The total tax collection in the first five months of this year is estimated at nearly 673 trillion VND (28.8 million USD), equivalent to 57.3 percent of the projection for the whole year and a year-on-year increase of 16.5 percent, according to the General Department of Taxation.

Notably, the collection from the manufacturing and business sector, the biggest contributor to the domestic revenue, represents 54.7 percent of the estimate for the year, up 11.5 percent from the figure of the last year’s corresponding period.

The positive results were attributed to the fact that the economy in the first months of the year maintained a good growth rate, the COVID-19 pandemic was kept under control, while production and business activities were on the recovery. The strengthening of examination and inspection to prevent tax loss and evasion as well as efforts to reduce the tax debt rate also contributed to increasing the revenue for the State.

Banks await higher credit growth quota

Commercial banks are expecting to have higher credit growth limits in Q2 2022 as they have already used up most of their assigned quota this year.

Under the current regulations, the State Bank of Vietnam (SBV) sets credit growth limits for each commercial bank at the beginning of the year depending on the bank’s health, including capital adequacy ratio, financial strength, risk governance and operational status. This was done to control credit growth of the entire banking system and to ensure money supply and inflation control as targeted by the Government.

Chairman of Vietcombank Pham Quang Dung said Vietcombank’s credit growth reached 8.8 percent by April 29 while Vietcombank was granted a 10 percent credit growth quota.

At Military Bank (MB), CEO Luu Trung Thai also revealed that the bank has been assigned a credit growth target of 15 percent so he expected the quota to be further extended in the near future.

According to Bao Viet Securities (BVSC), MB has almost reached the assigned credit growth quota as the bank’s credit growth by the end of Q1 2022 reached 14.8 percent. MB therefore is waiting for a SBV’s approval of a higher credit quota.

Meanwhile, ACB's officials said they had applied to the SBV for an additional credit quota and hoped to have it to be approved by the end of June or at the beginning of July this year to have more room for lending.

Experts forecast credit growth in 2022 will be higher than last year when the economy begins to recover after the pandemic. Therefore, banks will also be granted higher credit quota to facilitate loan expansion.

Especially, they said, banks such as Vietcombank and MB, which participate in restructuring weak credit institutions according to the Government’s directions, will have the opportunity to get the highest credit quota.

BVSC forecast MB may be able to expand its credit growth room to 30-35 percent while the rise for Vietcombank will be 16 percent.

According to the SBV, credit growth of the entire banking system at the end of Q1 2022 reached 5.04 percent, 2.3 times higher than the same period last year.

Golden Gate Ventures assists startups in Vietnam

Golden Gate Ventures on May 30 signed a cooperation agreement with the National Innovation Centre (NIC), aiming at strengthening long-term relationship, and supporting the development of the startup and innovation ecosystem in Vietnam.

The agreement was inked within the framework of the workshop themed “Golden Startup Triangle in Southeast Asia: Vietnam - Singapore – Indonesia” organised by the NIC.

With this deal, Golden Gate Ventures will increase investment in the market, promote exchanges, develop new ideas and innovations, and act as a catalyst to support Vietnam’s startups in building a position in the region.

Currently, the investment fund has established representative offices in Singapore, Vietnam and Indonesia, affirming that this is the “Golden Triangle of Startups” in Southeast Asia.

Virtual workshop seeks ways to facilitate Vietnam's aquatic exports to RCEP markets

A virtual conference looking to bolster shipments of Vietnam’s aquatic products to member nations of the Regional Comprehensive Economic Partnership (RCEP) is being held on May 30 and 31.

VIETRADE Deputy Director Le Hoang Tai said Vietnam has exported aquatic products to more than 160 markets worldwide, of which shipments to the RCEP signatories account for 63 percent.

Nguyen Manh Dong from the Vietnam Trade Office in Japan said that Vietnam shipped aquatic products worth 1.33 billion USD to Japan last year, making up 74 percent of agro-forestry-aquatic product products to the East Asian market.

In the first five months of 2022, Vietnam’s aquatic exports raked in about 4.5 billion USD, posting a year-on-year surge of more than 44.5 percent.

