ngoc Minh, deputy director of Thuong Nguyen Company in southern Binh Duong Province, which specialises in producing pottery products, said his company's sales in the first six months was only one-third of the figure for the same period last year.

His company cut back production because products were not selling in stores, Minh was quoted a saying in Dau Tu newspaper.

"The situation in the last six months of the year will not be better because inflation is still high and people will not spend much money for interior home decor products. The company may switch to other kinds of businesses," he said.

Mai Thanh Phung, who is responsible for the sales division of the Ho Nai Handicraft and Services Co-operative in southern Dong Nai Province, said the price of material inputs had increased by 30 per cent in the first six months of the year.

The price of the co-operative's products have only increased by a few per cent, but customers have had difficulty accepting it.

The co-operative's sales in the first six months of the year fell by 30 per cent against the same period last year.

With this situation, the co-operative would operate moderately for some time, Phung said.

Le Dang Giao, director of the Hoa Binh Company, which exports its wood furniture products to the US and EU, said his company's sales in the first six months of the year only reached 70 per cent of the company's target.

Giao said he hoped that sales in the last six months of the year would improve, as orders which his company received for the last six months of the year had increased by 20 per cent against the first six months of the year.

Tran Quoc Manh, deputy chairman of the HCM City Handicraft and Wood Industry Association (HAWA), said since the beginning of this year a large number of wooden furniture and handicraft companies had not earned a profit and had to cut production.

"Wooden furniture and handicraft companies are reaching peak difficulty. If the situation does not improve, many members of HAWA will switch to other kinds of businesses or stop operation," Manh said.

To support members, HAWA is searching for new markets, according to Manh. HAWA is now seeking more outlets in China, a large market for such goods.

Vietnam urged to fix false commercial practice  

Large quantity and low quality of commercials have pushed the government to tighten control on the media, but there’s yet to have a measure agreed upon.   

The Authority of Broadcasting and Electronic Information at the Ministry of Information and Communication has recently sent a statement to radio and television stations ordering “urgent checking of commercials on the stations involved Happy Shopping products.”

Any concerned commercials were asked to be punished under laws, the statement said.

The move came after the Ho Chi Minh City administration slapped a fine of about US$22,000 on local home shopping company Happy Shopping for selling smuggled and fake goods through television infomercials.

Many reports from the broadcasting stations have later revealed that the health authorities have certified many of the medical and cosmetic products of Happy Shopping, even the commercial content, thereby made them legal on the screen.

Luu Vu Hai, head of the authority, said that the problem is still under investigation, promising that the public will be informed of any official conclusion.

Hai promised that government agencies will clarify people responsible and impose strict penalties to clear all confusion from the public over the products.

Goods that Happy Shopping sold were advertised as high quality products, while they were, in fact, fake.

The firm has made use of television, the most common communications channel, to advertise its products, Nguyen Van Nam, former director of the Institute of Trade Research, earlier told Thanh Nien News.

Meanwhile, consumers with rising incomes, who want to use more luxurious and fashionable products, believe in the advertisements that are run on state-owned TV, Nam said.

Ngo Huy Toan, a senior inspector from the ministry, said that false commercials are mostly seen during the TV’s gold time between 6 p.m. and 9 p.m., especially those on medical centers that can cure all different kinds of diseases, functional foods disguised as drugs, and commercials that are not suitable to Vietnam’s traditions and culture.

A lot of the products have their functions and effects “overstated” and thus “affect consumers’ health and belief,” Toan said.

Each of such products would pop-up repeatedly during a program and throughout a month, making the viewers “suffocated”, he said.

The official said that advertisement regulations only allow a commercial to appear continuously in eight days, and reappear after some time.

“The current situation of commercials not only shows disrespect to media products but also to the viewers,” Toan said.

“It’s time [officials] should sit back and look into the issue seriously to fix it and bring it back on the right track,” he said.

As one of the fixing efforts, a draft of Advertisement Law has been proposed by the Ministry of Culture, Sports and Tourism.

But many opinions have said that the draft was not impractical and specific enough.

The drafting ministry only controls around 5 percent of advertisements in the country, which are on billboards and banners, while it is the Ministry of Information and Communication that controls the other 95 percent, which are on newspapers, magazines, broadcasting stations as well as post and communications measures.

Under the draft, a commercial is allowed to take no more than 7 percent of a day’s broadcast time on a television, which is more than one hour and a half on each of many channels.

Many people say that the time allowed is too big.

