Without invoices, businesses are left in the lurch

As the deadline for tax filing is fast approaching, many businesses in Ho Chi Minh City startle to find printing houses haven’t done printing their invoices.

Last May, in a move to simplify procedures, the government decided to shift the task of printing invoices from the Ministry of Finance to businesses themselves.

Three months later, the Ministry of Finance issued a guideline explaining how businesses could go about printing their own invoices or better yet, use electronic invoices.

Now, less than a week before all businesses must inform local tax authorities of their new invoice forms before filing for tax, many find out their printing houses are too overloaded with other businesses’ invoices to print their own.

An accountant at gasoline supplier Petrolimex Binh Thuan said he had only received 600 out of the 2,500 invoice books he ordered from Lien Son Printing House at the end of last year.

“I’ve traveled many times from Binh Thuan Province to Ho Chi Minh City to ask for my invoices,” he said. “I got only promises.”

Another accountant for an asphalt manufacturer who wanted to be known as T., told Tuoi Tre her company placed an order at Tai Chinh Printing House last December and Tai Chinh promised to deliver her invoices in January.

By now, however, Tai Chinh hasn’t delivered anything and can’t even say when it can. T. said she had gone to the local tax bureau asking to buy invoices but was told, “Sort it out with your printing house.”

Printing houses cite overload, a long Lunar New Year holiday, and a shortage of employees after the Lunar New Year as reasons why they are defaulting on invoice orders.

Some are taking advantage of the situation by charging high prices.

The HCMC Printing Association and two major printing houses, Lien Son and Nguyen Xuong Thinh, have asked the central Tax Authority as well as the municipal tax bureau to continue selling invoices to businesses in the second quarter of this year.

However, Le Thi Thu Huong, Vice Director of the HCMC Tax Bureau told Tuoi Tre she hadn’t heard any change of plan from the higher tax authority.

Huong said 6 months had passed since the finance ministry issued the guideline so businesses did have plenty of time to prepare.

A total 81 printing houses had registered with her bureau to handle the task so there wasn’t any reason why businesses should all flock to big printing houses that are already overloaded, she said.

Businesses grapple with inflation

Increasing input material prices and rising fuel costs and a foreign exchange rate adjustment have forced domestic businesses to lower their 2011 planned net incomes while struggling to maintain their existing market share.

At a meeting entitled: "Macroeconomic policies in 2011 and business solutions" held on Tuesday, business representatives expressed their concern that rising input expenses and production costs and the flooding of low-cost products from China would have an adverse effect.

In fact, many companies have lowered their planned earnings in comparison with previous years. Several enterprises have transferred their targets from profits to maintaining market share.

Representative from Rang Dong Light Source and Vacuum Flask Joint Stock Company Do Hai Trieu said the State should issue policies to support businesses producing high-productivity products. In the long-term, stricter regulations on technical barriers should be rolled out to prevent low-quality imports.

Pham Chi Lan, senior economist, said producers should review their production procedures and strategies and the market to make necessary adjustments, asserting that this was a long-term solution to help businesses overcome challenges.

She also said that manufacturers should also recognise general difficulties, and short- and long-term obstacles in order to restructure inside their businesses.

Le Xuan Nghia, deputy chairman of the National Financial Supervision Committee, said: "As the costs of input materials and fuel increased, the best way for businesses not to raise their finished product prices is to reduce output".

He also said that producers should also shorten payment periods and cut long-term orders in order to avoid risks from foreign exchange fluctuations, adding that businesses should pick easy and low-cost plans first, while using high technology to save energy and reducing overhead costs.

Deputy General Director of Casumina Le Van Tri agreed with Nghia, saying that his company was using its capital and limiting bank loans.

Nguyen Xuan Qua, general director of Bao Ngoc Bakery Company, said one of the optimal solutions was to pick the best time to import materials, saying that his company imported materials before the Lunar New Year, when input material prices were much cheaper than now.

Qua also revealed that his company now was focusing on best-selling products and expanding markets to rural areas while reducing production of low-selling products.

He also said relevant agencies should increase essential commodities following a road-map in order to avoid panicking consumers.

General director of Dai Dong Tien Plastics Company Trinh Chi Cuong said that businesses should reduce expenditure and design new low cost products to help consumers save money. If a business increased product prices but had not raised both quantity and quality, it would fail.

Enterprises should co-operate in order to overcome the challenges they face. Co-operation among businesses in supply chains, sectors and provinces is considered an urgent task.

Nghia said that co-operation among partners was an important way to help businesses guarantee their survival, while internal co-operation will create better opportunities for enterprises in the future.

However, he sounded a warning that businesses should avoid borrowing capital from banks due to high lending interest rates which, in turn, would add costs to finished products.

