Customs enhances supports for enterprises
|A customs office in Da Nang. The General Department of Customs encourages businesses to implement electronic tax payment and customs clearance 24/7. — Photo tapchitaichinh.vn|
The General Department of Customs will promote further administrative reforms relating to tax and customs to help import/export businesses during and after the COVID-19 pandemic.
This is one of the tasks outlined in the General Department of Customs’ Decision 1616/QD-TCHQ issued last week.
It will implement solutions to remove obstacles faced by organisations and individuals implementing customs procedures.
The department will prohibit its customs offices causing difficulties for organisations and individuals during implementation of procedures, leading delays clearing goods, reported the Hai quan (Customs) newspaper.
Customs will also comply with the Ministry of Finance's regulations regarding certificates of origin for imported goods during the pandemic. Of which, it shall inspect import declarations from January 23, 2020 to provide special preferential rates based on the origin certificates for eligible enterprises.
Customs departments of provinces sharing borders with China, Laos and Cambodia must coordinate with forces at border gates to maintain customs clearance for import and export goods, avoiding goods being delayed at border gates.
In addition, the department will also improve efficiency in information technology (IT) to support declarations and tax payments while exchanging information with ministries and sectors to ease procedures, especially development of the national single window mechanism.
They include application of digital signatures for electronic documents issuance and implementation of online public services 24/7.
It will also promote cooperation with the State Treasury, tax offices and commercial banks to create favourable conditions encouraging businesses to implement electronic tax payment and customs clearance 24/7.
Customs will deploy the single window and automated aviation customs supervision system at international airports nationwide.
It will also continue simplifying procedures and the clearance process to reduce paperwork and the time for implementing customs clearance.
Reviews will also take place to cut fees, charges and taxes relating to imported and exported goods.
According to the General Department of Customs, in the first half of June 2020, Viet Nam’s trade value increased by 3.3 per cent compared to the second half of May to US$20.57 billion.
Total export value reached $10.37 billion, down 5.3 per cent compared to the second half of May 2020.
Those products with strong reduction in export value included phones and accessories (down 15.7 per cent to $300 million); rice (down 52.5 per cent to $114 million); machinery, equipment, tools and spare parts (down 8.6 per cent to $83 million); and computers, electronic products and components (down 3.3 per cent to $62 million).
From the beginning of this year until June 15, the national total trade value was $217.36 billion, down 2.3 per cent over the same period in 2019. Viet Nam’s trade surplus during this period was $3.75 billion.
Hai Duong exports first lychees to Japan
Hai Duong Province exported the first batches of its lychees to Japanon Wednesday, according to the Plant Protection Department under the Ministry of Agriculture and Rural Development.
Nguyen Khac Tien, director of Ameii Joint Stock Company, told Ha Noi Moi (New Ha Noi) newspaper that the company exported two tonnes of lychees by air to Japan.
The province has about 9,800ha hectares of lychee plants. Of which, the two largest growing regions are Thanh Ha District (3,600ha) and Chi Linh City (3,900ha) with an estimated total output at 43,000 tonnes.
Hai Duong estimates it will export half of its total lychee output this year, mainly to China. The rest will be consumed in the domestic market.
According to Nguyen Quy Duong, deputy director of Plant Protection Department, on June 20, Bac Giang exported its first batches of lychees to Japan.
More than two tonnes of Bac Giang’s Luc Ngan lychees were mostly sold after only a few hours being offered at supermarkets in Tokyo and Osaka, Japan on the first day on June 21, chinhphu.vn reported.
The selling price of fresh lychees in Japan is between VND180,000 (US$8) and VND270,000 ($12) per kilo.
SeABank allowed to increase charter capital
The State Bank of Viet Nam (SBV) has permitted Southeast Asia Joint Stock Commercial Bank (SeABank) to raise its charter capital to VND12 trillion (US$518.6 million) from VND9.3 trillion ($401.9 million).
SeABank will be able to issue shares to its existing shareholders and pay a dividend following the plan approved at its annual general meeting of shareholders.
The bank maintained charter capital of VND4.4 trillion from 2013-17. In 2018, it increased to VND7.68 trillion after issuing more than 222 million shares. Last year, SeABank completed charter capital increase to VND9.3 trillion through a share offering.
The bank will also pay a 14 per cent stock dividend, equivalent to issuing 131.1 million shares. In addition, SeABank will offer nearly 141 million shares to existing shareholders at a rate of 15 per cent with a price of VND10,000 per share.
SeABank will invest VND80 billion for fixed assets investment and VND1.78 trillion for corporate and individual customers. The rest will be invested in low-risk bonds such as credit institution bonds and Government bonds.
Shareholders also approved the listing of SeABank shares on HoSE. This is the third consecutive year this bank has put its shares on the listed stock market.
The bank hopes to increase credit balance by 13.6 per cent, equivalent to nearly VND14 trillion.
