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Under the National Power Development Plan for the 2021-2030 period, with a vision to 2050 (PDP VIII), in 2030, 50% of office buildings and 50% of residential houses use solar power for their self-consumption.
At the working session, participants pointed out a number of difficulties hindering the installation of roof-top solar power system and reasons behind the situation, as well as measures to promote the installation of the system in houses and buildings, especially in areas with high risk of power shortage like the northern and central regions.
Concluding the session, Deputy PM Ha said that as matters related to solar and renewable energy have yet to be included in legal documents, it is necessary to design flexible policies in piloting the scheme.
He asked the MoIT to promptly propose to the Government and the PM mechanisms and policies to encourage investment in the field and promote the use of electricity generated from roof-top power systems in daily activities as well as offices and businesses’ operations.
Management agencies should provide optimal conditions and give technical guidance as well as incentives to solar power equipment manufacturers and importers, while supporting households in purchasing the equipment, and building a suitable price framework for roof-top electricity transmitted to the power grid.
Earlier, PM Pham Minh Chinh and Deputy PM Tran Hong Ha had many meetings with relevant ministries and agencies to seek measures to ensure power supply in the dry season of 2023 and following years, especially in the north.
On June 6, PM Chinh sent a dispatch to ministries, sectors and localities on urgent solutions to ensure supply of power in the dry season of 2023 and following years as well as effectively implement power saving measures.
On June 8, Deputy PM Ha also issued a directive on the strengthening of power saving in the 2023-2035 period and following years, which included the promotion of roof-top power system installation.
Nearly 200 exhibitors to attend Vietnam Int’l Industry Show 2023
Around 200 exhibitors from Vietnam and around the world will participate in Vietnam International Industry Show 2023 which is scheduled to take place at Hanoi International Centre for Exhibition (ICE Hanoi) from June 28 to 30.
The exhibition is split into four zones: Paper Chain Vietnam, Rubber Vietnam, Coastings Vietnam, and International Exhibition Fair for Environmental Technology (ENVIROTEX).
The show spanning a total area of 10,000 square meters will have approximately 200 booths set up by Vietnamese and foreign companies from China, Japan, India, and the Republic of Korea.
On display will be pulp and paper, coatings, rubber and tire, and agrochemical products of famous brands such as Yunda, ANDRITZ, Kumera, Sichuan Gaoda, Euchemy, and ASIAE.
A number of workshops and B2B sessions will be held on the sidelines of the event, to help local enterprises gain broader access to both domestic and foreign partners.
A forum to promote cooperation in paint and coating industry between China and Vietnam, and workshops on supply chain in Vietnam’s rubber industry and the pulp, paper, printing and packaging industries will be high on the agenda.
Vietnam International Industry Show has been held since 2012. It has become a popular and highly praised international trade exchange platform for pulp and paper, coatings, rubber and tire, and agrochemical industries in Vietnam and other countries in various regions.
Positive signals for lychee export in 2023
2023 is expected to be a bonanza year for lychee growers as the export of the juicy fruit to markets globally has yielded positive signals, reports the Ministry of Agriculture and Rural Development.
Nearly 100 tonnes of lychee were exported to Japan, Australia, the UK and the EU markets from June 3-7, including 40 tonnes shipped to the Japanese market alone.
Bac Giang province, which is dubbed the lychee granary of Vietnam, said three tonnes of its lychee will be exported to Australia on June 15.
Meanwhile, Hai Duong province, another lychee producer in Vietnam, said on June 9 its lychee grown in Thanh Ha district has been exported to Japan, Australia, the US and Europe this year.
According to experts, despite the good signals, the volume of lychee shipped to demanding markets like the US and EU is remains quite modest, as the fruit has to compete with the similar product imported from China and some other lychee producers.
In order for this Vietnamese juicy fruit to penetrate deep into demanding markets, they say much work still needs to be done.
The US market is a case in point as it lays down strict food safety and hygiene criteria for imports, including fruits.
