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VIETNAM BUSINESS NEWS AUGUST 17

More effective tax collection of e-commerce necessary
More effective tax collection of e-commerce necessary hinh anh 1

Vietnamese e-commerce is growing, creating many opportunities to generate jobs, develop the private sector economy and increase revenue for the State budget. However, preventing tax losses in this business requires improving mechanisms and policies.

Data published by the Vietnam E-commerce and Digital Economy Agency (IDEA), Ministry of Industry and Trade, showed that the average growth rate of retail e-commerce revenue reached 17% per year in 2020 and last year, with total revenue of 13.7 billion USD, accounting for 7% of sales of consumer goods and services nationwide last year.

Economic experts said that given the growth of e-commerce transactions, stricter tax collection management both in breadth and depth for this type of business is necessary.

E-commerce transactions can be done between business to business, between businesses and individuals, and between individuals and individuals.

However, the nature of e-commerce is that there is no transaction office, no paper-based transactions, and some of the goods exchanged in the transaction are intangible goods such as digital products.

Therefore, transactions in e-commerce are often difficult to control, manage, monitor, and access information on, according to Anh.

In addition, tax evasion is more frequent and common, causing difficulties for tax administration, and the annual budget can lose a significant amount from e-commerce.

In order to improve the effectiveness of tax administration for e-commerce activities, a representative of the National Institute for Finance (Ministry of Finance) said that it is necessary to ensure the principle of fairness between the traditional business and e-commerce business.

In particular, tax mechanisms and policies must create favourable conditions for e-commerce activities to develop, without creating barriers for consumers.

Rubber exports surge over seven-month period

Vietnam exported 983,760 tonnes of rubber worth US$1.68 billion during the past 7 months of the year, representing a rise of 7.2% in volume and 9.1% in value compared to the same period from last year, according to statistics released by the General Department of Vietnam Customs.

July alone witnessed the country ship 196,500 tonnes of rubber worth US$318.98 million, up 4.6% in volume and 2.9% in value compared to the previous month.

Most notably, rubber exports in some major markets in July saw robust growth, including India, the Republic of Korea, Turkey, Indonesia, Russia, Canada, and Spain, while exports to other markets such as Taiwan (China), the United States, Sri Lanka, Pakistan, and Japan endured a downward trajectory.

China remained the country’s largest rubber consumption market in July, duly accounting for 71.3% of total Vietnamese rubber exports, with 140,040 tonnes worth $220.09 million.

International Fisheries Exhibition-Vietfish 2022 returns to HCMC from August 24

After two years of hiatus due to the Covid-19 epidemic, the Vietfish 2022 International Seafood Exhibition will return this month.
 
With the message ‘Asian seafood house’, the Vietfish 2022 International Seafood Exhibition organized by the Association of Seafood Exporters and Producers - VASEP will take place from August 24 to 26, 2022 at the Saigon Exhibition and Convention Center (SECC) at 799 Nguyen Van Linh in Ho Chi Minh City’s District 7.

The event will see the participation of nearly 200 units with 362 exhibition booths in various fields. The Vietfish 2022 not only connects leading enterprises in the quality of shrimp, fish, and mollusks but also businesspersons can collect the latest information and achievements in seed, animal feed, biological products, equipment technology, production and processing.

Attendees can experience directly the models, and technology and directly evaluate the quality of seafood through fresh or ready-made products at the booth.

Additionally, Vietnamese consumers will have the opportunity to learn and enjoy 100 percent Vietnamese seafood products that meet the highest standards of food safety, supplied to 165 countries around the world.

Quang Ninh to open Van Don-Mong Cai expy on National Day

The Van Don-Mong Cai expressway in the northern province of Quang Ninh will be opened to traffic on September 2, Vietnam’s National Day, the local media reported.

Work on the 80-kilometer-long road began in April 2019, with total capital of over VND11 trillion. The four-lane expressway will allow vehicles to travel at a maximum speed of 120 kilometers per hour.

When in place, the expressway is expected to shorten the travel time between Van Don District and Mong Cai City to 50 minutes, instead of two hours.

The road will also help complete an interprovincial expressway connecting Lao Cai with Hanoi, Haiphong and Mong Cai City in Quang Ninh Province.

