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IMF trims Vietnam GDP growth forecast to 1.6% in 2020



The country would remain the only one with positive growth among five major economies in ASEAN, and its economic growth would rebound to 6.7% in 2021.

The International Monetary Fund (IMF) has revised down its forecast for Vietnam’s GDP growth to 1.6% in 2020 from a previous estimate of 2.7% in June.

Vietnam, however, remains the only country among major economies in ASEAN – 5 (Thailand, Malaysia, Indonesia, the Philippines, and Vietnam) expected to deliver positive growth this year.

Notably, the IMF predicted the Philippines to have the biggest GDP decline this year among its regional peers, with a contraction of 8.3%, compared to a 3.6% decline projected in June. It is followed by Thailand (-7.1%), Malaysia (-6%), and Indonesia (-1.5%).

Overall, ASEAN-5 economies are expected to contract by 3.4% in 2020, before expanding 6.2% in 2021.

For next year, IMF expected Malaysia to record the fastest growth with 7.8%, the Philippines to be in the second place with 7.4%, Vietnam in third with 6.7%, followed by Indonesia (6,1%) and Thailand (4%).

In the first nine months of 2020, Vietnam’s GDP growth was estimated at 2.12%, the lowest 9-month growth rate in the past 10 years amid the Covid-19 crisis, according to official data.

For this year, the Vietnamese government targets economic growth of 2% in normal conditions and 2.5% if favorable factors emerge.

Meanwhile, the global economy is projected to contract 4.4% in 2020, 0.8 percentage points above IMF’s forecast in June.

The agency attributed stronger projection for 2020 to the upward impetus from better-than-anticipated second quarter GDP outturns (mostly in advanced economies) versus the downdraft from persistent social distancing and stalled reopenings in the second half of the year.

With such a momentum, the IMF expected the world’s economy to strengthen gradually in 2021.

“The recovery is likely to be characterized by persistent social distancing until health risks are addressed—and countries may have to again tighten mitigation measures depending on the spread of the virus,” it said.

The IMF expected global growth to reach 5.2% in 2021, or 0.2 percentage points lower than its forecast in June. Hanoitimes

Ngoc Thuy



Vietnam casts watchful eye on tech giants’ cross-border cash flows



Vietnam’s General Department of Taxation is asking for cooperation from commercial banks in monitoring the cash flows of big tech corporations in Vietnam in order to enforce tax responsibilities.

A statement regarding the issue was made by Dang Ngoc Minh, deputy director of the General Department of Taxation, on Tuesday during a press conference to introduce Decree 126/2020, which provides further guidance on the implementation of the 2019 Law on Tax Administration.

According to Minh, the Ministry of Finance is drafting a circular to guide cross-border e-commerce entities through the completion of their tax obligations in Vietnam.

Minh also stated that the taxman is already working with consulting and auditing firms to ensure big tech corporations, namely Google, Netflix, Amazon, and Facebook, are properly addressing their tax liabilities.

Tax implications

Minh clarified that the tax authority will provide affected corporations with guidance on their tax and administrative responsibilities.

Generally speaking, private entities are subject to both business income tax and value-added tax for cross-border services provided to Vietnamese customers.

The General Department of Taxation has called several meetings with representatives of Netflix to assess the fulfillment of the video platform’s tax responsibilities.

According to Minh, the tax agency has plans to probe and recalculate Netflix’s tax filings for its business in Vietnam. It also plans to coordinate a probe with local banks into the firm’s cash flow statements.  

In 2018, the Vietnamese tax body collected around VND800 billion (US$34.6 million) from the cross-border e-commerce activities of big tech firms.

That number increased to VND1 trillion ($43.3 million) in 2019 and once again hit VND1 trillion between January and November this year.

The overall sum of money collected by Vietnam’s tax authority, however, fell short of what authorities say corresponds to the actual amount being shelled out by Vietnamese users for cross-border services.

Tax authorities have thus requested cooperation from local banks in monitoring cash flows from e-commerce services.

Concerns for individual taxpayers

During the media briefing, Minh also addressed uncertainties about whether the new regulation requires banks to provide the names and bank accounts of all taxpayers for tax authorities.

He confirmed that the taxman has no plans to solicit taxpayer information from banks.

In reality, the tax agency only works with banks to administrate the incomes of individuals who benefit from big tech firms’ partnership programs, namely the Facebook Creator Program and the YouTube Partner Program.

Individual identities are only obtained from banks if they are suspected of tax-related misconduct.