Ho Thi Kim Thoa, Deputy Minister of Industry and Trade said prices on both domestic and global markets had fluctuated in the first two months of the year.

Specifically, in January, the price of essential commodities saw an increase of 24.3 per cent and 4 per cent in the world market, compared with the same period last year and December 2010, respectively. In February, food prices experienced a rise of 34 per cent and 2.2 per cent in comparison with the same period last year and January.

Despite challenging situation, domestic production was still stable and well-supplied.

However, Viet Nam's trade deficit was still high, with 80 per cent reserved for imported materials and machinery, Thoa said.

In an effort to stabilise the economy, the Government issued Resolution 11 and the Ministry of Industry and Trade (MoIT) had rolled out an action plan to guide the implementation of the resolution for every business.

Vietnam, France boost maritime cooperation

Both sides have agreed to cooperate on researching marine environmental pollution, managing portside areas and supplying fishing boat monitoring equipment.

A working delegation of the Ministry of Natural Resources and the Environment led by its Deputy Minister Bui Cach Tuyen visited the western French city of Brest from March 15-17.

During the visit, the delegation worked with French research centres and businesses involved in supervising, managing and protecting the sea environment.

The French CLS Company specializing in satellite monitoring signed with the Ministry of Agriculture and Rural Development a contract worth 14 million Euros to provide fishing boat monitoring equipment.

Brest has also maintained close cooperation and carried out a number of projects with Vietnam in Hai Phong and Nha Trang.

Brest authorities said that Vietnam was France’s honorary guest at the Brest Maritime Festival in 2008 and hoped that Vietnam will return to join the 2012 Brest Maritime Festival and the following conference to be hosted by Brest in 2013.

Interest-free loans for firms not increasing prices

The HCM City People's Committee will provide interest-free loans worth VND660 billion (US$33 million) to companies taking part in the city’s programme to stabilize prices on essential goods throughout the year.

The city has encouraged more eligible companies, including those operating outside the city, to participate in the programme.

The decisions were made at a meeting held by the municipal People's Committee on March 16.

The programme will focus on three groups: food and foodstuff, domestically made medicine and school supplies.

The food and foodstuff group will include nine essential commodities: rice, sugar, cooking oil, red meat, poultry, eggs, fruit and vegetables, processed food and seafood.

The prices of commodities under the programme will be 10 percent lower than normal market prices.

Phu Yen joins with Japan in tuna processing

A joint venture between central coastal Phu Yen province and four Japanese companies will be set up in Phu Yen in the third quarter of the year to buy, process and preserve ocean tuna for export.

A framework agreement to this effect was signed in Phu Yen on March 17 by representatives of the People’s Committee and Planning and Investment Department of Phu Yen province and Director of Japan’s Rakuichi Broadband Solution Co, Ltd. Kensaku Matsumoto.

Under the agreement, four companies, namely Rakuichi Broadband Solution Co, Ltd., I-Point Co, Ltd., Sokurakuhonpo Co, Ltd., and At Work, will bring two refrigerated vessels to Vietnam to process and preserve ocean tuna, and provide food, petrol and necessities for fishermen at sea.

They will also transfer advanced fishing technology to Phu Yen fishermen, promote and export the joint venture’s products and build an ocean tuna trademark for Phu Yen province.

Phu Yen is the leading locality to develop the ocean tuna fishing industry, with a fleet of more than 690 vessels that can catch around 5,000 tonnes per year.

Three seafood corporations merged

The Ministry of Agriculture and Rural Development (MARD) on March 17 held a ceremony to mark the merger of three seafood corporations – Seaprodex Vietnam, Ha Long Seafood Corporation and East Sea Fisheries Corporation in Ho Chi Minh City.

The new corporation, called Vietnam Seafood Corporation (VSC), has a chartered capital of VND839 billion and is a wholly state-owned business.

Deputy Minister of MARD Diep Kinh Tan is VSC’s Chairman and Chairman-cum-General Director of the Central Region Company, Tran Tan Tam is appointed as the General Director of VSC.

Addressing the merger ceremony, MARD Minister Cao Duc Phat said the move aimed to establish a powerful state business to boost aquatic development in the country.

He also requested VSC promptly arrange jobs for workers from the three former seafood corporations, boost exports, apply further modern science and technology to seafood processing and manufacture, and support seafood development nationwide.

Nghe An to open two additional border gates to Laos

The central province of Nghe An is prepared to open two auxiliary border gates to Laos. 

The opening of the Thong Thu and Cao Veu border gates will provide favourable conditions for trade exchanges between Nghe An and the two Lao provinces of Hua Phan and Bolykhamsay and become import and export links between Vietnam’s northwestern region and other localities in Laos, Thailand and Myanmar.