Total assets are expected to increase by 12 per cent to VND175.6 trillion. The bank targets a pre-tax profit of VND1.5 trillion, up 8 per cent against last year. The non-performing loan (NPL) ratio is targeted to be controlled below 3 per cent.
US initiates anti-subsidy investigation into Vietnamese tyres
The US Department of Commerce has officially launched an anti-subsidy investigation into a number of automobile tyre products which originate from Vietnam, according to a statement issued by the Ministry of Industry and Trade.
The data from last year released by customs operating within the United States indicates that Vietnam exported tyre products worth approximately US$525 million to the US market.
The initiation of the investigation comes after the US received a petition for anti-dumping investigation on May 13 on Vietnamese tyre imports.
In total, the investigation into the case is anticipated to last for 12 months and has the option of being extended for an additional six months.
Throughout the investigation, the US Department of Commerce may choose to issue preliminary conclusions, as well as applying anti-dumping and temporary anti-subsidy measures.
After receiving information regarding the petition, the Ministry of Industry and Trade (MoIT) moved to deploy activities aimed at supporting enterprises by exchanging and consulting alongside relevant Vietnamese agencies and export businesses, in addition to the US side, as a means of clarifying the contents of the petition.
In addition, the ministry has been closely co-ordinating efforts with relevant ministries in a bid to report the incident to the Prime Minister whilst also proposing plans to handle the case in order to protect the legitimate rights and interests of Vietnamese firms.
In an effort to respond effectively to the case, the MoIT has recommended that relevant Vietnamese exporters should be active in stepping up comprehensive co-operation with the US Department of Commerce throughout the investigation process.
The MoIT will therefore closely co-ordinate with Vietnamese relevant agencies in a bid assist them in providing all necessary information to the Department of Commerce for assessment before they issue their conclusions on the investigation.
Nikkei: EU is keen for Vietnam to restart flights as EVFTA takes effect
Japanese news publication Nikkei Asian Review released an article detailing the EU’s desire for Vietnam to resume international flights once the European Union - Vietnam Free Trade Agreement (EVFTA) comes into force.
The article attributes the resumption of flights to the fact that the country is virtually free of the novel coronavirus (COVID-19) and represents a strong investment destination for those seeking to diverse supply chains.
Nicolas Audier, chairman of the European Chamber of Commerce in Vietnam (Eurocham), also called on Hanoi to authorise and issue visas to allow foreigners to enter the country when he spoke with Nikkei Asian Review in Ho Chi Minh City recently.
At present, foreigners are permitted to leave the country and are allowed to take commercial planes which are made up of passengers keen to return to Europe. But standard Europe-to-Vietnam flights are not expected to be authorised until 2021.
The Vietnam National Assembly in Hanoi recently granted their approval to the free trade deal with the EU, making Vietnam the second Southeast Asian nation endorse such a treaty with the European bloc after Singapore, with the EVFTA set to come into effect as early as August.
"EU companies will consider Vietnam as an investment target, now more than ever because of the EVFTA," Giorgio Aliberti, EU Ambassador to Vietnam told Nikkei in another interview given in Hanoi soon after the free trade agreement was approved.
The agreement comes amid increasing trade tensions between the United States and China. Once the deal takes effect, 71% of Vietnamese exports to the EU will become duty-free, as will 65% of shipments going the other way. Moreover, Hanoi will move to phase out up to 99% of the remaining tariffs over the course of 10 years, while Brussels will do likewise over a seven-year period.
The impact of the COVID-19 will serve as one of many factors to push people to diversify as they try to not place too much focus on China, Ambassador Aliberti said, adding that although it remains a challenge, the EVFTA is also an opportunity for the country to create a positive business environment that can attract additional foreign investment.
Nikkei also gives quotes from the Eurocham’s Chairman as saying that many companies will begin to export goods to the US through another country, with Vietnam representing one of the best places to invest in.
He pointed out that all air routes connecting the Vietnam with EU states ceased operations on April 1 as the COVID-19 spread globally, serving to damage European economies in the process.
The EU trade official emphasised that European firms have been able to organise work via videoconferences with Vietnamese partners, although many business experts and investors are keen to come to the nation physically for a few days, as they had done previously.
The EuroCham representative cited both the EVFTA and the EU - Vietnam Investment Protection Agreement, which also won approval on June 8, and said the country is considered a gateway into Southeast Asia for European enterprises.
According to Nikkei, Vietnam has become one of the most highly sought-after destination for international flights in Asia due to an anticipated economic recovery following the COVID-19. Businesses in the region are also working to diversify supply chains which rely heavily on China, due to tensions with the US posing risks to their operations.
With plenty of calls from the Republic of Korea, Japan, Thailand, and Australia to resume flights to the nation, this could pave the way for a gradual expansion of trade and tourism.
Despite this, Vietnam remains cautious about fully reopening airports to foreign cities as the country braces itself for a possible second wave of the pandemic.