There are opinions that the law should set specific time limits for different categories of programs, in term of time.
 
Excess of rice export firms unnecessary, says association  

The presence of too many incompetent and inexperienced rice exporters is more of an obstruction for the export of rice, says Vietnam Food Association deputy chairman Pham Van Bay.

Although numbers of rice exporters have decreased this year compared to 2010 (284 in 2010), unfair competition and lack of storage and processing facilities still prevail.

As quoted by the General Directorate of Customs, during the first six months of this year, 211 rice exporters exported 3.9 million tons of rice. Of these, 50 exported over 10,000 tons and accounted for 90 percent of rice exports whereas 99 exported less than 100 tons of rice. There were also those companies that export only 200-300 tons.

Bay believes that once Decree 109 on rice exports is made effective, many export firms in the country will not be allowed to continue export of rice.

Under the decree, local rice exporters have to meet certain requirements before being allowed to export rice.

For instance, they must have storage facilities for at least 5,000 tons of rice and their rice milling plants must be able to process a minimum of 10 tons per hour. Exporters failing to send out shipments for 10 consecutive months will have their license revoked.

Bay said the new regulations would weed out many rice exporters who only want quick cash and are causing unfair competition by undercutting other exporters. However, it will also make it more difficult for many exporters, causing delays in rice exports and affecting rice prices in the domestic market.

The Ministry of Industry and Trade has sent its suggestions to the Ministry of Agriculture and Rural Development to consider changing some requirements in the decree to help rice exporters with more time to prepare for storage and meet orders.

According to VFA, a total of 80 rice export companies are sufficient to ensure and meet the rice export quota.
 
ADB agrees $4 mln grant to boost biomass use  

The Asian Development Bank (ADB) said Monday it has approved a project that would help Cambodia, Laos and Vietnam scale up the use of biomass waste in agriculture to meet growing need for clean energy and food security for poor rural households.   

It is a technical assistance project that will be funded by a US$4 million grant from the Nordic Development Fund along with counterpart financing of $600,000 from the governments of Cambodia, Laos and Vietnam.

“Promoting more efficient use of biomass can simultaneously address the goals of fighting climate change and improving the well-being of the rural poor, which are often seen as competing priorities,” Sununtar Setboonsarng, principal natural resources and agriculture economist in ADB’s Southeast Asia Department, said in an announcement Monday.

The bank said it would administer the grant and carry out the project in the three countries.

Biomass waste – such as rice husks and animal manure – is abundant in the countries but is not efficiently used as a source of clean energy or as fertilizer, according to ADB. In addition, the growing practice of large-scale crop production for biofuel poses a threat to food security by reducing food production and forest land.

ADB said the project would fund pilot investment projects to scale up biomass technologies such as household biogas systems, biochar kilns, and improved cooking stoves. The project will also conduct studies, build human and institutional capacity on biomass investment, and promote regional exchange among the three countries.

The project is due to begin in July 2011 and will be completed by December 2014, the bank said.

The Nordic Development Fund is the joint multilateral development institution of Denmark, Finland, Iceland, Norway, and Sweden, providing grant finance for climate change interventions in developing countries.
 
Vietnam economic zone draws $12 bil. investment  

An economic zone in the central region’s Ha Tinh Province has received nearly US$12 billion of investments from 103 businesses including foreigners since its establishment in 2006, a zone manager said Sunday.  

Several national major projects at the zone, which spreads nearly 23,000 hectares in Ky Anh District, has been finished and put into operation, including Vung Ang Petrol and Gas General Store, the North Central Liquidized Gas General Store, Vung Ang Port and several factories producing forestry products for export.

Ho Anh Tuan, chief manager at Vung Ang economic zone, said that the Vung Ang deep port can receive ships between five and 3.5 million tons.

Work at many other projects are being speed up, such as Vung Ang 1 thermo power plant worth US$1.56 billion, Son Duong Formosa Iron and Port Complex worth $7.9 billion, a project on five-star hotels and office buildings worth $78.6 million, Tau Voi tourism center worth $70 million and an industry-service complex worth $50 million.

Meanwhile, some projects are still pending investment permission. They include an oil refinery worth $12.47 billion with expected output of 16 million tons a year, a steel factory and the second phase of the thermo power plant.

Socio-economic plans must look at new census

In order to develop effective socio-economic plans at any level, officials need to consider the most recent population census, said Duong Quoc Trong, director of the General Office for Population and Family Planning in a press conference in Ha Noi yesterday.