Currently, Vietnam has yet to develop an irradiation centre in the north meeting US standards, except for two licensed by the US in the south (Ho Chi Minh City and Long An province).
To ship the Vietnamese lychee to the US, businesses have no choice but to transport the fruit from the north to the south for irradiation.
It’s a time consuming process and it’s costly due to high transportation costs, says Dang Phuc Nguyen, general secretary of the Vietnam Fruit and Vegetable Association (Vinafruit), pointing out that the fruit has a short life cycle from harvest to consumer.
In addition, the packaging and preservation process has yet to meet US standards, causing the fruit to be easily damaged and discolored when it hits supermarket shelves.
Vietnam’s main competitors are China and Mexico whose products have a large distribution system, competitive prices, and low shipping costs, says Nguyen.
The official also reveals that the Plant Protection Department under the Ministry of Agriculture and Rural Development is actively working with the Animal and Plant Health Inspection Service (APHIS) under the US Department of Agriculture towards licensing the Hanoi Irradiation Center
A kilogram of lychee costs extra VND10,000-12,000 if the fruit is transported by air from the north to the south for irradiation. If the fruit is irradiated in Hanoi, the cost will be reduced and the export item will be more competitive, analyses Nguyen Dinh Tung, general director of Vina T&T Import-Export Company.
Building irradiation facilities in the north and improving the fruit packaging and preservation capacity are among issues that need to be addressed soon to help Vietnamese fruits, including lychee, to gain a firm foothold in the US market, conclude experts.
Vietnam intensifies regional linkages to boost green exports
Strengthening regional linkages and harnessing the strengths of each province and city is crucial to promoting sustainable and green exports, according to experts at a recent forum on the subject held in Ho Chi Minh City.
The forum brought together experts from various sectors to discuss key challenges and opportunities facing Vietnam's economy, given the global economic uncertainty and growing demand for sustainable products.
Speaking at the forum, Deputy Minister of Industry and Trade Do Thang Hai said Vietnam's economy faced many challenges in the first quarter of 2023, with many industries dealing with a drop in demand and some markets grinding to a halt. These difficulties have led to job cuts in many enterprises, making the situation even more challenging.
The situation is further complicated by stricter requirements for sustainable products from major markets such as the US, the EU, Japan, the Republic of Korea, and China, which poses significant challenges for Vietnamese businesses.
While there has been rapid growth in Vietnam's agriculture, forestry, and seafood exports in recent years, there is still strong competition from countries such as China, Thailand, Bangladesh, Indonesia, and India.
He said that to remain competitive, firms need to meet not only the demand for quality products but also more stringent sourcing, environmental, and social standards.
The high cost of logistics - 20 to 25% of the total cost of exporting in Vietnam - compared with 10 to 15% in other countries in the region and a lack of infrastructure in some key areas, like the Mekong Delta, are other obstacles to sustainable exporting, Hai added.
Vo Van Hoan, Vice Chairman of the Ho Chi Minh City People's Committee, noted that Vietnam's largest city is the centre of the key economic region in the south, the area with the highest growth rate in the southeast, and a leader in international economic integration, and has the highest export turnover in the country.
However, he added that consumer demand has declined since the beginning of 2023, which will negatively affect the export activities of the city and the country as a whole due to the strong impact of global geopolitical conflicts and inflation.
Moreover, the disadvantage of the city is the lack of effective linkages within the southeastern region to optimise its export potential and achieve sustainable development, he noted.
Nguyen Mai, Chairman of the Vietnam Association of Foreign Invested Enterprises, said that in the current competitive environment, the development of regional linkages is essential for economic growth and export promotion.
The key is to cooperate in investment, trade, tourism, and service development to tap each region's potential, connect with other economic centres, and enhance the country's national competitiveness in regional competition, he said.
Dr. Vo Tri Thanh, Director of the Institute for Brand and Competitiveness Strategy, pointed out that sustainable development and green growth are well-developed global trends, and enterprises must adopt sustainable production methods to keep up.