Hanoi's five month export-import turnover skyrockets

Hanoi enjoyed a surge in exports-imports in the first five months of this year, signalling the capital city’s strong economic recovery, according to the municipal Statistics Office.

The city earned over 6.9 million USD from exports, posting a year-on-year surge of 18.8 percent, with the domestic sector accounting for 3.74 million USD and the foreign-invested one nearing 3.17 billion USD, up 18.8 percent and 18.7 percent, respectively. 

Garment-textile enjoyed an export value of over 1 billion USD, expanding 39.2 percent, while that of computer, electronics and components valued at 954 million USD, up 20.5 percent.

Meanwhile, import turnover reached 16.4 billion USD, a 20.2 percent increase year-on-year with the domestic sector hitting 13.3 billion USD and the foreign-invested one 3.1 billion USD, up 25.7 percent and 1.4 percent. 

As the COVID-19 pandemic has fundamentally been brought under control, Hanoi authorities are working to attract investment, especially FDI. The number of newly-established businesses has been on the rise.

Hai Duong creating optimal conditions for Japanese investors: official

The northern province of Hai Duong is striving to create optimal conditions for Japanese investors, Secretary of the provincial Party Committee Pham Xuan Thang affirmed on May 30.

He made the pledge during a conference highlighting Hai Duong as a destination for foreign direct investment (FDI).

Green growth and digital transformation play a major role in the province’s development strategy for 2021-50, Thang said, underlining that FDI serves as a leverage for Hai Duong to fully tap its potential.

Hai Duong will make efforts to further improve its investment climate, and step up administrative reforms and housing projects to serve foreign experts, he stressed.

He expressed his hope that Japanese investors will invest in the province and prioritise high tech, support industries, modern IP infrastructure, high quality services and smart urban development. 

Japanese Ambassador to Vietnam Yamada Takio said Japanese firms highly valued Hai Duong's efforts to improve its investment climate over the past time as well as support from local authorities, especially during COVID-19 outbreaks.

He advised the Vietnamese province to ensure quality human resources, and invest in health and education infrastructure to meet workers’ demands, as well as guarantee power supplies for production, update regulations and remove bottlenecks facing enterprises.

Hai Duong recorded average GRDP growth rate of 8.1 percent from 2016-20, higher than the national average. Its economy is ranked 11th out of 63 provinces and cities in the country.

Vietnam more attractive investment destination: German business magazine

Due to China's strict zero-COVID policy and disrupted supply chains, more and more German companies in Asia are looking for alternatives and neighbouring Vietnam has become a new target, the German weekly business news magazine WirtschaftsWoch wrote in an article published on May 29.

In Asia, many German companies are looking at Vietnam as a new location for production.

The article cited Marko Walde, Chief Representative of the German Industry and Commerce in Vietnam, as saying that since Vietnam reopened its borders on March 15, the chamber has been visited almost every week by medium-sized German companies looking for new locations.

Vietnam offers tariff advantages thanks to the Trans-Pacific trade agreement with the US and is the only Asian country, besides Singapore, that has a free trade agreement with the EU.

Internationally active companies are diversifying their supply chains and considering Vietnam as an investment location, the article quoted the Germany Trade & Invest (GTAI) in analysis of the country of 99 million inhabitants.

The GTAI also took Danish toy manufacturer Lego as an example, with the company investing more than 1.2 billion EUR (1.29 billion USD) in a new factory in Vietnam.

Hanoi's CPI grows over 3 percent in five months

Hanoi’s consumer price index (CPI) rose by 3.04 percent in the first five months of 2022 against the same period last year, according to the municipal Statistics Office.
 
Among the 11 commodity groups, three saw strong price increases, including transport; housing, electricity, fuel and construction materials; and beverages and tobacco, by 15.3 percent; 4.85 percent; and 2.03 percent.

Meanwhile, post and telecommunications and education recorded respective declines of 0.3 percent and 2.26 percent.

Gold prices increased by 0.3 percent, while USD prices fell by 0.74 percent compared to the same period last year.
 
In May alone, the city’s CPI increased 0.3 percent from the previous month, and 3.79 percent year-on-year.