The conference was held by the Ministry of Health and the United Nations Population Fund (UNFPA) to launch a campaign named "7 billion actions" with the motto "The World at 7 Billion: Counting on Each Other" to commemorate World Population Day on July 11. The world is expected to reach a new record of 7 billion inhabitants by the end of October.

Trong said that the authorities should have prepared for possible problems by making suitable plans beforehand, working off the information provided in the country's population census.

He cited the failure to consider population statistics as one reason why the country was not fully prepared for the high number of primary school students in 2009.

"We should have foreseen the overload 6 years earlier from the birth rate increase [in 2003]."

Similarly, he added that plans to meet future demands for contraceptives and the need for reproductive health care services could have already been addressed if the current number of young adult women had been taken into consideration earlier.

UNFPA experts agreed, saying that socio-economic policies at both national and local levels must pay closer attention to population studies and the issues they bring to light, especially the trend toward domestic female migration and the rapidly ageing population.

They also said that long term education plans of each locality need to make use of population projections to address problems before they occur, such as accommodating the number of children who want to attend school.

According to Mandeep Janeja, UNFPA's officer-in-charge, Viet Nam's population, currently at 87 million, will continue to grow by around 9 million people within the next 10 years, even though the birth rate has fallen slightly as of late.

The country, therefore, is faced with numerous challenges regarding gender equality, environmental protection and poverty while enjoying certain opportunities created by the growing population.

The most notable of these, as Janeja and Trong pointed out, was the advantage of having a large proportion of working age people in the population.

UNFPA are supporting Viet Nam to investigate the country's current population issues, which will inform socio-economic plans and policies.

Janeja said that the Ministry of Health and United Nations in Viet Nam are working together to develop plans for several activities within the next few months.

The highlight of these activities will be the release of a World Population Report, which offers an analysis of the challenges and opportunities created by the world's population growth to 7 billion people.

Plan to shut old factories making building-materials

HCM City's Department of Construction has targeted eliminating ineffective building-materials production establishments by 2020.

This is one of the main objectives of the city's VND 1.673 trillion building-materials development plan for the 2011-20 period.

To realise this goal, the city will close all establishments that produce clay bricks and roofing tiles with rudimentary methods.

The closure of building-material production establishments that use outdated technology, cause environmental pollution and have low economic efficiency is expected to be completed in 2015.

Another objective is to relocate all cement production factories outside of the city to areas that have proper planning.

Other building-materials production establishments that are now outside industrial parks will also be relocated to city industrial parks or to localities that have proper planning.

Also under the scheme, the city will become the country's large-scale centre specialising in transactions and exhibition of construction materials and products.

Food agency dispels rumor about harmful coloring

The coloring E102 is safe and can be used in noodles and other food, the Ministry of Health’s Vietnam Food Administration (VFA) assured in response to public concerns over the recent rumor that E102, used to dye noodles yellow, has dangerous effects on human health.

Nguyen Thanh Phong, VFA’s deputy head, told Tuoi Tre that E102 is allowed for instant noodles and other food in Vietnam and many other countries.

He said the European Food Authority’s report released in 2009 shows that there is no scientific evidence to prove that E102 is unsafe for human consumption.

E102 is not classified as a cancer-causing agent by the Association for International Cancer Research, Phong said.

VFA’s assurance has put many noodle producers at ease because the rumor has made consumers hesitate to buy instant noodles.

Public concerns over E102 was initially arose by a dispute between two noodle manufacturers Acecook Vietnam and Masan Food over the latter’s misleading ad last month.

In its ad, Masan Food’s Tien Vua instant noodle is shown and compared to another unnamed noodle.

While the soup in the Tien Vua bowl remains unchanged in color, the soup in the other bowl turns dark yellow, suggesting that it contains E102, which is harmful to human health.

Masan Food’s competitors said the ad would mislead viewers into thinking that any instant noodle brand other than Tien Vua is unsafe.

Some consumers say they are indeed persuaded by the ad and begin to switch from instant noodles to other types of instant food or noodles that claim to be E102-free while waiting for the official response from the Ministry of Health.

At present, E102 is used in nearly 90 percent of the instant noodle products available on the domestic market and its components are specified on products’ labels.

Instant noodle producers said the color of noodles depends on manufacturing technology, and such a coloring as E102 only serves to give instant noodles a more tasty yellow.

Consumers should take it easy because all noodle products available on the market have to pass the quality tests and meet the Vietnamese food safety and hygiene standards, said instant noodle producer Colusa – Miliket.