He urged businesses to optimise supply chains and prioritise the development of green supply chains while meeting global demand trends. The State needs to reform policies, fulfill commitments in free trade agreements (FTAs), and provide training and communications to ensure that green supply chains have a sound legal framework to develop.
The Vice Chairman of the Ho Chi Minh City People's Committee said that the world is changing under the pressure of dwindling natural resources, pollution, and climate change, and consumers are becoming more environmentally conscious and shifting towards sustainable and eco-friendly products.
Therefore, sustainable development and green growth are essential for Vietnam's exports to remain competitive in the global market, he stressed.
Hoan added that Ho Chi Minh City has been proactive in developing plans, solutions, and action programmes to promote regional linkages in trade and services. Based on its strengths in production, trade, and services, the city has also proposed strategies for the economic development of each locality to serve both domestic and export markets.
In the long run, in line with the direction of sustainable development and to meet international requirements for a circular economy, he said the regional linkage strategy between Ho Chi Minh City and other provinces and cities will aim at green exports.
Carpe diem for EU firms to invest in Vietnam’s food processing industry: Vietnam Briefing
The EU firms have an especially advantageous position to enter Vietnam’s food processing market due to the close trade ties between Vietnam and the bloc, as well as a favourable image of European products among Vietnamese consumers, according to Vietnam Briefing news site.
In a recent article, the news site highlighted the growth prospects of Vietnam’s food processing sectors and discussed how EU companies can capitalise on the current opportunities in the market.
Vietnam Briefing said food processing is one of Vietnam’s most important industries. The country benefits from its fertile and favourable climate, and has historically been a net exporter of food. In 2022, the agricultural sector earned a record export value of 53.22 billion USD, including a trade surplus of 8.5 billion USD.
However, growing domestic demand is now contributing to the country’s own food manufacturing and processing industry. As income levels across the country rise, so does domestic consumption, which is reflected in the growing demand for food services, and high-quality agricultural products.
Vietnam’s growing middle class, which is expected to account for around 40% of the population by 2030, is becoming a major driver of the food industry’s growth.
The article cited Statista's figures that show in 2021, the food and beverage (F&B) manufacturing industry contributed 17 billion USD to the country’s GDP and created jobs for three million people. Meanwhile, the food service industry is expected to record a compound annual growth rate (CAGR) of 8.5% between 2022 and 2027, with a growing trend toward dining out.
It said there are advantages for EU firms investing in Vietnam’s food processing industry, one of which is the EU-Vietnam free trade agreement (EVFTA), which will, over the course of the next 10 years, see the elimination of almost all import duties between Vietnam and the bloc.
The EVFTA significantly improves the prospects for bilateral agri-food trade, which would see an increase in the availability of both specialty Vietnamese products in the EU and European products in Vietnam.
A notable aspect of the EVFTA is the inclusion of geographical indication (GI) for certain food products. The EVFTA automatically recognizes the GI of 39 Vietnamese food products and 169 European products. This will help consumers in both markets recognize the authenticity of the products and provide a leg-up for companies when it comes to marketing their products in the respective markets.
Secondly, demand for high-quality food products. EU investors may also be able to capitalize on the growing taste for high-end, high-quality, and organic products in Vietnam. In the food service industry, consumers are keen to explore new cuisines and ingredients, while niche high-end segments present opportunities for the introduction of specialty products, such as European wines, cheeses, and processed meats.
Thirdly, Vietnam shows a robust food processing infrastructure. In addition, the relatively low labour cost in Vietnam makes it a competitive option for the location or relocation of manufacturing and processing facilities.
The article affirmed that Vietnam’s food processing industry is increasingly becoming a magnet for foreign investment, noting that the fast pace of development and strong growth prospects have already pulled in many foreign companies and fostered the growth of a range of domestic producers. Vietnamese-foreign joint ventures, and mergers and acquisitions (M&As) have also increased in number in recent years.