US initiates investigation into Vietnamese tyre
The US Department of Commerce (DOC) has announced an investigation into alleged dumping of tyre imports from South Korea, Taiwan, Thailand and Viet Nam, according to the Ministry of Industry and Trade (MoIT).
The DOC said it was also initiating a countervailing duty (CVD) investigation of imports of passenger vehicle and light truck (PVLT) tyres from Viet Nam.
The investigation was initiated following an application filed in May and lodged by the United Steelworkers (USW) representing workers at US tyre plants.
The department said the alleged dumping margins range from 106 to 217.5 per cent for Thailand, 43 to 195 per cent for South Korea, 21 to 116 per cent for Taiwan, and 5 to 22 per cent for Viet Nam.
The MoIT’s Trade Remedies Authority of Viet Nam (TRAV) said it has worked with ministries and businesses to provide the US with the most accurate information on development policies of the rubber industry, production costs and selling prices of tyre producers.
Last year, the US imported tyres worth US$4 billion from the four countries and territories. Of which, export turnover from Viet Nam was $500 million. Tyre exports to the US increased by 20 per cent in comparison with those of 2017.
TRAV said trade-restrictive measures, notably anti-dumping and anti-subsidies, have increased rapidly recently. In the first half of this year, the ministry dealt with 176 trade defence cases applied by foreign countries to goods exported from Viet Nam.
It has sent warnings to localities and businesses to be cautious in their exports, especially when there was a surge in turnover.
The ministry asked the Vietnamese exporters to provide information to the US and answering questionnaires timely.
The investigations were expected to be carried out within 12 months and could extend another six months. During the investigation, the DOC may make preliminary conclusions and apply provisional anti-dumping and countervailing measures.
Most recently, the US Department of Commerce (DOC) initiated an anti-dumping and countervailing duty investigation on Chinese plywood products imported from Viet Nam on June 17.
Export turnover of this product to the US was about $300 million last year.
Dong Nai gets ready to welcome FDI moving out of coronavirus-hit China
The southern province of Dong Nai plans to build industrial parks and expand existing ones to be ready for the shift in foreign direct investment flows from China to Viet Nam because of the COVID-19 pandemic, which has hit that country hard.
Thanks to Viet Nam’s efforts to combat the novel coronavirus pandemic, in the first 5 months of this year, Dong Nai attracted a total of US$612 million in FDI, according to its Statistics Office.
Nguyen Thi Cam Hong, deputy general director of the Dau Giay Industrial Zone Joint Stock Company, said some South Korean and Japanese investors came to survey the industrial zone last month.
To welcome new FDI inflows, the province plans to build industrial parks at Long Thanh, Cam My, Thong Nhat, Trang Bom, and Nhon Trach districts and Long Khanh Town, each between 200ha and 900ha in size.
It will also expand existing ones, which are all nearly full, such as Amata, An Phuoc, Long Duc, Tan Phu, Xuan Loc, Ho Nai, Song May, and Long Khanh.
Cao Tien Dung, chairman of the province People’s Committee, said he had proposed at a meeting with Prime Minister Nguyen Xuan Phuc last month that priority should be given to inter-regional infrastructure works, especially highways such as Ben Luc-Long Thanh, Dau Giay-Phan Thiet and Dau Giay-Lien Khuong and Ring Roads No 3 and 4 and logistics systems and ports.
So far 1,700 companies have invested in Dong Nai, including over 1,200 foreign ones from 43 countries and territories, who have brought in US$24 billion.
To attract investment in industry, Dong Nai has established contacts with localities and companies around the world.
Besides industrial parks, related services like logistics, construction, healthcare, and housing are also developing rapidly in Dong Nai.
Hoa Phat announces largest quarterly profit
Local steelmaker Hoa Phat Group announced its highest-ever quarterly profit in the second quarter of this year when after-tax profit hit VND2.7 trillion (US$115.6 million), up 32 per cent from the same period last year.
The group's chairman Tran Dinh Long told the company's shareholders at the Annual General Meeting of Shareholders in 2020 in Ha Noi on Thursday: “Despite social distancing, the profit in the second quarter is the highest quarterly profit in Hoa Phat's history.”
Long said the accumulated profit after-tax profit of the first six months reached VND5 trillion, up 29.5 per cent from the same period last year.
Long suggested paying a 20 per cent dividend made up of both cash and shares.
Tran Tuan Duong, general director of the company said through the sale of construction steel could not reach the annual goal, shareholders should not worry too much about.
"Though the total consumption of construction steel decreased by 5 per cent nationwide, sales in Hoa Phat increased by 10 per cent," he said.
"Hoa Phat accounted for between 30 per cent and 35 per cent in the northern market while its southern market shares doubled from last year," Duong added.
Duong said although the output of construction steel decreased in Viet Nam, the company’s export billets sharply increased and contributed greatly to the profit.