Haiphong calls for investment in VND4.4-trillion housing project

The Haiphong City Department of Planning and Investment is calling for firms to apply for investment in a residential project with a total cost of some VND4.4 trillion.

Firms can register for investment in the project from now until September 5.

The housing project will be located on 142 Le Lai Street in May Chai and Cau Tre wards in Ngo Quyen District.

The residential project will comprise 10 blocks with 4,450 social houses covering a total area of some 54,000 square meters, and 163 commercial homes which will cover over 13,000 square meters.

Work on the project will begin after land is handed over to the investors. The project will operate in 50 years.

Additional multi-storey airport parking lot proposed in HCMC 

The construction of a new multi-storey parking lot has been proposed for the Tan Son Nhat International Airport in HCMC to provide extra space for vehicles entering the overcrowded airport.

The airport’s existing eight-story parking building has a total floor area of 67,000 square meters that can house 6,000 motorcycles, 1,500 cars, and 700 taxi cabs. On average, around 6,600 motorcycles and 4,500 cars enter the airport per day. Particularly, during the two summer travel months, the facility has been overwhelmed as it normally serves up to 9,500 motorcycles and 6,500 cars daily.

As for measures taken to ease the passenger overload at the airport, the HCMC Transport Department adjusted the pickup and drop-off locations for public buses at the airport early this month. It also aligned the pickup time of the airport bus line No.152 with flight departure and arrival times at the airport, and increased the operating time of other airport bus lines, said Bui Hoa An, deputy director at the department.

The local police will also ramp up efforts to tackle rampant passenger transport services at the airport.

Vietnam's positive outlook lures foreign investors back to stock market

Foreign investors sway back to the local stock market amid Vietnam’s bright economic outlook in the long term, according to a report from the SSI Securities Corporation.

In July, Vietnam’s stock market witnessed a net outflow of VND347 billion (US$14.8 million) following a net inflow of VND8.37 trillion ($358 million) during the first six months of the year. Active funds also pulled a net amount of VND163 billion ($7 million) in July after two months of buying in.

Among the lot, VFM VNDiamond withdrew VND522 billion ($22.3 million) in July after buying in a net amount of VND5.6 trillion ($239.4 million) in the first half, VanEck with VND300 billion ($12.8 million), and VFM VN30 with VND120 billion ($5.13 million).

On the contrary, Fubon maintained its net-buying position for a seven-consecutive month at VND400 billion ($17.1 million) in July, and SSIAM VNFIN Lead with VND170 billion ($7.26 million), as they helped partially offset the impacts from money flowing out of the market.

In the stock market, foreign investors net sold over VND1 trillion ($42.7 million) in July.

Which region has highest number of enterprises?

As of December 31, 2020, the Southeast region was home to 281,000 enterprises, accounting for 41.1 percent of the country's total.

The region attracted 5.4 million laborers, making up 36.6 percent of the total number of laborers in the country, according to the 2021 Economic Census released by the General Statistics Office.

The Southeast region includes Ho Chi Minh City -  Viet Nam's economic locomotive - and five provinces namely Binh Phuoc, Tay Ninh, Dong Nai, BInh Duong, and Ba Ria-Vung Tau. 

The Red River Delta was the nation's second largest economic region with 216,800 firms and 4.9 million laborers, accounting for 31.7 percent and 33.2 percent, respectively. 

It was followed by the North Central Coast, Mekong Delta, Northern Midlands and Mountains and Central Highlands with 89,200, 50,900, 28,100 and 17,900 enterprises, respectively. 

The southern metropolis Ho Chi Minh City and the capital city of Ha Noi remained the largest economic centers of Viet Nam, taking the lead in the numbers of enterprises and laborers. 

The non-state sector had 660,100 businesses in 2020, accounting for 96.4 percent of Viet Nam's total, up 35.1 percent from 2016. The sector created jobs for 8.6 million workers, or 58.6 percent of the country's workforce, up 0.4 percent against 2016 figure.

There were 22,200 foreign direct investment (FDI) firms operating in the country in 2020, accounting for 3.3 percent of the total and soaring by 58.8 percent against 2016. 

They employed 5.1 million workers, 34.6 percent of the workforce and a growth of 22.5 percent from 2016.