Vietnamese lychee, longan eye bigger market share in Singapore
The Vietnamese Trade Office in Singapore is working to promote the export of Vietnamese fruits, particularly longan and lychee, to Singapore.
Accordingly, a series of activities, including the Vietnamese Goods Week programme, as well as business networking and lychee testing events, have taken place in the island nation.
Further support from the office is also available for any Vietnamese localities and enterprises with intention to export fresh lychee and longan to the market.
As per data from the Singaporean business administration, last year, the country spent 6.78 million Singapore dollars (US$5.02 million) and 4.6 million Singapore dollars on importing fresh lychee and longan, respectively. Of the sums, shipments of the two fruits from Viet Nam were worth 43,000 Singapore dollars and 4,000 Singapore dollars.
Viet Nam's lychee and longan have so far entered many demanding markets such as Japan, the Republic of Korea, and Australia. With their quality, brand, and potential, they see ample room to gain a foothold in Singapore.
State budget revenues from export-import down 18% in five months
The State budget's revenues from export-import activities hit over VND152.94 trillion (US$6.5 billion) in the first five months of this year, making up 36 per cent of the estimate, down 18 per cent year on year, the General Department of Vietnam Customs (GDVC) has reported.
During the period, the country's total export-import value was estimated at $262.54 billion, down 14.7 per cent year-on-year. Of which, the export turnover reached $136.17 billion while the import value was $126.37 billion, down 11.6 per cent and 17.9 per cent, respectively.
In May, the customs sector only collected more than VND30 trillion, marking a month-on-month decrease of 6.23 per cent.
The GDVC’s Export-Import Tax Department attributed the decrease to the fall in the taxable import value of certain items, such as completely built-up automobile, iron and steel, mobile phones and components.
For the first time, Viet Nam had witnessed a higher number of temporary and permanent business withdrawals from the market than the number of enterprises joining or re-entering the market. The global supply chain continued to face the risk of disruption and fragmentation, leading to various consequences for export-import activities and economic growth.
Major economies that are importers of Vietnamese goods, such as the US and the European Union (EU), reduced their purchasing targets for conventional and luxury products, resulting in a decrease in orders, particularly in sectors such as apparel, footwear, furniture manufacturing, metal production.
This year, the GDVC was assigned by the National Assembly to collect VND425 trillion (over $18 billion) for the State budget, providing that the country's GDP growth will hit 6-6.5 per cent, crude oil price reaches $70 per barrel, and export and import turnover rises by 8-9 per cent and 7-8 per cent, respectively.
State budget collection in the January-May period was estimated at over VND769.6 trillion ($32.75 billion), equivalent to 47.5 per cent of the estimates for the whole year, the Ministry of Finance reported.
According to the ministry, although the domestic revenue in the reviewed period was quite good compared to the estimates, the monthly figure tended to decrease as the January collection reached 14.7 per cent of the estimate, February 7.7 per cent, March 8.9 per cent, April 9.9 per cent, and May 6.4 per cent. The domestic collection in the first five months was equal to 97.1 per cent of that recorded in the same period last year.
The ministry said 17 out of the 63 provinces and centrally-run cities recorded State budget revenue topping 48 per cent of this year’s targets.
Thirteen localities saw the collection higher than that in the same period of 2022, and 50 others were lower.
Meanwhile, VND653.1 trillion from the State budget was spent in the period, representing 31.5 per cent of this year’s plan, and rising by 10.9 per cent year-on-year, statistics show.
The finance ministry said expenditures in the January – May period were performed as planned, meeting demand for socio-economic development, defence and security, state management, debt repayment, and implementation of social security tasks.
Building material industry in a jam amid stagnant property market
Speeding up the disbursement of public investment and unfreezing the real estate market are pressing issues to save the building material industry, which was in a jam with many enterprises on the verge of bankruptcy.