Chairman Long said: “While the local economy was affected by the COVID-19 but as a new industrial country, the Government was still focusing on public infrastructure and as a result, the steel industry was not influenced as seriously as other industries."
Long said the company was expecting to launch its first batch of commercial hot-rolled coil (HRC) in September and believed the products would bring lots of profit.
“While Hoa Phat could annually produce about 3 million tonnes of HRC with full capacity, Viet Nam consumes 11 million tonnes of HRC in 2019," Long said, adding, “the demand is much bigger than total supply so there is no difficulty in consumption of HRC."
Except for steel production, thanks to increasing prices of pork, the contribution of the agriculture segment of the company in the second quarter accounted for about 10-12 per cent of the company’s total profit.
On Thursday, Hoa Phat shares (HPG) grew 0.35 per cent to close at VND27,350 on the Ho Chi Minh Stock Exchange
Ba Ria-Vung Tau focuses on making its IPs competitive
Numerous suggestions for strengthening the competitiveness of industrial parks and developing model industrial parks in the southern province of Ba Ria-Vung Tau were discussed at a seminar held yesterday in the province.
Organised by the Ba Ria-Vung Tau Industrial Zones Authority (BIZA), the seminar, titled “Solutions to improve competitiveness of local industrial parks; developing model industrial parks”, was attended by hundreds of local authorities, experts and investors from the province and neighbouring areas.
They included executives, experts and representatives from the Korean Trade-Investment Promotion Agency (KOTRA), Thailand Board of Investment (BOI), Japan International Cooperation Agency (JICA), and The Japan External Trade Organisation (JETRO).
The seminar collected ideas from experts and investors for inputs for a draft political report to be submitted to the 7th meeting of the provincial Party Committee for 2020-25.
During the seminar, experts discussed a number of issues that require attention when building industrial zones. They also talked about experiences in building standard models of industrial zones and lessons from them and how to go about building standard models.
Foreign experts shared lessons in developing industrial parks from their countries.
A Ba Ria-Vung Tau representative delivered a report on infrastructure development and drawing investment in local industrial zones.
Model industrial parks to be developed
Improving the competitiveness of industrial parks and developing model industrial parks are indispensable trends that provinces and industrial park developers are following because sustainable development is what investors focus on when they begin a project.
Experts said it is now difficult to ensure long-term profits without ensuring environment, socials, governance/sustainable development goals (ESG/SDGs), the three central factors in measuring the sustainability and societal impact of an investment in a company or business because these help determine the future financial performance of companies including return and risk.
Seeing the trend, industrial park developers and Ba Ria-Vung Taus authorities are investing considerably to improve the quality of parks like adopting the Internet of Things and other advanced technologies and applications and generally upgrading infrastructure. They are also soliciting investments in their parks from sectors with high value-addition.
Akira Shimizu, chief representative of JICA Vietnam, said: “In September 2015 the United Nations General Assembly adopted the 2030 Agenda for Sustainable Development, which set the Sustainable Development Goals (SDGs), a collection of 17 global goals designed to be a “blueprint to achieve a better and more sustainable future for all.”
“Many international businesses put more awareness on SDGs, and convert their SDGs awareness into concrete business actions. More specifically, companies prioritise the SDGs based on their relevance to their countries and sectors of operation. Companies must strike a balance between business growth and societal and environmental impacts.”
Many Japanese businesses, as initiated by Keidanren (the Japan Business Federation), place great emphasis on ESG, which contributes to achieving the SDGs, thereby increase the companies values and create its positive image.
In other countries like South Korea, many model industrial zones have been set up including the Korean Free Economic Zone (KFEZ), Incheon Free Economic Zone (IFEZ), Busan-Jinhae Free Economic Zone (BJFEZ), Gwangyang Bay Free Economic Zone, Yellow Sea Free Economic Zone (YESFEZ), and East Coast Free Economic Zone (EFEZ).
In Viet Nam, a number of model industrial parks have been developed to attract foreign investors and provide them with the best investment environment.
“Viet Nams trend is also eco-industrial development, and relevant legislation is under development.” Shimizu said.
The trend is evident in Ba Ria-Vung Tau Province, a member of the Southern Key Economic Zone.
Thanks to the efforts of local authorities and investors, Ba Ria-Vung Tau is now among the provinces in the country with the most developed industrial parks.
Of its industrial parks, the Phu My 3 Specialised Industrial Park (SIP) is one of model industrial zones in the whole country.
Phu My 3 Specialised Industrial Park (Phu My 3 SIP), the only one of its kind in Viet Nam, was established under a Government decision in December 2014. It was built on an area of 999ha in Phuoc Hoa Ward, Phu My Town, Ba Ria-Vung Tau Province by the Thanh Binh Phu My JSC, a 100 per cent Vietnamese private company.