Vietnam plans first fuel pipeline

The Vietnam National Petroleum Corporation (Petrolimex) has announced its plan to build a 200 km-long pipeline to import oil products from China’s Guangxi to Quang Ninh province in Vietnam.

The pipeline, which will be the first of its kind, will connect PetroChina’s oil refineries in Guangxi with Petrolimex’s oil storage in the northern province of Quang Ninh.

The project, which will cost US$212 million, will deliver 3 to 3.5 million tons of fuel every day when it is completed in 2014.

The expense will be negotiated between Petrolimex and PetroChina.

Petrolimex is consulting the government before making a final decision.

Vietnam delays plan to stock rice

As rice prices are soaring, the Vietnam Food Association (VFA) finds it unnecessary now to buy rice from farmers to prevent prices from falling as it has planned.

Earlier, VFA planned to buy 1 million tons of rice from local farmers in order to keep rice prices at VND5,000 per kg to ensure profits for farmers.

But VFA on Monday said as current grain prices are much higher than prices of last year’s summer-autumn crops, the stocking plan can be postponed.

Nguyen Van Don, Director of Tien Giang-based Viet Hung Co. Ltd., said rice now fetches VND6,200 per kg on the market.

“Many rice exporters are suffering losses as their contracted prices for export are lower than the current domestic price,” Don said.

An official of VFA attributed the unexpected price hike to rice smuggling in the Mekong Delta.

He said some foreign firms have recently disguised as domestic traders to buy rice in An Giang and Dong Thap provinces to illegally transport it to other countries.

Japanese investors eye Vietnamese market

Vietnam ’s monetary policies and infrastructure for foreign- invested enterprises were major topics of a seminar between Vietnamese businesses and their counterparts from Japan ’s Aichi province in Hanoi on July 11.

The seminar, jointly held by the Foreign Investment Agency under the Ministry of Planning and Investment and the Aichi Support Desk, aimed to help the businesses exchange experience, seek trade partners and find solutions to difficulties in investment and business in Vietnam .

Do Nhat Hoang, Head of the Foreign Investment Agency, spoke highly of the quality of projects carried out by Japanese investors, including those from Aichi province.

He expressed hope that not only major corporations but also small and medium-sized enterprises, especially those operating in support industries, will come to Vietnam in the future.

Over 80 businesses from Aichi province, one of the largest economic and industrial centres in central Japan , have invested in Vietnam . Most enterprises have shown effective performance and several others have expanded their business across the country.

Tsujio Yoshifumi, an advisor with Japan International Cooperation Agency (JICA), said Japanese investors are desperately in need of the Vietnamese Government’s support to improve the road infrastructure system and address the shortage of labour.

The Aichi Support Desk was established in 2009 under a memorandum of understanding between the Vietnamese Ministry of Planning and Investment and Aichi’s provincial authorities. It is operating effectively in assisting the Aichi business community to obtain updated information about Vietnam ’s socio-economic situation and the country’s new policies regarding investment and business.

Vietnam, Mexico enhance agricultural cooperation

Vietnamese ambassador to Mexico Le Thanh Tung and Mexican Minister of Agriculture, Livestock, Rural Development, Fisheries and Food, Francisco Mayorga, have agreed to promote agricultural cooperation in the future.

At a recent meeting with the Ministry of Agriculture, Livestock, Rural Development, Fisheries and Food (Sagarpa), both sides have gave positive assessments of the advantages and potential for agricultural development towards signing an agreement for closer cooperation in this field.

Mr Tung said that Mexico can learn about rubber and coconut trees growing and processing technology from Vietnam while Mexico can help Vietnam with breeding seed fish. In addition, both sides can share experiences in shrimp breeding for export and producing agricultural machinery.

Minister Mayorga highlighted the importance of strengthening cooperative relations between Mexico and Southeast Asian nations, including Vietnam, affirming that his country hopes to carry out a number of specific agricultural projects with Vietnam in the future.

According to Sagarpa, since early this year, the value of Mexico’s farm exports value to Vietnam reached US$100 million with total two-way trade turnover of more than US$300 million.

Last year’s bilateral trade surpassed the US$950 million mark and the figure is expected to hit US$ 1 billion this year.

US$1.46 billion for Mong Duong 2 thermal power project

All credit contracts for the Mong Duong 2 Thermal Power Project have been signed, according to the project’s investor.

The Export-Import Bank of Korea (KEXIM) and the Korean Trade Insurance Corporation (KSURE) as well as 12 foreign commercial banks will provide credit guarantees worth more than US$1.46 billion out of the project’s total capital of US$1.95 billion.