At a conference on roadblocks and solutions to the building material market held late last week in Ha Noi by Viet Nam Institute for Building Materials and Eurowindow, eight associations said that the market was in a lot of difficulties as public investment and the property market, which were major sectors for consumption of building materials, were stagnant.
Le Quang Hung, chairman of the Viet Nam Concrete Association, said that the real estate market was frozen with dramatic declines in new supply sources and market liquidity due to legal roadblocks and high lending interest rates are undermining the ability to buy a home.
Public investment, despite being an important growth driver, was being disbursed at a low rate. Statistics of the Ministry of Finance showed the disbursement rate reached only 14.7 per cent of the plan for this year, lower than the rate of 18.48 per cent in the same period last year. From the economic outlook, it would be difficult to witness a breakthrough in GDP growth in the second quarter of this year.
Dinh Quoc Thai, deputy chairman of the Viet Nam Steel Association, said that the production and sales of steel dropped strongly from the beginning of this year. Steel production was forecast to increase by 2-3 per cent this year over 2022 while the consumption market remained unpredictable.
According to Dinh Quang Huy, chairman of the Viet Nam Building Ceramic Association, the building ceramic industry was in decline from 2021, with the output falling by 30-35 per cent. Production maintained at only 50-60 per cent of the capacity, a big waste, he said.
Huy pointed out the stagnation of the property market was a major cause while the disruptions to supply chains caused by the COVID-19 pandemic also made exports difficult, adding that many enterprises were on the verge of bankruptcy.
Luong Duc Long, deputy chairman of the Viet Nam Cement Association, said that cement production had been on a decline since 2021 and has not seen any improvements since the beginning of this year. The cement industry also faced other difficulties, including increases in fuel prices, transportation fees and inventories.
Long said it was critical to promote housing development, especially social housing projects, urban areas and transport infrastructure projects to support the building material markets.
Associations agreed that speeding up public investment disbursement was an important solution. Associations also urged the early reduction of 2 per cent value-added tax which should be prolonged to 2024, and reductions of land fees and tax refunds to be sped up.
Pham Van Bac, director of the Building Materials Department under the Ministry of Construction, said economic recession caused a strong drop in the consumption of building materials. However, the output was about 10-30 per cent higher than the domestic demand, Bac said, urging enterprises to adjust their production plan based on the market demand.
In addition, enterprises should apply science and technology to lower costs and increase competitiveness, he said.
Science, technology plays an important role in socio- economic development
Science and technology has become indispensable to socio-economic development and digital transformation, Deputy Secretary of the HCM City Party Committee, Nguyen Ho Hai, has said.
Speaking at a seminar on "Promoting the role of science and technology to serve the city’s socio-economic development" held by the Department of Science and Technology late last week, he said HCM City’s four key industries (mechanical engineering, electronics - information technology, chemicals - rubber -plastics, and food processing) have high rate of adoption of science and technology, and it is increasing year after year.
The city’s agricultural sector is gradually shifting to high-tech farming and applying bio-technology in the production of seedlings and livestock breeds, which offer high economic efficiency and are in line with its urban agriculture orientation, he said.
The city strives to maintain its role as the country’s economic locomotive, taking the lead in implementing a new growth model by developing the digital, sharing and circular economies, he said.
To achieve the goals, it is necessary to create favourable conditions for research and application of technology in these fields, he said.
Nguyen Viet Dung, director of the city's Department of Science and Technology, said the tech sector still faces many challenges nowithstanding.
Investment in science and technology is still modest, with the spending rate, though higher than the national average, not being commensurate with the city’s development demand or matching global trends, he said.
Bui Thanh Luan, director of Hiep Phat Mechatronics Co., Ltd, said the Government has a number of policies offering preferential credit to firms, but technology enterprises have not been able to access loans.
They desperately need an industrial park or cluster dedicated to the sector to be able to receive support in terms of premises, administrative procedures and others, he said.