Phu My 3 SIP has world-class technical infrastructure and utilities designed and built by professional global contractors to meet the demands of a wide range of sectors like heavy industry, supporting industries, chemical and petrochemical industries, and multi-sectoral industry.
The park has been investing to complete the synchronised technical infrastructure, providing services of electricity, water, natural gas and industry, telecommunications information ... to the fence of customers' factories. This is a big difference compared to other industrial zones and is trusted and highly appreciated by investors.
Phu My 3 SIP provides comprehensive investment support services in multi languages via a one-stop service that assists customers with all affairs relating to investment procedures, legal issues, recruitment, logistics, and on-site customs services.
With a port inside and logistic services available, the park is an ideal destination for companies in all sectors ranging from heavy industry to chemicals and automobile to supporting industries as it helps them cut costs and enjoy comprehensive services.
The park has an excellent location with access to key traffic infrastructure such as National Highway 51, National Highway 1A, the HCM – Long Thanh Dau Giay Expressway, Bien Hoa – Vung Tau Expressway, the Trans – Asia Road, inter-regional highways, inter-port roads, and inter-industrial zone roads.
Nguyen Thi Thao Nhi, chairwoman of the Thanh Binh Phu My JSC, said her company is strengthening its relationship with international organisations like JETRO, JICA, HCM City Japanese Friendship Club (JCCH), Korea Trade-Investment Promotion Agency (KOTRA), Korean Chamber of Commerce (KOCHAM), American Chamber of Commerce (AMCHAM), and European Chamber of Commerce in Viet Nam (EUROCHAM), Thailand Board of Investment (BOI) to attract more foreign investors to Ba Ria-Vung Tau in general and to Phu My 3 SIP in particular.
Phu My 3 SIP recently attracted 20 projects, among that there are 3 Korean investors, 1 joint venture from Switzerland, 12 Japanese investors with a total capital of around VND22.5 trillion.
Her company has kept investing in infrastructure and amenities to offer tenants convenience.
For instance, it has offices for rent, a conference centre and a restaurant. In future, it plans to build an 18-hole golf course, sports centre and lodging to serve expats working and living in the park.
“Our goal is to develop a comprehensive modern industrial park that meets international standards and attracts investors from diverse sectors while ensuring sustainability and environment friendliness,” Nhi said.
The development of Phu My 3 SIP is clear proof that the development of industrial parks is an indispensable trend the province has to pursue to reach the goal of becoming an international logistics centre, ensuring sustainability and doubling its economy within 15 years.
HSC forecasts revenues and profits to rise
HCM City Securities Corporation (HSC) wants to increase its revenue and post-tax profit by 3 per cent and 5 per cent this year, reaching nearly VND1.3 trillion (US$56.2 million) and VND453 billion, respectively.
The targets were announced at the company’s 2019 Annual General Meeting of Shareholders held on Tuesday in HCM City.
“In the next five years, HSC will focus on two key segments of investment banking and asset management for individual clients,” said HSC General Director Trinh Hoai Giang.
Revenue from brokerage and lending segments are still expected to account for the largest proportion in HSC’s revenue structure this year, reaching VND480.6 billion and VND439.3 billion respectively, equivalent to 37 per cent and 34 per cent of total revenue, Giang said.
Revenue from margin lending in 2020 is forecast to fall by 11 per cent compared to 2019 while revenues from proprietary trading and financial consulting are expected to grow by 39 per cent and 24 per cent, respectively.
“These goals clearly show HSC’s efforts in developing towards an investment bank in the future,” Giang said.
HSC will focus on bond investment, especially corporate bonds, which are believed to be less risky than other financial assets, he said.
The company will promote M&A advisory activities due to increasing demand for mergers and acquisitions after the COVID-19 pandemic, he added.
HSC recorded a 26 per cent decrease in revenue last year compared to 2018, reaching VND1.26 trillion, only 76 per cent of the yearly goal. Post-tax profit touched VND432 billion, down 36 per cent compared to 2018 and reaching 64 per cent of the target.
At the meeting, the Board of Directors submitted to shareholders for approval the second dividend payment plan for 2019 with a rate of 7 per cent in cash with the expected payout time July 31 this year.
HSC paid dividends in cash for the first time for 2019 at a rate of 5 per cent in early January. Thus in both tranches, the company pays a dividend at a rate of 12 per cent for the year 2019, down 3 per cent compared to the 15 per cent plan approved by the 2019 General Meeting of Shareholders.
This year, HSC plans to pay a dividend at a rate of 12 per cent in cash.
HSC General Director Trinh Hoai Giang said this year, HSC would open a customer centre at its headquarters to develop an online account opening model.
Thailand plans to recover agriculture
Thailand is set to launch an agricultural rehabilitation scheme worth 310 billion baht (about 10 billion USD) in June to help 2 million people who lost jobs and returned to their hometowns.
Local media on June 25 quoted Deputy Prime Minister Somkid Jatusripitak as saying all projects related to economic rehabilitation must be implemented by July.
