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New decree lifts sentiment, extends market rally



Investors at VNDirect Securities Corporation (HoSE: VND). The brokerage shares rose 2.6 per cent on Monday. — Photo

HÀ NỘI — Vietnamese shares rebounded on Monday as market sentiment remained positive, following a new decree released last week to cut tax for virus-hit businesses.

The benchmark VN-Index on the Hồ Chí Minh Stock Exchange (HoSE) was up 0.47 per cent to 912.50 points, bouncing back from a two-day decline of total 0.46 per cent.

The VN-Index gained a total of 0.81 per cent last week.

Prime Minister Nguyễn Xuân Phúc on Friday officially issued Decree 114/2020/NĐ-CP to cut income tax for businesses that report total revenue of less than VNĐ200 billion (US$8.64 million) in 2020.

Such information helped lifted investors’ confidence in local stocks.

Large-cap tracker VN30-Index rose 1.01 per cent to 863.31 points with 16 of the 30 largest stocks by market value and trading liquidity rising.

The mid-cap and small-cap trackers on HoSE on Monday increased by 0.79 per cent and 0.67 per cent, respectively.

Banks, securities companies and retailers were the driving factor of the stock market on Monday.

The three sector indices rose 1.2 per cent, 2.2 per cent and 2.4 per cent, respectively, according to

Large-cap stocks in the three industries all grew, such as retail firm Mobile World Investment (MWG), Vietinbank (CTG), VPBank (VPB), Techcombank (TCB), SSI Securities (SSI), HCM City Securities (HCM), and VNDirect Securities (VND).

In the banking sector, Sacombank (STB) jumped 3.8 per cent on Monday and the stock was also the most active on the southern bourse with nearly 29 million shares being traded.

Sacombank shares have soared total 36.6 per cent since July 31 on speculations that Trường Hải Auto Corporation (Thaco) will soon buy the bank’s stake.

Though the two sides have denied such information, investors still hope that the deal will be realised someday, thus extending the bank’s stock rally, according to Vietinbank Securities Co’s analysis director Đào Tuấn Trung.

On the negative side, foreign investors remained net sellers. They sold a net value of nearly VNĐ390 billion, up nearly 191 per cent from Friday’s figure.

“Domestic purchasing power is backing up the market against the strong, prolonged net-selling by foreign investors,” Thành Công Securities Co (TCSC) said in its daily report.

“That proves investors are highly expecting the market will keep increasing in the near future,” the company said. “The VN-Index may quickly touch 920-930 points in the coming days.”

On the Hà Nội Stock Exchange, the HNX-Index advanced 1.22 per cent to 133.12 points on Monday.

The northern market index gained a total of nearly 1.8 per cent last week.

Nearly 480 million shares were traded on the two exchanges, worth VNĐ8.06 trillion ($348 million). —



Vietnam fifth in global trade connectedness



Vietnam fifth in global trade connectedness

The Tan Cang – Cai Mep International Port in Ba Ria-Vung Tau, southern Vietnam.Photo by Shutterstock/Hien Phung Thu.

Vietnam ranked fifth globally last year in terms of trade connectedness, up five places from 2017, according to a recent report by logistics giant DHL.

With a score of 83 points, Vietnam ranked behind Singapore (92), the Netherlands (92), Belgium (91) and Malaysia (84).

Most countries and territories in the top 10 saw their ranks drop or remain unchanged. Trade is one of four pillars of the DHL Global Connectedness Index 2020, the others being capital, information and people. These pillars are measured by the quantity of traded goods, the amount of international investment and the number of migrants.

The overall ranking of Vietnam in the global connectedness index was 38 among 169 countries and territories, up one place from 2017. “Vietnam has become a serious competitor to China not only in textiles manufacturing, but also increasingly in high tech products,” the report said.

Shoeib Reza Choudhury, CEO of DHL Express Vietnam, said Vietnam was one of the top destinations of companies seeking to diversify their manufacturing, drawn by the young labor force, trade pacts and social stability.

Moving to Vietnam is most popular among hi-tech forms and garment companies, he added. The DHL Global Connectedness Index is compiled every two years to measure the state of globalization in 169 countries and territories.


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Businesses complain about new CIT payment regulation



Under the new regulation, by the end of the third quarter, enterprises have to estimate the amounts of tax of the fourth quarter and pay the amounts.