Firms need to invest more in research and development and innovation to succeed in the current competitive business environment, he said.
Prof. Dr. Nguyen Trong Hoai of the University of Economics in HCM City said the city needs to create an eco-system that promotes the transformation and development of existing industries and services towards efficiency and innovation associated with digital transformation and the digital economy.
The city also needs to gradually restructure its industrial parks, especially those near the city centre, to make them eco-friendly, he said, adding that they must be supplemented with an innovation eco-system.
Policy interest rate expected to further reduce in H2 2023
The State Bank of Vietnam (SBV) may further reduce its policy interest rate if the Fed’s monetary policy reverses in the second half of this year, according to analysts from VNDirect Securities Company.
The analysts also expect the average 12-month deposit interest rate will drop to 7 per cent per year in 2023.
Though deposit interest rates have decreased by 0.5-2 percentage points per year for all terms in recent months, especially after the SBV reduced its policy interest rates on March 15 and April 3 this year, lending interest rates have had a lower decrease compared to the reduction of deposit rates, except at State-owned banks, which has caused difficulties for many firms needing capital.
Ly Kim Chi, chairman of HCM City Food Association and vice president of HCM City Business Association, said with loan interest rates around 10 per cent per year, firms will struggle to recover. Therefore, she suggested that the SBV further reduce its policy interest rate by 0.5 percentage points to create conditions for banks to reduce lending rates.
According to banking expert Can Van Luc, net profit margin (NIM) of banks in 2022 was 3.5 per cent, higher than 3.2 per cent in 2021. In 2023, banks' NIM will likely return to the level of 2021. This year, both the Government and the SBV have requested commercial banks to reduce interest rates. Many commercial banks have deployed preferential interest rate loan packages to stimulate credit demand.
Explaining the current high lending interest rate, the SBV said the banking system is still the main capital provider for the economy. Viet Nam's economy depends mainly on bank credit capital with the credit-to-GDP ratio at the end of 2022 being 125.3 per cent while the capital demand for economic development is always high, which creates pressure on lending interest rates.
After the COVID-19 pandemic, the economy recovered so the capital demand for production and business increased, the banking system used the maximum amount of raised capital to provide capital for the economy. Currently, the gap between deposit and credit in Vietnamese dong is at VND167 trillion and the ratio of credit per deposit in the dong is at 101.4 per cent, slightly down from 102.3 per cent at the end of 2022.
The banking system mainly raises short-term capital (about 88 per cent of deposits have a term of 12 months or less), but it still has to meet the medium- and long-term lending needs (more than 52 per cent of the dong-denominated outstanding loans of the banking system is medium and long term). Therefore, it has put pressure on deposit rates.
Besides, Viet Nam deeply integrates into the global economy so fluctuations in the world's financial and currency markets have a strong and rapid impact on domestic interest rates and exchange rates. The world’s interest rate level increased in 2022 and remained at a high level in the first months of 2023. Major central banks also continue to implement the roadmap to tighten monetary policy.
In addition, domestic inflation pressure also affects interest rates. Average inflation in the first four months of 2023 was at 3.84 per cent and core inflation was at 4.9 per cent, while the inflation target for 2023 is 4.5 per cent.
Inflationary pressure makes people expect a positive real interest rate, so it is difficult for banks to reduce deposit rates, leading to banks’ high input costs. Therefore, raised capital of the whole industry as of April 27, 2023 only increased by 1.78 per cent, while the credit growth rate was 3.04 per cent, which makes it difficult for banks to cut lending interest rates.
Pham Chi Quang, director of the SBV’s Monetary Policy Department, said lending interest rate cut in the market was slower than that of deposits because banks had previously raised deposits at high interest rates. Besides, each bank has a different interest rate reduction roadmap depending on their cost of raised capital and financial strength.
According to the SBV, the lending interest rate is agreed upon by banks and the customer according to the market capital supply and demand and the customers’ credit level.