The state-owned Bank for Agriculture and Agricultural Cooperatives (BAAC) will offer 40 billion baht in loans with an interest rate of 0.01 percent to small- and medium-sized enterprises (SMEs) in the farming sector to create a supply chain.
The loans are expected to create 10,000-20,000SMEs, he said, adding that the Thai government plans to spare 22 billion baht to finance half of the investment for farming SMEs.
The farming rehabilitation scheme aims to increase the incomes of 300,000 farmers, training 200,000 new farm workers with technology and marketing knowledge in the sector, and supporting 16,000 farming communities and 7,255 agricultural cooperatives and institutions./.
Visa to support 10 million SMEs in Asia Pacific
Visa has recently announced a commitment to support 10 million small businesses across Asia Pacific, including Vietnam, in an effort to get local communities back to business in the wake of the COVID-19 pandemic.
The company has introduced a range of programmes and solutions to help small and medium enterprises (SMEs) drive efficiency and sales by accepting and making payments digitally to meet increased demand for cashless payments both online and in-store.
Visa has also formed the Visa Economic Empowerment Institute (VEEI) focused on economic and societal issues, including pandemic challenges that SMEs face and closing racial and gender opportunity gaps.
The 10 million pledge is part of a global programme that will see Visa supporting 50 million small businesses worldwide.
In Vietnam, to encourage consumers and small merchants to adopt digital payments in an easier and more convenient way, Visa has signed an MoU with NextPay to promote digital payment solutions via the Mobile Point-of-Sale (mPOS) with a goal of expanding to a community of 300,000 merchants by 2023.
Dang Tuyet Dung, Visa country manager for Vietnam and Laos, said: “At Visa, we are committed to advocating Visa’s global initiative to promote and strengthen the position of small businesses. By supporting local SMEs, which account for 98 percent of all enterprises in Vietnam and contribute approximately 40 percent of GDP, we are proud to be part of the worldwide effort to mitigate the impact of COVID-19, and spur continued economic growth at a time when communities need it most.”
In Asia Pacific, SMEs account for more than 90 percent of businesses and employ 50 percent of the workforce./.
Cambodia’s electricity demand down 20 pct this year
The Electricity Authority of Cambodia (EAC) has said Cambodia will not face the shortage of electricity during this dry season due to falling demand caused by COVID-19.
The Phnom Penh Post quoted CEO of the EAC Teng Sokomal as saying that there is no significant increase in electricity demand this year as the pandemic had caused some garment factories and hospitality industries to suspend operations.
He forecast that demand for electricity this year will decline by 20 percent, compared to an increase of around 30 percent last year.
Director General of the General Department of Energy Victor Jona said when demand is down, electricity imports from neighbouring countries will be reduced.
Thai central bank lowers economic outlook
The Bank of Thailand (BOT) has reduced its economic outlook to a contraction of 8.1 percent this year, deeper than the 1997 financial crisis, but kept the policy rate on hold at 0.5 percent, according to local media.
The latest economic forecast for 2020 is worse than the record contraction of 7.6 percent for the 1997 crisis, said Don Nakornthab, senior director for the economic and policy department, adding that a double-digit contraction is expected in the second quarter.
The central bank's Monetary Policy Committee (MPC) on June 24 voted to leave the benchmark rate unchanged, the Bangkok Post reported.
However, the central bank raised its forecast for 2021 economic growth to 5 percent from 3 percent projected three months ago.
MPC secretary Titanun Mallikamas said the deeper contraction is mainly the result of weaker external demand, especially tourism and exports. The BoT worsened the export contraction outlook to 10.3 percent from 8.8 percent previously forecast, while lowering foreign tourist arrival numbers from 15 million to 8 million this year.
"Under the central bank's scenario, we expect the Thai economy hit bottom in the second quarter. But the 8.1% contraction projection for the full year does not take into account a second-wave outbreak," the quoted Titanun as saying.
He said the MPC believes economic activities will gradually recover in the second half this year in countries that can effectively contain the outbreak, including Thailand. The contraction rate is expected to narrow in the third and fourth quarters.
The economy needs additional supply-side policies to support the changing economic structure and patterns of business operations consistent with the post-COVID-19 environment, said Titanun.
Households need help with their financial burden to overcome the crisis, he said, while the labour structure needs improvement to support an economic recovery after the pandemic.
The central bank also lowered its forecast for headline inflation to -1.7 percent in 2020 from -1 percent predicted in March, but expects a return to positive 0.9 percent next year./.
Lao Gov’t proposes lowering economic growth target
The Lao Government has suggested the National Assembly revise down economic growth target this year due to the impacts of COVID-19.