Ten out of the 11 commodity groups posted increased prices in May.

Five-month exports of agro-forestry-aquatic products up nearly 17 percent

The total import and export value of agro-forestry-aquatic products in the first five months of 2022 has been estimated at 41.3 billion USD, up 8.6 percent year-on-year, according to the Ministry of Agriculture and Rural Development (MARD).

Of the total, export turnover was estimated at 23.2 billion USD, up 16.8 percent, while imports reach 18.1 billion USD, down 0.3 percent.

In the period, the export value of main agricultural products surpassed 9.4 billion USD, up 10.4 percent; that of main forestry products reached nearly 7.7 billion USD, up 7.6 percent; and aquatic products nearly 4.8 billion USD, up 46.3 percent.

Nine products/product groups surpassed export value of 1 billion USD, namely coffee, rubber, rice, cashew nuts, fruits and vegetables, tra fish, shrimp, wood products and production materials.

Regarding export markets, the value of agricultural, forestry and aquatic product exports to Asia accounted for 41.6 percent of the market share, America 30.4 percent, Europe 12 percent, Oceania 1.7 percent and Africa 1.5 percent.

Phu Quoc helps investors accelerate key projects’ progress

Phu Quoc city of the Mekong Delta province of Kien Giang has been providing support for investors to accelerate progress of key projects as part of an effort to boost local socio-economic development.

According to the management authority of Phu Quoc Economic Zone, there are 49 projects underway in Phu Quoc which are scheduled to complete this year. By the end of 2022, the island city expects to disburse more than 22.59 trillion VND (974.55 million USD) worth of investment.

It also plans to start work on 14 projects this year, with over 1.79 trillion VND worth of investment in total to be disbursed.

The management authority said it is offering the most enabling conditions for investors in obtaining investment licences and keeping their projects on schedule.

It has also been coordinating with the Phu Quoc People’s Committee to support projects which are facing challenges in site clearance while urging investors and developers to get projects started as long as they are good to go.

Ministry helps enterprises effectively deal with trade remedies

The Ministry of Industry and Trade (MoIT) will continue to coordinate with relevant ministries and sectors in supporting businesses to minimise impacts of trade remedies which may have an detrimental effect on Vietnam’s export activities.

Accordingly, communication, training and legal knowledge dissemination activities will be enhanced to help business associations and enterprises improve their skills in handing foreign trade remedy investigation cases.

The MoIT said that the larger the exporting economies, the more susceptible they are to trade remedies, which the World Trade Organisation (WTO) allows its member countries to use to protect domestic industries against acts of unfair competition of imported goods.

Vietnam has become one of the 20 economies with the largest trade scale in the world. The Southeast Asian nation’s export goods are also facing more and more foreign trade defence investigation and application cases.

As of April 2022, Vietnam had faced 212 cases of trade remedy investigation in foreign countries. 

Supporting enterprises in handling foreign trade remedy investigation cases has been institutionalised in the Law on Foreign Trade Management and concretised in a number of projects approved by the Prime Minister.

In some cases, the MoIT coordinated with related ministries and sectors to directly provide information at the request of foreign investigation agencies so that they can better understand policies and regulations of Vietnam and avoid drawing unfavorable conclusions for Vietnamese enterprises based on unbiased and inaccurate accusations.

The Vietnamese authorities’ support in handling foreign trade remedy investigation cases have proven effective.

In many cases, Vietnam has succeeded in proving that the Government does not subsidise or interfere in the market to create unfair advantages for exporters.

HCM City enjoys good economic recovery, development signals

Socio-economic recovery and development have been seen in Ho Chi Minh City – the biggest economic hub in southern Vietnam, with strong growth in production and business activities.

In May, the city’s Index of Industrial Production (IIP) rose 6.5 percent over the previous month and 9 percent year on year. As a result, the city’s IIP in the first five months of this year expanded 2.6 percent year on year.

Strong rises were seen in many sectors, including processing-manufacturing at 44.8 percent and rubber and plastic product production 33.1 percent.

A representative from the city Department of Industry and Trade said that trade and service activities in the city started to recover from several months ago. Despite the strong increase in petrol price, local firms have struggled to overcome difficulties from the rise in material prices towards recovery and development, said the representative.