However, on the basis of macro-economic developments as well as domestic and foreign monetary markets, the SBV will study and control interest rates in accordance with the macro balance, inflation and monetary policy target. It will also encourage banks to implement cost-saving solutions to reduce lending interest rates in order to support firms and households to recover and develop production and business.
Open data and AI - the engine of economic growth
Data was the new, most important and inexhaustible input, a new driving force for transformation, economic development, and a new way to improve management capacity, said Nguyen Huy Dung, Deputy Minister of Information and Communications, at an international conference on open data and AI.
The Ministry of Information and Communications coordinated with the People's Committee of Thua Thien – Hue Province and the World Bank to organise an international conference on open data and AI for economic growth in Hue City on Thursday.
The conference aims to exchange and comment on the role of open data and the development trend of artificial intelligence (AI) in the world, thereby identifying challenges, proposing specific actions to develop open data, promote the development and application of AI to create a driving force for economic growth.
This year was the year of National Digital Data in Viet Nam, said Dung.
Currently, around the world, governments have realised that public data is a valuable resource and needs to be exploited effectively.
Opening and sharing data would help promote innovation, economic and social development as well as strengthen cooperation between the Government and businesses – people, said the Deputy Minister.
Firms call for measures to end delays in tax refunds
Firms are clamouring for tough measures to accelerate the pay-out of value-added tax (VAT) refunds to lift them out of financial hardship.
Thang Văn Thông, a representative from the Association of Vietnam Timber and Forest Products (VIFOREST), said delays in VAT refunds had driven scores of timber firms to the brink of bankruptcy. By 2023, delayed refunds in the sector had amounted to over VNĐ6 trillion (US$255 million).
Delays in tax refunds were running rampant because tax reimbursement requires proof of origin (P/O), which is difficult for timber firms to obtain given the multiple layers of sellers in the supply chain. Origin tracing is so complicated a task that if passed to the police, Thông said, it would take them around 15 years to complete.
And the situation is not better for manioc exporters, who are required to disclose their partners' identities to be eligible for VAT refunds. The rationale behind this requirement is to prevent bad exporters from using bogus identities to commit tax evasion.
Vietnam Chamber of Commerce and Industry (VCCI) believed that the P/O requirement is too burdensome for firms because they buy feedstock from multiple suppliers and it is not an easy feat to trace their timbers back to every single one of them.
According to a survey by the Private Economic Development Research Board (Board IV), about 51 per cent of the respondents said they were facing cash flow problems and 45 per cent were hampered by red tape.
The VIFOREST representative called for the abolishment of the legal document that requires P/O as a prerequisite for tax refunds. He suggested firms be eligible for tax reimbursement upon entering into a commercial contract.
Board IV urged tax authorities to accelerate the payment of tax refunds to free up money for firms. The board also suggested exporters be tax-refunded for a batch of products within three months from the date they export the batch.
VCCI Vice President Hoàng Quang Phòng said a delay of two to three years in tax refunds would put many firms out of business. He suggested firms be tax-reimbursed for a transaction as soon as the transaction is verified by the authorities.
Trương Thanh Đức, Director of ANVI Law Firm, said the current procedures for tax refunds are cumbersome because it takes at least one to two years for firms to get reimbursed from tax authorities.
He called for an ex-post approach to tax refunds to improve firms' cash flow. His suggestion goes as follows: all firms will be immediately tax-refunded and only those with suspicious activities will get their refunds reviewed by tax authorities.
Trần Đình Thiên, former head of Vietnam Institute of Economics, shared Phòng's view. He called for simplified procedures for tax refunds to help firms get their money back from the taxman more easily.
In late May, Prime Minister asked Ministry of Finance to accelerate the pay-out of tax refunds to ease firms' financial problems. He said: "Ministry of Finance should chase up tax refunds to help firms and individuals".
"Energy-saving" equipment rampant online during summer's power shortage
As people and businesses across the country try to save energy due to power shortages, advertisements for devices that claim to reduce nearly half of a household’s usual electricity consumption are rampant on the Internet but their effectiveness remains questionable.