Speaking at the eighth NA’s ninth session that opened on June 24, Lao PM Thongloun Sisoulith proposed lowering gross domestic product (GDP) growth from 6.5 percent to 3.3-3.6 percent, and cutting revenue collection and expenditure targets, from 28,997 billion kip (over 3 billion USD) to 22,725 billion kip and from 35,693 billion kip to 33,043 billion kip, respectively.
With regard to expenditure, the government proposed a 30 percent cut in the administration budget for central level bodies and a 10 percent cut for local bodies. The government also suggested postponing payment of the state investment budget by at least 50 percent of the total investment value.
The PM also believed that the government could meet the GDP growth target of 3.3-3.6 percent.
He also introduced measures which the government plans to put into action over the next six months.
Vietnam effectively promoting talks on RCEP: expert
A Cambodia-based expert has highly valued Vietnam’s efforts to promote negotiations on the Regional Comprehensive Economic Partnership (RCEP).
Initiated by ASEAN in 2012, the RCEP is a free trade agreement among the ten member countries of the bloc and six partners – China, India, Japan, the Republic of Korea, Australia, and New Zealand.
Fifteen countries, excluding India, reached an agreement on the deal in November 2019.
In an interview with the Vietnam News Agency following the online 10th RCEP Intersessional Ministerial Meeting chaired by Vietnamese Minister of Industry and Trade Tran Tuan Anh on June 23, Chheang Vannarith, President of the Phnom Penh-based Asian Vision Institute, said during its ASEAN Chairmanship this year, Vietnam has been effectively coordinating and promoting negotiations so as to reach consensus and finalise the talks although India opted out of the deal at the last minute.
He held that as the regional economy has been seriously devastated by the COVID-19 pandemic, it is necessary to have a mechanism for more intensive regional integration to swiftly recover economies via promoting trade and investment.
The RCEP will be a useful tool to bolster trade and investment in the region, according to Vannarith.
Stressing the importance of this agreement in the post-COVID-19 period, he said the RCEP will help member countries take part in the reform of global supply chains once the pandemic is brought under control.
The finalisation of the RCEP talks will also send out a clear message that Asian economies do not accept unilateralism or trade protectionism, he added.
At the online meeting on June 23, trade ministers of the 15 countries re-affirmed that the RCEP will be signed by the end of this year, in November, but they still let the agreement open for India to return.
Boosting communications and enhancing the public’s trust in the deal’s sustainability is of critical importance at present, the expert said, noting that existing barriers to the RCEP signing now are related to political issues.
He suggested leaders of the member economies give thorough explanations of the benefits as well as challenges generated by this agreement to their people.
The persuasion of people is the decisive factor to the success of the RCEP, Vannarith said.
Once signed, the RCEP will create one of the largest economic blocs in the world as the 15 countries will account for an estimated 30 percent of the global population and nearly 30 percent of the world’s GDP.
Research urges ASEAN countries to adjust tax policies
The Vietnam Institute for Economic and Policy Research (VEPR), in coordination with Oxfam, Prakarsa, Tax and Fiscal Justice Asia (TAFJA) and Vietnam Tax Justice Alliance (VATJ), on June 25 announced research outcomes on the case of corporate tax incentives in the ASEAN towards sustainable tax policies in the ASEAN Region.
The research found that ASEAN member countries have recorded high and stable economic growth for many decades, but their revenue collection levels as a ratio to GDP remain very low in comparison to other regions. In 2018, the ASEAN average was 19.1 percent of GDP which is less than half of that of the Organization for Economic Cooperation and Development (OECD) countries. It is also lower than the average of Latin America and the Caribbean.
One of the reasons for this is the generous corporate tax incentives offered to investors that have eroded the domestic revenue base, according to the research.
Pham Van Long from the VEPR said if ASEAN member countries continue to use tax incentive as a tool to compete and attract FDI capital, it will drain revenues and affect investment in improving public services such as health care, education, infrastructure and governance.
He added that there is no evidence that tax incentives help increase the FDI inflows into ASEAN, and such incentives have even created an unfair playground for small and medium-sized enterprises.
The research said ASEAN member countries are engaged in a race to the bottom by offering huge incentives for investors. Over the past decade, the average corporate income tax rate in the region has dropped from 25.1 percent in 2010 to 21.7 percent in 2020.
“These tax incentives have helped big corporations to prosper at the expense of Asian people. This must come to an end. ASEAN must blacklist - draw a line - and say no to harmful tax incentives which drastically deplete much needed national revenues. If any incentives are to be allowed, they must only be meaningful investments that benefit the people, with no exceptions,” said Dr. Nguyen Duc Thanh, Chief Advisor at the VEPR.
Ah Maftuchan, Co-coordinator of Tax and Fiscal Justice Asia (TAFJA) urged ASEAN member states to collaborate and discard “beggar-thy-neighbor” tax policies, including “race-to-the-bottom” tax incentives that translate into lost revenues which have left poorer countries and people struggling to make ends meet.