As many as 1,963 State-owned enterprises were recorded, down 26.3 percent compared to 2016 and making up 0.3 percent.  

Tech-product distributors, retailers see strong rebound in July

Mobile phone and laptop distributors and retailers reported good revenue and profit in July, showing that business activity of companies operating in this field are on the rebound from the COVID-19 pandemic.

According to surveys by Bao Viet Securities JSC (BVSC) with Digital World JSC (DGW) and PetroVietnam General Services JSC Corporation (PET) - the two big laptop and mobile phone distributors in Vietnam, leaders of these firms said that they all saw signs of recovery in the demand for laptops and mobile phones in July.

The revenue from laptop sales of DGW in the month increased by 5% over the same period last year, and is forecast to continue recovering in August and September. Meanwhile, mobile phone revenue surged 105% year on year as consumption last year was heavily affected by pandemic-induced restrictions. 

PET also confirmed the same trend although it has not yet released its preliminary business data for July.

According to BVSC's estimates, mobile phone revenue in the second quarter of 2022 in Vietnam increased by 15.2% year-on-year, reaching VND26.8 trillion (US$1.145 billion), but was down VND4.2 trillion compared to that reported in the first quarter.   

Vietnam’s mobile phone revenue is estimated to grow 13.4% year-on-year in the first half of 2022 to VND57.9 trillion.

Quang Ngai needs VND4 trillion for North-South Expressway site clearance

The central province of Quang Ngai has asked the Ministry of Transport to provide VND4.2 trillion (USD181.03 million) in funding for the North-South Expressway project site clearance.

The 60-kilometre section running through Quang Ngai Province is part of the 88-kilometre sub-project linking Quang Ngai and Binh Dinh. The site clearance will affect roughly 2,000 households, including 1,000 that need to be relocated. 

 Quang Ngai has asked the Ministry of Transport to provide VND4.2 trillion in funding for the North-South Expressway project site clearance.

According to the provincial people’s committee, around VND4.2 trillion needs to be used for site clearance. Of the sum, VND1.4 trillion is for this year.

Quang Ngai has built 23 resettlement areas with a total area of 121 hectares so far. The province will need to spend VND40 billion for relocating 214,000 graves.

The VND20.5 trillion Quang Ngai-Hoai Nhon Expressway sub-project is scheduled to be started in the fourth quarter of this year. It is expected to be put into operation in 2026.

Firm wants container port converted into cruise terminal in Danang

The Vietnam Maritime Administration has written to the Ministry of Transport proposing considering Danang Port JSC’s proposal to convert the Tien Sa seaport in Danang City into a cruise ship port.

Danang Port JSC, which manages and operates the port, asked for the conversion of the function of the container port into a tourist port which will only serve cruise ships.

The firm proposed starting the conversion in 2026, and allowing it to develop two new wharves at the Lien Chieu port, the local media reported.

However, the administration said that the Tien Sa port should be gradually converted into a cruise ship port only after 2030 in line with the city’s seaport development plan. The Lien Chieu port will be turned into a specialized container port at the same time, said the administration.

The administration also encouraged Danang Port JSC to conduct an investment study, but said that tenders would be invited to select an investor for the wharf project at the Lien Chieu port.

The prime minister had earlier approved a plan to build two wharves at the port. The city is calling on investors to join the project.

Cai Mep-Thi Vai fairway upgrade approved

The Ministry of Transport has approved a VND1.4 trillion investment project to upgrade the Cai Mep-Thi Vai navigational channel.

The project is aimed at enhancing the port’s operational efficiency by developing a cluster of international gateway ports in the southern province of Ba Ria-Vung Tau to boost trade in the region.

The project’s investment capital will be allocated from the State budget in the medium-term public investment plan for the period of 2021-2025.

It includes around VND1.1 trillion for construction, VND10.7 billion for project management, and VND39.7 billion for construction investment consulting.

The capital will be allocated in accordance with the project’s four-phase execution schedule, starting from 2022.

Once completed, the project is expected to encourage investment in the region and strengthen local socio-economic development, while also increasing revenue to the State budget to pay the yearly maintenance and dredging expenses.

Vietnamese handicrafts introduced in New York

Eight Vietnamese handicraft exporters are introducing their products at the NY Now exhibition that is underway in New York, the US with the participation of about 950 businesses from 35 countries.