The Nghe An provincial People’s Committee has asked its Department of Labour, Invalids and Social Affairs and Department of Education and Training to receive Lao pupils who want to study at local colleges and vocational training centres.

Vietnam attends Int’l Travel and Tourism Exhibition in Russia

The 18th Moscow International Travel and Tourism Exhibition (MITT) opened at the International Exhibitions and Conventions Moscow (Expocentre) in Russia on March 16.

The Head of the Vietnam National Administration of Tourism, Ms Ha Lan, said that Vietnam has 11 travel agencies involved in the event to promote its tourism potential to international friends and customers. The exhibition will last until March 19.

According to Vietnamese embassy’s officials in Moscow, more than 60,000 Russian tourists came to Vietnam last year and the figure is expected to increase considerably.

Those staying in Vietnam for 15 days needed no visa.

Vietnam, Laos cooperate in mineral exploitation

Vietnam and Laos on March 16 signed a contract to conduct a survey on gypsum in Vientiane, Laos.

The gypsum project will be implemented in Kham Muon province in an area of over 4.7 square kilometers with a large reserve of around 2.2 million of tonnes and investment capital of US$700,000.

This gypsum mine is located near highway No 13 which will make it easy for the survey and exploitation work.

Signatories were Deputy Minister of Planning and Investment Thongmy Phomvisay and Director of the Vietnam-Laos Mineral Cooperation Company, Le Dinh Tu.

Mr Tu thanked the Lao Government and the authorities of Kham Muon province for creating favourable conditions for the company.

Rice export price reduced for second time

The ceiling export price of Vietnamese rice will be reduced by US$20 per tonne from March 20 in line with a reduction in world prices caused by increased supplies.

The price cut was announced by the Viet Nam Food Association, which said the price would fall from $500 to $480 a tonne for 5 per cent broken rice and from $480 to $460 a tonne for 25 per cent broken rice.

This was the second reduction this month in the ceiling price of export rice: the first was on March 12 when the ceiling price fell by $10-20.

The association said the reduction would encourage the export of the winter-spring rice crop.

Agriculture and Rural Development Deputy Minister Diep Kinh Tan said the rice market would recover. Viet Nam had signed contracts with Malaysia and Indonesia to export rice over the coming months and exports of rice to the Philippines were expected to increase, he said.

From the beginning of this month, association enterprises had begun buying up to 1 million tonnes of rice to maintain price stability on the domestic market.

Viet Nam exported 1.1 million tonnes of rice in first two months of this year, earning $595 million. The exports surged by 55.6 per cent in volume and 44.5 per cent in value against the same period last year.

The association estimated the nation would export 6 million tonnes of rice this year, 750,000 tonnes less than last year. It planned to ship the largest volume (61.29 per cent) to Asian countries and 29 per cent to African countries.

Last year, Viet Nam exported 6.75 million tonnes of rice worth $3.23 billion, a record high export volume. In that year, the average export price increased by $22 per tonne to $511 for 5 per cent broken rice. For 25 per cent broken rice, the price was $491.

Interest-free loans for firms that don't raise prices

The municipal People's Committee will provide interest-free loans worth VND660 billion (US$33 million) to companies selected to take part in the city ‘s programme to stabilise prices on essential goods throughout the year.

The city has encouraged more eligible companies, including those operating outside the city, to participate in the programme, which also ensures adequate supplies during Tet (Lunar New Year) holiday.

The decisions were made at a meeting on Wednesday held by the municipal People's Committee.

The programme will focus on three groups: food and foodstuff, domestically made medicine and school supplies.

The food and foodstuff group will cover nine essential goods, including rice, sugar, cooking oil, red meat, poultry, eggs, fruit and vegetables, processed food and seafood.

The prices of commodities under the programme will be sold at 10 per cent lower than normal market prices.

The price-stabilisation programme for this year will begin in April and last until the end of the year and for the next Tet will be conducted from January 1, 2012 to March 31, 2012.

Price-stabilised commodities will have reserve stocks equal to 20-25 per cent of the city's consumption during this year in order to avoid any shortages or price fluctuations.

Banks up non-term rates for big savers

A number of commercial banks this week have begun offering non-term deposit interest rates as high as 9 per cent per year on large deposits.

The move has been viewed as a workaround to a new State Bank of Viet Nam regulation that has banned commercial banks from paying higher interest on term deposits when the depositor withdraws funds before maturity.

VietA Bank offers 3.6 per cent on standard non-term deposits, but now offers 6-8 per cent per year for deposits of VND20 million (US$952) to VND1 billion ($47,619). VP Bank, similarly, now offers 9 per cent interest on larger deposits, compared to a normal rate of just 3 per cent.

State Bank of Viet Nam Circular No 04/2011/TT-NHNN, which took effect last week, barred banks from paying high interest on term deposits which did not reach their full term. In other words, it mandated that depositors who withdrew funds early be penalised and receive the lower interest rate offered on non-term deposits.