It is easy to find advertising posts selling energy-saving equipment on social networking and e-commerce platforms that are said to reduce up to 40 per cent of electricity bills per month, and that the seller will refund in full if the devices are inefficient.
In addition to saving electricity, some devices are supposed to prevent lightning strikes, helping ensure the safety of the whole family's electrical system.
The user instructions is to simply plug the device into any electrical outlet in the house, preferably near appliances that use large capacity and are constantly in operation such as air conditioners or refrigerators.
This small-sized additional equipment will then optimise the capacity of the main appliances, said the sellers.
Advertisers added that the principle of these energy-saving devices is based on harmonic filtering, thereby, reducing power loss.
Consumers can easily feel lost in the "matrix" of energy-saving products, with numerous different models, types, and origins. The selling price of these products ranges from a few hundred thousand to a million Vietnamese đồng each.
In the hope of reducing the amount of electricity use and cost during the summer, many people have bought the product.
Nguyễn Danh T., a customer in Đống Đa District, Hà Nội, said that the result disappointed him.
Trần Trọng Tráng, an industrial and civil electrical engineer in Hà Đông District, also bought one of the “energy-saving” devices to test out for himself and confirmed that it has no use in saving electricity as advertised.
In the face of the boom in so-called energy-saving devices, Vietnam Electricity (EVN) has issued a warning to consumers against these products.
An experiment was carried out by the Central Power Electronics Measurement Equipment Manufacturing Centre and the Central Power Corporation’s Electricity Purchase Supervisory Board on the “electricity saving box” sold on the market.
EVN said in an announcement on its official website: “After the experiment, the device when used can reduce the magnitude of the current through the load, but cannot reduce the amount of power consumed, leading to an increase in power consumption.”
The equipment has been falsely advertised for sale and deceiving customers, the announcement said.
According to Dr Trần Văn Thịnh, former head of the Electrical Engineering Department at Hanoi University of Science and Technology, these devices use compensation capacitors, which are prone to overheating, short circuits and explosions.
These devices can damage household electrical equipment by making the current unstable.
If there is equipment that can directly interfere and cause the electric metre to slow down, it also means that the person using the device is violating regulations on electricity use and can be subjected to penalties according to the laws.
Dr Nguyễn Bách Phúc, head of the Electric, Electronics and Informatics Institute in HCM City said that this device can save energy at a minuscule level, having virtually no effect on the household’s electricity system.
Pending VAT refunds take toll on wood businesses
Pending VAT refunds are having a negative impact on wood processing and exporting businesses, according to the Vietnam Timber and Forest Product Association (VIFORES).
Over VND6,100 billion of value-added tax (VAT) remains unreimbursed, causing financial difficulties for these enterprises. Delays in VAT refunds have led to a lack of capital for production maintenance and the inability to ensure adequate income for workers, reported the Vietnam News Agency.
Among the outstanding VAT refunds, wood chip exporters are awaiting over VND4,000 billion, while plywood and wood pellet exporters have not received VAT refunds amounting to VND500 billion and VND1,600 billion, respectively.
One of the reasons for these delays is the complexity of tracing the origin of wood due to impractical regulations, considering the involvement of multiple intermediaries in the supply chain, according to an enterprise.
In response, VIFORES has requested the Ministry of Finance and the General Department of Taxation to review regulatory bottlenecks, aiming to eliminate obstacles for enterprises and facilitate their business operations.
VIFORES has also suggested excluding good products from the list of high-risk goods subject to VAT refund restrictions, particularly replanted-forest wood, which complies with the Forestry Law.
The wood and wood product exports for the first five months of the year reached US$4.7 billion, marking a 30% decrease compared to the same period last year, according to VIFORES.
Source: VNA/SGT/VNS/VOV/Dtinews/SGGP/VGP/Hanoitimes
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