Statistics showed that total revenue from retail and service activities in the city in May reached 96.28 trillion VND (4.15 billion USD), up 0.8 percent over April and 10.4 percent compared to the same period last year. In the first five months of 2022, the figure hit 456.15 trillion VND (19.67 billion USD), a rise of 0.6 percent year on year.

German firms keen on Vietnamese market

Wirtschaftswoche (WIWO), a German weekly business news magazine, has published an article stating that the Vietnamese market has become a new option for German companies due to China’s zero-COVID policy causing supply chain disruption.

Marko Walde, chief representative of the German Industry and Commerce in Vietnam (AHK Vietnam), said that since the nation reopened its borders on March 15, several German companies have visited its office in order to seek consultancy for their new production hubs.

Furthermore, trade disputes with the United States, supply chain disruption, and China’s COVID-19 policy, have all been factors in forcing German companies based in Asia to consider relocating production to Vietnam.

Germany Trade & Invest (GTAI), an economic development agency, pointed out that international companies are in the process of diversifying their supply chains and many view Vietnam as an idea investment destination.

GTAI revealed that Danish toy maker LEGO has recently invested over US$1.29 billion in a new factory in the country.

Meanwhile, the Kärcher group in Winnenden, a family-owned global leader in cleaning technology, has also decided to select the nation as its new production location, according to WIWO.

KURZ, a leading international company in thin-film technology and a market leader in the hot stamping field, has set up a new production facility in Quy Nhon city in the central coastal province of Binh Dinh. 

Adhesive tape manufacturer Tesa, a subsidiary of Beiersdorf Group, also unveiled its investment plans of more than US$59 million in May, 2020, as it seeks to build a new factory in the northern port city of Hai Phong, a site which is expected to open next year.

Stefan Schmidt, head of Supply Chain and Operation at Tesa, emphasised that the country boasts ideal conditions for the company's growth, noting that Vietnamese economy has grown impressively and steadily despite the negative impacts of the COVID-19 pandemic.

Moreover, Vietnam has established trade relations with several countries and located in Asia - the world's largest free trade area.

With the new Vietnamese facility, Tesa can not only supply products to China, but also to countries such as Thailand and the Republic of Korea. 

Industrial production index picks up in five-month period

The industrial production index (IPI) during the opening five months of the year edged up 8.3% against the same period last year, with the processing and manufacturing sector continuing to be the main driver behind the industrial sector’s growth.

According to figures released by the General Statistics Office (GSO), industrial production index bounced back, rising by 4% over the previous month and increasing 10.4% against the same period from last year due to COVID-19 containment efforts.

Throughout the reviewed period, many industries also enjoyed a surge in IPI, such as the processing and manufacturing industry which rose by 9.2%, electricity generation and distribution (up 5.5%), and water supply, waste, and wastewater treatment and management (up 2.5%).

Other key industries that recorded high increases include clothing, up 22%, electrical equipment, up 20.4%, drugs and pharmaceutical chemicals, up 16.8%, coal and mining, up 13.5%, along with electronic products, computers and optical products, up 11.6%.

In contrast, several industries endured a decline in industrial production, such as rubber and plastic products, down 13.8%, repair, maintenance and installation of machinery and equipment, down 9.8%, drainage and wastewater treatment, down 3%, production of coke, refined petroleum products, down 2.6%, and crude oil and natural gas exploitation, down 1.7%.

VCCI's new comments on the draft on taxation in e-commerce
     
Vietnam Chamber of Commerce and Industry (VCCI) has recently made additional comments on the draft amending Decree 126 on taxation and invoices, repeating its disapproval of e-commerce platforms’ paying tax on behalf of vendors.

VCCI was concerned that the draft would leave e-commerce platforms no choice but to pay tax with their own money and later collect the tax from vendors. Unfortunately, tax re-collection is not an easy task given 86 per cent of online transactions are paid in cash, putting them at risk.

VCCI also feared that the draft would add costs to e-commerce platforms as they have to incur new expenses related to tax re-collection.