The products included toys, gifts, and household items that are handcrafted from natural materials such as sedge, rattan, bamboo, wool, and ceramic.

Vietnam first joined the biannual NY Now exhibition in 2004 as part of a national trade promotion programme held by the Ministry of Industry and Trade.

Vietjet offers tickets for Lunar New Year 2023 with super saving prices

Budget airline Vietjet Airs on August 16 began to sell tickets for flights during the 2023 Lunar New Year holidays at super saving prices.

Passengers travelling from the South to the North and the Central region before the Lunar New Year and who flying from the North and the Central to the South after the Lunar New Year holidays can buy Vietjet tickets from August 16 to enjoy the promotional prices from only 619,000 VND (excluding tax and fees) with the most convenient flight schedules.

Week of OCOP products launched in Hanoi

A week introducing and popularising One Commune, One Product (OCOP) products, fruits and farm produce was launched in Hanoi on August 16.

Over 60 businesses and cooperatives join the event with 100 stalls showcasing products of clear origin from Hanoi and 20 provinces such as Hai Duong, Hung Yen, Lam Dong, Dac Nong, Quang Ngai, Quang Ninh, Lao Cai, Quang Nam, Phu Yen, Nghe An, Bac Giang, Son La and Can Tho.

Over the past years, Hanoi has worked closely with cities and provinces to effectively carry out OCOP programmes. The department also helped bring OCOP products to distribution channels, supermarkets, food chains and OCOP points-of-sale, contributing to raising the city’s retail revenue and the campaign “Vietnamese prioritise Vietnamese goods”.

The event will last till August 20.

Over 260 stalls register for HCM City int’l tourism expo

Domestic and foreign firms have so far registered more than 260 stalls at the upcoming 16th International Travel Expo Ho Chi Minh City (ITE HCMC 2022), the municipal Department of Tourism said at a press conference on August 16.

The expo, themed “Growing Forward Together”, is scheduled for September 8-10 at the Saigon Exhibition & Convention Centre (SECC) in District 7.

Bringing together over 1,500 delegates from management agencies, travel companies, airlines, and operators of accommodation and entertainment facilities in Vietnam and abroad, it aims to create favourable conditions for Vietnam’s tourism community to grow and connect with their foreign peers.

The ITE HCMC is the only international travel event in Vietnam to launch an international buyer programme and invited partners from 18 countries and territories housing key and potential inbound markets for Vietnam, including the US, Germany, Poland, the Republic of Korea, India and Malaysia.

HCM City transport companies continue to reduce fares as fuel prices fall

Passenger transport operators in HCM City are gradually reducing prices as fuel prices continue to fall.

Saigon Railway Transport JSC was quoted by Sài Gòn Giải Phóng newspaper as saying that it has reduced train fares by up to 5 per cent.

After students return to school in September, it plans to cut them further.

Four bus companies operating out of the Western Bus Station in Bình Tân District have sought to lower their fares by 6-12 per cent, while one operator at Bình Thạnh District’s Eastern Bus Station wants to cut its HCM City – Tuy Hòa Province fare by 4 per cent.

According to the city Department of Transport, operators wanting to decrease fares by more than 3 per cent have to get its approval. Taxi companies are also looking at decreasing fares.

Vietnam Airlines and Pacific Airlines are offering promotions and discounts until the end of the year.

Fuel prices skyrocketed earlier this year due to geo-political issues, peaking in June, leading to most transporters increasing fares.

In July oil prices began to fall, and Vietnamese authorities also slashed the environment tax on fuel, but fares did not begin to fall immediately.

Faster disbursement of public investment boosts cement industry
     
The recovery of the economy, along with the Government's acceleration of the disbursement of public investment capital are favourable factors for the development of the domestic cement industry.

But the cost of input materials, accounting for a large proportion of the composition of cement production, is increasing sharply, affecting the profits of enterprises in the industry.

According to Agribank Securities Joint Stock Company (Agriseco), the world commodity market has formed a strong uptrend since 2020 when the COVID-19 pandemic broke out. This has had a great impact on many businesses, especially the structure of input material costs.

Some basic commodities such as oil, gas, and coal have increased and peaked in recent years. Coal accounts for more than 30 per cent of the cost of raw materials and accounts for 18 per cent of the total cost of cement production.