Some of the Decree 126 provisions effective on December 5 related to the Law on Tax Administration, say that the total amount of corporate income tax (CIT) that enterprises temporarily pay in the first three quarters of the year must not be lower than 75 percent of the CIT amounts they have to pay for the whole year.

Businesses complain about new CIT payment regulation

This means that by the end of the third quarter, enterprises have to estimate the amounts of tax of the fourth quarter and pay the amounts instead of the end of the fourth quarter as previously applied.

Dang Ngoc Minh, deputy general of the General Department of Taxation (GDT), told the press on the sidelines of the dialogue between enterprises and customs and taxation agencies held some days ago, that the state budget has a shortage and the purpose of the budget collection is to get money to pay for state management operations, especially to allocate to provinces that cannot cover expenses.

In other words, the budget collection progress plays a very important role in the operations of many localities.

Asked if GDT has received complaints about the new regulation from enterprises, he said these are just a few enterprises and they don’t represent the whole business community.

The official stressed that the tax collection must be done in reference to the local budget management and the benefits of society.

This means that despite the complaints, GDT is still determined to collect tax as planned.

What will happen if enterprises are fined not because they did not pay tax, but just because they did not anticipate the sharp increase in the amount of tax they would have to pay in Q4?

In replay, GDT said it believes that this may happen but not regularly, because enterprises can foresee their business performance.

But enterprises disagreed with GDT about the uncommon number of cases that saw revenue soaring unexpectedly in Q4.

“GDT always sets estimates on state budget collections every year. Will it dare to affirm that it can collect 75 percent of the total budget collections of the whole year by the end of Q3?” a businessman said. “Will it be fined if it fails to do this?”

The businessman went on to explain that no business dares to set revenue targets quarterly, but they only dare set for the whole year.

“Everyone wants to fulfill yearly business plans, but unexpected things always occur. Businesses were preparing for the year-end sale season, when new Covid-19 infections were discovered in HCM City,” he said.

According to GDT, the Decree 126 will take place on December 5. This means that enterprises, seriously affected by Covid-19, will not be affected by the new regulation this year, because the deadline for temporary tax payment was the last day of October, or Q3.

“Who dares to say he will make profit this Tet sale season? With the regulation, it is still unclear which businesses will take a loss and which will make a profit, but all of them now have to make temporary tax payments,” he said.

When the Decree 20 dated in 2017 on the tax administration applied to enterprises with transactions with related parties facing businesses’ complaints, the Prime Minister has repeatedly requested to amend the decree. It took three years to do this.

The decree covers only 8,000 businesses, 83 percent of which are foreign invested enterprises and 17 percent Vietnamese enterprises.

Meanwhile, the number of businesses to be affected by Decree 126 is much higher and the businesses are from many different economic sectors which face difficulties.

The regulation will have a big impact on enterprises and lead to serious consequences, even if it is amended later.

The director of an enterprise warned that businesses that have been hit hard by Covid-19 will become even worse because of the new regulation on temporary tax payment.

“You don’t have money, but you still have to pay taxes in advance, based on the estimated profit you may make in the future. It is just like taxing dreams,” he commented.

Meanwhile, according to GDT, the Decree 126 will take place on December 5. This means that enterprises, seriously affected by Covid-19, will not be affected by the new regulation this year, because the deadline for temporary tax payment was the last day of October, or Q3.

So, enterprises will only have to make temporary tax payment in accordance with Decree 126 by the end of October 2021. 

Duy Anh


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Vietnam says Oct. CPI up 2.47 pct on year

Vietnam estimated its consumer price index for October jumped 2.47 percent from a year earlier.



The General Statistics Office said in a report on Thursday that average inflation in the first ten months of this year rose 3.71 percent over the same period of last year.

October inflation slightly rise 0.09 percent against the previous month and December of 2019, the lowest growing rate since 2016.  

Increased prices in education sector and hike food prices due to floods in central region were the main driver of the month’s inflation.

Core inflation in October increased by 0.07 percent over the previous month and by 1.88 percent over the same period last year.

Average core inflation in the first 10 months of 2020 increased by 2.52 percent over the same period in 2019.

The government’s GDP growth target for this year is below 3 percent.

► Vietnam targets 2021 economic growth at 6 percent


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