A study on 107 e-commerce platforms conducted by VCCI between April and May shows that their ratio of costs to revenues would increase by 10.65 percentage points should the draft be put in place.

Notably, 70 per cent of the platforms think it would be almost impossible to pay tax on behalf of vendors, and 100 per cent are concerned that they might face difficulties calculating vendors’ revenues, resulting in tax underpayment and overpayment.

Under the draft, the notion of “representative” is defined as a mandatory (involuntary) and automatic (no document of authorisation required) responsibility. VCCI believed such definition is at odds with that under the Civil Code.

VCCI also said the draft is unclear in that it does not define which vendors e-commerce platforms are required to pay tax on behalf of – all vendors or only those who earn over VND100 million per year.

If that is also the case under the draft, the platforms would have to detect high-revenue vendors to hold them taxable. Unfortunately, detecting taxable vendors is a tough job as no criteria are available for determining which vendors go beyond the revenue limit.

Economic expert Dinh Trong Thinh underscored the taxation principle that organisations and individuals have to pay tax by themselves to invalidate the regulations.

He said e-commerce platforms are just intermediaries who connect online buyers and vendors, so it is irrational to hold them responsible for paying tax on behalf of vendors.

Accordingly, VCCI called for modifications to the draft, sparing e-commerce platforms the obligation of paying tax on behalf on vendors. Instead, they should be required to disclose vendors' information to the tax authorities.

The disclosure frequency is proposed to be yearly, instead of quarterly as stated in the draft. Lower frequency is believed to help ease the hard work of information disclosure.

VCCI also called on lawmakers to add a clear-cut definition of vendor revenues to the draft, which would be the sum of all revenues recorded on the vendor's invoices. 

Hoa Phat expects to pay stock dividend from June to August
     
The Board of Directors of Hoa Phat Group (HoSE: HPG) has approved the 2021 dividend payment of 35 per cent, of which 5 per cent is paid in cash with each share receiving VND500.

With 4.47 billion shares outstanding, the company will have to spend VND2.2 trillion (US$94.9 million).

The steel producer will also issue an additional 1.34 billion shares to pay the remaining dividend.

The source of capital is taken from the retained profit after tax on last year’s audited financial statements. The issuance date is expected from June to August of this year.

The total value at par value is VND13.4 trillion, thereby increasing the charter capital of the company to over VND58.1 trillion.

Chairman Tran Dinh Long and his family members are holding 1.56 billion HPG shares, which account for 47.25 per cent of the company’s capital. Therefore, after the dividend payment, Long and his family can receive about VND784 billion in cash and 737 million shares.

Vina Roma proposes $2 billion Quang Tri iron and steel complex

Vina Roma Quang Tri Steel JSC has proposed building an iron and steel complex in the southeast province of Quang Tri with the total investment capital of just over $2 billion.

According to the investor’s proposal, Vina Roma Quang Tri will produce raw steel, section steel, and hot-rolled plate with modern European technology and an annual capacity of 4.5 million tonnes.

The complex will cover an area of just over 460 hectares in Quang Tri Southeast Economic Zone.

The construction will be implemented over three periods. The first has an investment capital of around $650 million and a capacity of 1.1 million tonnes per year. The second phase comes with an injection of a further $390 million to double the annual capacity. The third period is designed to generate 2.3 million tonnes of steel with the total investment capital of $1 billion.

The complex is expected to generate 4,000 jobs.

Vietnam Airlines makes online check-in services available at two more airports

Vietnam Airlines launched online check-in services for passengers departing from Pleiku Airport (Gia Lai province) on May 31 and plans to offer the services at Phu Cat Airport (Binh Dinh province) from June 8, raising the number of airports where its self-services are available to 16.

The national flag carrier is seeking to provide online check-in services at all domestic airports where it operates flights to/from as part of an effort to promote itself as a digital airline and improve customers’ experiences and convenience.

To save time and avoid long queues at airports, those flying with Vietnam Airlines can self check-in for their flights using either the carrier’s website (www.vietnamairlines.com) or mobile app 1-24 hours prior to departure.

About 55 percent of passengers opt for the self-services at major airports like Noi Bai, Tan Son Nhat and Da Nang, according to Vietnam Airlines. The figure is over 30 percent at small airports.