The price increase was attributed to recovering demand as economies reopen and the disruptions of global supply chains caused by the COVID-19 pandemic and geopolitical tensions.

Countries racing for coal imports, which are in short supply due to years of declining investment in new mines, have pushed world coal prices to a new record this year. Spot physical coal at Australia's Newcastle port - the main coal supplier to Asia - hit US$400 per tonne for the first time in June 2022.

According to data from the Department of Building Materials under the Ministry of Construction, cement consumption, especially for export, dropped sharply due to fierce competitive pressure on prices and the high price of coal fuel.

In July 2022, the estimated consumption of cement products was only about 5.95 million tonnes, down about 27 per cent compared to July 2021; of which, domestic consumption reached about 4.85 million tonnes; exports were estimated at 1.1 million tonnes.

Textile firms call for favourable policies amid pessimistic prospects
     
With a pessimistic outlook for the second half of 2022, textile firms are calling for favourable governmental policies to turn their situation around.

The Vietnam Textile and Apparel Association (VITAS) said that textile firms came out of the first seven months of the year relatively well.

Textile exports hit US$26.55 billion, up 16.5 per cent year-on-year. Textile trade surplus reached US$11.07 billion, 31 per cent higher than last year. The industry created 1.9 million jobs with an average monthly wage of VNĐ8.5 million.

However, VITAS was concerned that the situation would worsen in the next five months due to three unfavourable factors.

The first factor is the weakening demand of Việt Nam's trade partners.

Specifically, China, Japan and many other countries are tightening their preventive measures against COVID-19, causing trade disruptions.

High inflation in large importers such as the US and EU fuel the situation by eroding consumer buying power, further dragging down textile demand.

It is also worth noting that the Russia-Ukraine conflict will likely grow fiercer in the short term. With the conflict unabated, textile flows to the countries would remain low for several months.

Meanwhile, the recent depreciation of neighbouring currencies against the US dollar is putting Vietnamese exporters at a disadvantage.

The Chinese yuan has depreciated by 5.3 per cent and the Japanese yen by 16 per cent against the US dollar, whereas the Vietnamese đồng by just 1.8 per cent, eroding Vietnamese textiles' price advantages.

On top of that, the US's Uyghur Forced Labour Prevention Act (UFLP) and the EU's plan on carbon fees are expected to set the bar high on cotton. Vietnamese firms thus must overcome more administrative barriers to bring their cotton-derived products to those markets.

The second factor is labour shortages caused by shrinking urban labour forces. It is a burning issue because textiles is a labour-intensive industry. 

Given many workers left cities during the pandemic and never returned, and others took early retirement, the industry is expected to remain slack for the rest of 2022.

The last factor is the faltering financial situation of many textile firms amid mounting costs. Notably, input costs have increased by around 25 per cent, and transport costs have tripled since early in the year.

Grab stops collecting hot weather surcharge

The Viet Nam Competition and Consumer Authority has worked with related parties to research and collect information to clarify the matter of Grab Viet Nam Company Limited applying a hot weather surcharge.

Specifically, Grab has announced the surcharge application to services of GrabBike, GrabFood, GrabMart and GrabExpress in Ha Noi, HCM City and some other areas in Viet Nam from July 6.

The hot weather surcharge is applied when the outdoor temperature in a specific time frame reaches 35 Celsius degrees or higher.

Grab affirmed that 100 per cent of the revenue (after tax) from the surcharge is reserved for Grab's driver partners.

However, due to limitations in system setup, especially in automatically separating and dividing the revenue to account for 100 per cent of the revenue (after tax) from this surcharge to the driver partner, Grab stopped applying the surcharge from July 7.

Grab has completed transferring all revenue from the surcharge of hot weather after deducting value added tax to its driver partners by the end of July 29.

If added directly to the fare, the hot weather surcharge or other fees and surcharges applied by Grab will change the total fare payable by customers, so it must fully inform customers before use according to the provisions of the law on consumer protection.

To maintain a fair and healthy competitive environment and protect the interests of consumers, the Viet Nam Competition and Consumer Authority requested Grab and businesses to review policies, business activities and competition, ensure strict compliance with the provisions of the law on competition and protecting the interests of consumers. 

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

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