“Upon detecting foreign cash flows accruing in the accounts of domestic individuals and entities, the tax body has the authority to require banks to provide transaction details,” Minh stressed.

The official also revealed that the General Department of Taxation will meet with the State Bank of Vietnam to clear up some of the regulations’ murkier details.

As per the current orientation, banks will provide tax authorities with the names and accounts of taxpayers with more than two sources of income, including taxpayers who settle income tax without the aid of their employers.

Other issues, namely data storage and protection, will be discussed and settled between the two state agencies.

The guiding circular for the implementation of this regulation will be published in the near future.

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HCMC approves 1st bus rapid transit route



HCMC approves 1st bus rapid transit route

A bus is stuck in traffic in Ho Chi Minh City. Photo by VnExpress/Huu Khoa.

HCMC has given the green light for its first bus rapid transit line at a cost of VND3.27 trillion ($142 million) and to be completed by 2023.

Green bus route 1 will run 26 kilometers through Districts 1, 2, 5, 6, 7, Binh Tan, and Binh Chanh in a dedicated lane at an average speed of 60 kilometers per hour.

It will have a fleet of 42 buses with a capacity of 60-72 passengers, 28 stations and eight parking lots for personal vehicles.

The city will build footbridges at several places for people to access the stations. The buses will have a smart ticket system using electronic cards and smartphones.

Of its $142 million cost, 87 percent will be borrowed from the World Bank.

It is one of six routes planned to reduce routine congestion in a city that lacks efficient public transport to serve its 13 million residents.


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China-ASEAN Expo opens, featuring digital economy, RCEP



The 17th China-ASEAN Expo and China-ASEAN Business and Investment Summit kicked off on Friday, highlighting booming digital economy cooperation and the implementation of a recently signed major trade pact.

Chinese President Xi Jinping called for cultivating a closer community with a shared future for China and the Association of Southeast Asian Nations (ASEAN) when addressing via video the opening ceremony.

Chinese President Xi Jinping addresses the opening ceremony of the 17th China-ASEAN Expo and China-ASEAN Business and Investment Summit via video on Nov. 27, 2020. (Xinhua/Li Xueren)

This year’s expo aims to deepen cooperation in trade, the digital economy, science and technology, health, and other fields.

With an exhibition area of 104,000 square meters, the expo has 5,400 booths in Nanning, capital of south China’s Guangxi Zhuang Autonomous Region. More than 1,500 enterprises from home and abroad will participate virtually in the four-day event, according to the organizers.

The expo will also host 11 high-level forums and more than 160 economic and trade promotion activities.

China-ASEAN Expo opens, featuring digital economy, RCEP

Booming digital cooperation

This year is designated as the China-ASEAN Year of Digital Economy Cooperation. Strengthening digital economy cooperation was the common call of ASEAN leaders at the opening ceremony.

ASEAN’s digital economy is estimated to increase from 1.3 percent of the group’s GDP in 2015 to 8.5 percent in 2025, according to ASEAN Secretary-General Lim Jock Hoi, adding that China is leading the development of digital infrastructure and is an important partner of ASEAN in promoting the digital economy in the region.

This year’s expo also highlights the Regional Comprehensive Economic Partnership (RCEP), the world’s biggest trade pact, which was signed earlier this month by 15 Asia-Pacific countries including ASEAN’s 10 member states and China. It was a massive move for regional economic integration, multilateralism and free trade.

China-ASEAN Expo opens, featuring digital economy, RCEP

The signing ceremony of the Regional Comprehensive Economic Partnership (RCEP) agreement is held via video conference in Hanoi, Vietnam, Nov. 15, 2020. (VNA via Xinhua)

The expo features an exhibition area, and enterprises from RCEP countries including Japan, the Republic of Korea, Australia and New Zealand have participated in the event, according to Wang Lei, secretary-general of the expo’s secretariat.

High-level dialogue conducted during the expo will promote greater participation from RCEP members, said Wang, adding that the expo will help integrate the market advantages and resources of the 10 ASEAN members with the capital and technical advantages of other RCEP members.

“I believe that the RCEP will also provide a solid foundation for an open, inclusive, and rules-based global trade environment,” said Myanmar President U Win Myint at the expo’s opening ceremony.

Xu Ningning, executive president of the China-ASEAN Business Council, said that opening up the markets of the 15 countries to each other will bring about new changes and closer regional cooperation. 

(Source: Xinhua)


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