Banks had encouraged the practice because the term deposits were considered "medium-term" funds under State Bank regulations and were not subject to current provisions limiting lending to no more than 30 per cent of "short-term" capital.

Commercial banks now seem determined to attract greater amounts of "short-term" capital by offering higher interest rates on larger deposits.

"I know for certain that many depositors have also been putting their capital in very short-term deposits, like one or two weeks, and then letting the deposits remain beyond the maturity date in order to enjoy the higher interest rates," said a top executive at a State-owned bank in Ha Noi who asked that her name be withheld.

"Several banks are being tricky trying to dodge central bank regulations," she said. "The central bank regulation, in principle, was designed to make capital sources at banks more stable and safe. If the market can do that, that's good. However, by such tricks, capital structure are going to become even more unstable and fragile."

An executive of a private HCM City-based bank, who also wished to remain anonymous, agreed that higher non-term deposit interest rate would raise capital input costs and narrow profit margins for banks.

A central bank report released yesterday showed that, during the past week, interest rates on term deposits in Vietnamese dong remained at around 13.5-14 per cent, while interest rates for term deposits in US dollars ranged at 4.2-6 per cent.

Market capitalisation to hit 70% of GDP

Capitalisation of domestic stock markets is expected to reach 70-100 per cent of gross domestic product (GDP) by 2020, says the deputy head of the fund management section of the State Securities Commission, Nguyen Thanh Long.

The figure has also been targeted in the commission's 2011-20 project for development of the nation's stock markets, recently submitted for approval by the Prime Minister, Long told reporters.

The markets have achieved significant growth in the past 10 years, and would reach growth objectives for the next decade by increasing market scale, improving volumes, restructuring market organisation, and updating market infrastructure, he said.

Enhancing governance capacity and completing the legal framework for the market were also necessary to achieve these objectives, he added. A disclosure regime was a top priority and would be based on the amount of an enterprise's equity and its number of shareholders.

During 2011-13, the commission would concentrate on amending the current Law on Securities with the aim of passing a second-generation Law on Securities Act in 2015 which would support more open market conditions, he said.

Institutional investors would provide a breakthrough for sustainable growth of the markets, Long added. "A system of investment funds including open-ended, closed-ended and exchange-traded funds will draw a lot of attention."

Thang Long Securities Co director Le Dinh Ngoc said that the first 10 years were an important, formative period for the markets.

"However,the legal framework is incomplete, while the appearance of the market has already changed a lot," Ngoc said.

Viet Nam Association for Business Securities general secretary Nguyen Thanh Ky concurred, saying that a lack of transparency remained the greatest obstacle to further market development.

"In the next 10 years, a proper Government orientation will help market develop more strongly," he said, adding that more open policies would encourage greater participation from business and financial institutions.

Taiwanese life insurer starts operations in Vietnam

Taiwan-invested Fubon Vietnam Life Insurance Co Thursday made its debut in Hanoi’s Ba Dinh District, marking the official operations in Vietnam market.

The firm, providing life insurance and health insurance services, will focus on the payback insurance products, progressive models and progressive education funds, said Lee Huei Yuan, the company's chairman.

Fubon Vietnam Life Insurance Co will utilize the successful experiences from its parent company from Taiwan in building the trade mark, training the professional human resource, providing high quality products, and expanding the distribution channel.

Besides its Vietnamese headquarter in the capital city, it will also establish a branch office in Ho Chi Minh City.

Taiwanese Fubon Life Insurance, founded in 1993 in Taipei, is the second biggest life insurer in Taiwan.

It announced that its application to establish a wholly-owned non- life insurance company in Vietnam has been approved and awarded a license of operation by the Ministry of Finance on July 01, 2008.

New realty trading company makes debut

Dat Xanh Real Estate Trading Service Corp (DXS), the merger of its 10 subsidiaries and 18 realty trading floors nationwide under the Dat Xanh Group has made debut in Ho Chi Minh City.

The subsidiaries and realty trading floors, focusing on marketing, distributing and building realty projects, have been established and developed in the last seven years.

They include Dat Xanh Hoan Cau Joint Stock Co (JSC), Dat Xanh Tay Nam JSC, Dat Xanh Tay Bac JSC, Dat Xanh Dong A JSC, Dat Xanh Binh Duong JSC, Dat Xanh My Phuoc JSC, Dat Xanh Dong Nai JSC, Dat Xanh Mien Bac JSC¸ Dat Xanh Mien Trung JSC¸ and Dat Xanh Mien Tay JSC.

The newly-established DXS, headquartering in HCMC's Binh Thanh District, will help streamline the group’s business strategies thoroughly its national network and boost brand positioning.