Capital will be disbursed in August to get the 1,240MW project off the ground in Quang Ninh province.

Vietnam-Indonesia trade shoots up in first half

Bilateral trade turnover between Vietnam and Indonesia increased by 37.7 percent in the first half of the year to US$1.94 billion, said officials.

Statistics released by the Trade Mission of the Vietnamese Embassy and the Indonesia Chamber of Commerce and Industry, show that Vietnam’s exports reached US$948.45 million, representing a year-on-year rise of 50.55 percent.

The export of rice, vegetables, rubber, steel and iron and chemical products recorded the highest increases, while the export of vehicles and spare parts, coal and coffee decreased.

In the reviewed period, Vietnam imported US$998.78 million worth of goods from Indonesia, up 27.52 percent year on year, mainly completely-built automobiles, metals, pharmaceuticals, cattle feed and materials, and cottons.

According to the bureau, two-way trade between Vietnam is expected to reach US$3.5 billion in 2011.

Vietnam, Hungary promote agricultural cooperation

A forum on opportunities in agriculture, forestry and seafood trade and investment for Vietnamese and Hungarian businesses has taken place in Budapest, Hungary.

The event falls under the framework of a visit to Hungary by a Vietnamese delegation from the Ministry of Agriculture and Rural Development (MARD), led by Deputy Minister Diep Kinh Tan.

Speaking at the forum, Mr. Tan said in recent years, Vietnam’s agriculture output has accounted for a significant percentage of the country’s GDP and many of its agricultural products have occupied top positions for exports all over the world.

Pham Van Hung, head of the MARD finance department, gave a lecture on the development of Vietnam’s agriculture, forestry and seafood sectors as well as opportunities for trade and investment in agriculture. He also introduced some potential investment projects in Vietnam to the Hungarian.

Nagy Jozsef, a representative of the Budapest Chamber of Commerce and Industry, expressed his hope that agricultural cooperation between Vietnam and Hungary will continue developing.

Hungarian lecturers talked about potential cooperation between the two countries in poultry and cattle breeding.

After a question and answer session, businesses from both sides exchanged experiences and discussed plans for further cooperation in the future.    

Pepper export earns US$420 mln in H1 2011

Earnings from pepper export for the entire 2011 are estimated at around US$600 mln, US$180 mln higher than last year, according to Do Ha Nam, chairman of Vietnam Pepper Association.

Meanwhile, for the first six months of this year, the country exported 70,000 tons of pepper worth US$420 mln.

Pepper’s price is foreseen to remain high until early 2012 as the world’s demand is rising.

This opportunity also brings Vietnam some environmental challenges since farmers will more likely replace less economical plants with pepper. Deforestation for agricultural purposes will escalate as well.

60 percent of businesses to use e-customs by 2015

The General Department of Vietnam Customs will provide e-customs access for 60 percent of Vietnamese businesses by 2015.

It plans to collect 90-95 percent of fees online and reduce the time needed to check each container of goods to 3-5 minutes by using a scanner.

Customs surveillance at key border gates and transport routes will be conducted via cameras and positioning satellites.

To achieve the Government’s set targets Vietnam Customs is gradually improving the available e-customs system and enhancing the security level of data registered online using digital signatures.

It has also issued regulations for collecting, analyzing and processing data.

Petrolimex to invest over US$4 billion in oil refinery

The Vietnam National Petroleum Corporation (Petrolimex) plans to invest between US$4.4-4.8 billion in building an oil refinery complex in the central province of Khanh Hoa.

Sitting on an area of 305 ha in the Van Phong Economic Zone, the complex is capable of processing 10 tonnes of material per year.

It is expected go on stream by the end of 2013 when it will supply a range of products, including LPG, high-octane unleaded gasoline, kerosene, diesel, polypropylene, and benzene.

Vung Ang EZ attracts nearly US$12 billion

Since its establishment five years ago, the Vung Ang Economic Zone (EZ) has attracted 103 businesses, including 24 foreign investors with a total registered capital of nearly US$12 billion.

The EZ covers nearly 23,000ha in nine communes of Ky Anh district with its Vung Ang-Son Duong Deep-water Port, capable of receiving 5-35,000- tonne ships by far.

Key national projects in the zone have got off the ground and paid off well, such as Vung Ang Oil Storage Depot, North-central Liquid Gas Storage Depot, Vung Ang Port, and export forest products processing factories.