Fourth Vietnam Economic Forum to take place in HCM City

The fourth Vietnam Economic Forum is scheduled to take place in Ho Chi Minh City on June 5 with a focus on how to build an independent and self-reliant economy with extensive integration in the new context.

The forum will be held by the Party Central Committee’s Economic Commission, the Government, and the HCM City People’s Committee.

It will serve as a platform for ministries, sectors, localities, scientists, researchers, enterprises, and representatives of some international organisations to share opinions and viewpoints which will be considered in the Party Central Committee’s drafting of socio-economic policies, Vice Chairman of the Economic Commission Nguyen Thanh Phong told a press meeting in Hanoi on May 31.

The event’s plenary session will look into the global economy and major trends in international economic cooperation, opportunities and challenges to Vietnam in the global economy, digital technology manpower, and risk governance.

Meanwhile, three panel discussions will look into how to form a stable labour supply chain after the COVID-19 pandemic; the development of capital and real estate markets; and technological reform, digital transformation, and supply chain diversification.

Contactless payment services available at Petrolimex stations nationwide

The Vietnam National Petroleum Group (Petrolimex) cooperated with the global digital payment company Visa to launch contactless payment services at the former’s petrol stations across the country on May 31.

This payment form optimises experience of customers who now can make it simply by tapping their cards, said Dang Tuyet Dung, Visa Country Director for Vietnam and Laos.

The solution helps ease pressure on the petrol stations’ staff, speed up the process and ensure security for users and transactions, she highlighted, adding that the partnership will bring better quality of life for Vietnamese people.

Under the partnership, Petrolimex will deploy advanced Point-of-Sale (POS) devices across its network of retail petrol stations nationwide, where consumers can pay using Visa’s contactless-enabled cards.

Vingroup, Intel ink MoU to develop advanced technologies

Vietnamese conglomerate Vingroup on May 31 announced that it has signed a Memorandum of Understanding with Intel to create a wide range of advanced computing systems.

Under the MoU, the two sides will work to explore opportunities for 5G-enabled smart city and smart building solutions, which can be applied to Vinhomes' Smart City projects. They will also collaborate in creating and deploying smart factory Internet of Things (IOT) solutions for VinES batteries manufacturing and VinFast electric vehicles manufacturing.

Both companies will also work together to define a shared vision of future in-vehicle computing platforms and build scalable in-vehicle computing platforms for ADAS  based on Mobileye technology and infotainment systems.

Innovation key to enhancing businesses’ productivity

While innovation is considered as key to boosting the productivity and quality of products, due attention has not been paid to the issue by Vietnamese enterprises, experts have said.

Bui The Duy, Deputy Minister of Science and Technology, said that the number of Vietnamese enterprises using such high technology as 3D printing or robotics are still limited. This is a worrisome problem in the context of international economic integration and the fourth Industrial Revolution is taking place strongly in the world.

According to experts, the revolution is gradually eliminating the advantages of spontaneous management methods and old business models.

Innovation helps enterprises increase revenues, profits, reduce costs, meet customers’ demand, attract resources and improve their reputation. However, there is no example innovative model so they should choose the right one to develop.

Nguyen Doan Ket, Deputy General Director of Rang Dong Light Sources and Vacumm Flask Joint Stock Company, agreed, saying each business must find the right solutions which are suitable to their capacity and resources.

Rang Dong has focused on investing in science and technology, joined hands with major universities and built three research centres on lighting and digital technology as well as developing business models on digital platforms to make products with Vietnamese design and trading on Vietnamese platforms while still bringing high added value, meeting quality conditions for export, he said.

Ket also said the company has faced many difficulties, including changing mindset, business model and operating mechanisms in the innovation process.

Deputy Minister of Science and Technology Bui The Duy said as it is time for Vietnam to create “breakthrough” through science and technology as the country has experienced strong development stages.

To promote scientific initiatives among young people, it is necessary to prepare resources early and training from high schools, he stated.

Source: VNA/SGT/VNS/VOV/Dtinews/SGGP/VGP/Hanoitimes