The report makes three recommendations help the region increase national revenues. First, the ASEAN needs a whitelist and blacklist of tax incentives clarifying incentives that benefit equitable economic growth and that hinder such. Secondly, the ASEAN needs to agree on a common minimum tax standard to stop the race to the bottom. Finally, the ASEAN needs to agree on rules for the good governance of tax incentives.
Vietnam Grand Sale 2020 national promotion month to begin from July 1
A national promotion month entitled ‘Vietnam Grand Sale 2020’ will be held from July 1 to 31 by the Vietnam Trade Promotion Agency (Vietrade) under the Ministry of Industry and Trade in a bid to stimulate domestic consumption.
Vietrade Director Vu Ba Phu on June 25 that said the national promotion month will be organised at the same time on a national scale, combining traditional trade and e-commerce. It is expected to create a spillover effect and attract the participation of a large number of enterprises across various aspects.
During the month, participating enterprises can offer promotions of up to 100 percent instead of 50 percent as prescribed, Phu added.
Deputy Director of the Domestic Market Department under the Ministry of Industry and Trade Le Viet Nga expressed her hope that the promotional month will attract a large number of consumers, stimulate domestic consumption and promote retail sales in Vietnam./.
Deputy Finance Minister suggests speeding up public capital disbursement
There remains difficulties in the disbursement of public investment capital between now and the year-end due to COVID-19, said Deputy Finance Minister Tran Xuan Ha during a teleconference on June 25.
As of June 24, foreign capital disbursement surpassed 7.4 trillion VND (321 million USD), or 13.1 percent of the estimate.
Of the figure, over 2.8 trillion VND were disbursed by ministries and agencies and the remaining by localities.
Head of the Finance Ministry’s Department of Debt Management and External Finance Truong Hung Long said 10 localities have yet to disburse foreign loans this year, including Bac Giang, Hai Duong, Nam Dinh, Da Nang, Ninh Thuan, Binh Thuan, Binh Phuoc, Dong Nai and Tien Giang.
In Ho Chi Minh City alone, disbursement rate now stands at 4.13 percent.
Pham Thi Hong Ha, Director of the municipal Finance Department, said the city will disburse over 7.63 trillion VND in foreign loans this year, or 53.76 percent of the plan.
Deputy Minister Ha suggested that the Government and Prime Minister direct ministries, agencies and localities to work closely with relevant agencies to speed up public investment capital, including foreign and preferential loans.
Hanoi should become one of East Asian centres by 2045: PM
By 2045, when Vietnam becomes a developed country, Hanoi must have developed into one of the political, economic and cultural centres in East Asia, according to Prime Minister Nguyen Xuan Phuc.
He made the remark on June 27 while addressing the “Hanoi 2020 – Investment & Development Cooperation” conference that aimed to promote post-COVID-19 economic recovery and development in the capital city.
Opening the event, Secretary of the municipal Party Committee Vuong Dinh Hue said the conference looked to press on with administrative reforms and stronger improvement of the local business climate and competitiveness so that Hanoi can achieve as high as possible socio-economic results, with its gross regional domestic product growth 1.3 times faster than the whole country’s gross domestic product expansion, and the budget revenue target of 285 trillion VND (nearly 12.3 billion USD) this year.
In his speech, PM Phuc said Hanoi authorities have actively dialogued with and created optimal conditions for all economic sectors to develop, noting that thanks to their dynamism, the city has attracted a number of foreign-invested and large-scaled projects.
With its new stature, Hanoi now should not merely be the political, economic and cultural centre of Vietnam but one of the centres in Southeast Asia, and by 2045, among such hubs in East Asia, he said, adding that the target for Hanoi at present is no longer to compete with other Vietnamese localities but with other cities in the region like Bangkok, Jakarta, Shanghai, and Manila.
To do so, the PM noted, Hanoi needs to have good institutional quality and capitalise on existing special mechanisms for it, especially the National Assembly’s recent resolution on piloting some specific financial and budgetary mechanisms and policies for the capital.
The city should also make full use of opportunities and be more proactive to seek new development models and engage in global value chains. Besides, it needs to maximise the geo-political and economic advantages of Vietnam and the Capital Region, while cooperating with other localities and consider them partners for common development as each of them has specific advantages, according to PM Phuc.
The Government leader noted that Hanoi needs to have its own “strategic shareholders, good businesses, rich people, talented people”, especially sci-tech companies and high-quality human resources.
He also asked the city to create a competitive and institutionally efficient and effective economy and become a liveable capital city.
Local per capita income has approximated 5,500 USD each year, and if the average annual growth rate of 9 percent is sustained, Hanoi will be able to become a high-income locality by 2030, 15 years ahead of the similar target for Vietnam, the PM added.
At the conference, Chairman of the municipal People’s Committee Nguyen Duc Chung announced 282 projects worth 483.1 trillion VND that his city is inviting investment to. Authorities also presented investment certificates to 229 projects worth 405.57 trillion VND.