Many other projects are under construction, including the US$1.56 billion Vung Ang 1 Thermal Power Plant with a design capacity of 1,200MW, an iron and steel complex and Son Duong Formosa Port by the Taiwanese Formosa Group with an initial capitalisation of US$1.79 billion, a five-star hotel and office buildings worth US$78 million, the Tau Voi tourist site worth US$70 million and the Vung Ang complex of industry, services and urban area worth US$50 million.

In addition, some big projects are applying for investment licences, such as the US$12.470- billion oil refinery plant with a capacity of 16 million tonnes per year, the steel refinery with a capacity of 2 million tonnes per year, and the Vung Ang 2 Thermal Power Plant.

Vietnam Airlines plans to buy Airbus A380

The Ministry of Transport has submitted an amended plan to the Government about how to develop Vietnam Airlines.

In the report, the ministry said that it supported the national carrier's plan to invest in new technology in order to improve service and strengthen competitiveness.

Regarding plans to buy Airbus A380 aircraft, the world's largest passenger plane to date, the ministry said that Vietnam Airlines might clearly analyze and study Vietnamese airport infrastructure.

The carrier also needed to study the market to form an effective investment and marketing plan, the ministry said.

The airline would have to submit a detailed investment capital and debt payment plan, the ministry added.

Vietnam Airlines plans to expand its fleet to 115 and 170 aircraft by 2015 and 2020 respectively.

This year, the carrier expects to carry more than 14 million passengers and 193,000 tonnes of cargo, representing 20 percent and 16 percent increases, respectively in comparison with last year.

In 2011, the corporation hopes to reach a revenue of VND45.5 trillion (US$2.2 billion), a year-on-year increase of 28 percent.

Tax office probes transfer price deceptions
 
Transfer pricing has become popular among foreign-invested companies as well as local businesses, a city trade official has said.

The transfer price is the price that is assumed to have been charged by one part of a company for products and services it provides to another part of the same company, in order to calculate each division's profit and loss separately.

It refers to the setting, analysis, documentation and adjustment of charges made between related parties for goods, services, or use of property.

Transfer prices among components of an enterprise may be used to reflect allocation of resources among such components, or for other purposes.

Le Thi Thu Huong, deputy director of the HCM City Taxation Department, said in an interview with Tuoi Tre (Youth) newspaper that domestic business owners often establish two to three companies at the same time and adjust up or down a company's revenue to evade paying taxable income.

She said some local companies have founded several affiliates to give the impression that their business is making high profits.

When one of the affiliates listed on the stock exchange, the others would contribute profits to the listed one to earn the latter a high business performance and push stock prices up to deceive investors, she added.

Huong said that another deceptive transfer pricing which firms often employ was to focus profit on a later-established company enjoying preferential taxes. This was done to reduce the amount of taxes to be paid.

Last year, HCM City Taxation Department inspected 827 businesses, retrieving VND754 billion (US$37.7 million) and fining VND246 billion ($12.3 million) for violations of this kind.

The inspection was conducted on businesses involved in construction, insurance, banking, schools, loss-making companies and firms in co-ordinated transactions showing signs of transfer pricing.

For instance, the department inspected 197 loss-making companies, which helped mark down the losses to VND2.67 trillion (US$133.5 million) and retrieve and fine VND273 billion ($13.7 million).

Among 15 of these companies showing signs of transfer pricing, the department chose four to conduct inspections.

Huong said although the inspection had uncovered several domestic companies showing signs of transfer pricing, the department found it difficult to track down violations since it was not easy to confirm selling prices between these businesses and others in co-ordinated transactions.

She said there was currently no basis for local tax agencies to calculate taxes for those businesses showing signs of transfer pricing, nor were there any legal regulations on co-ordinated transaction and independent prices.

She added that it was difficult to identify prices for several forms of business that have different categories, such as steel and iron with more than 50 categories.

The department has only been able to identify prices of 17 kinds of goods, and readjust their prices and taxes, while leaving unhandled other goods with unidentified prices.

Vu Thi Mai, deputy minister of finance, said tax agencies planned to focus inspection on those businesses suspected of transfer pricing over the 2011-15 period.

It will also raise public awareness of taxpayers so they can understand that fines will be imposed for failure to voluntarily pay taxes.

She said the inspections have so far paid off, as several businesses reporting losses for several consecutive years have made a profit.

She said the ministry would concentrate on reviewing revenue sources and fighting tax evasion, particularly among foreign-invested firms suspicious of transfer pricing.