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Vietnam approves 30% CIT reduction

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The Government has decided to implement a 30 per cent corporate income tax (CIT) cut for certain businesses for the 2020 financial year.

Vietnam approves 30% CIT reduction
Businesses with income of no more than VND200 billion (US$8.58 million) a year are eligible for 30 per cent corporate income tax reduction this year. — Photo laodong.vn

Vietnam’s National Assembly on June 19 ratified the Government’s proposal to cut corporate income tax by 30 per cent.

According to Decree No 114/2020/NĐ-CP, all enterprises, co-operatives, agencies and organisations established under Vietnamese law and generating income of no more than VND200 billion (US$8.58 million) a year are eligible. The 30 per cent reduction is only applicable to income generated in 2020.

In cases of a newly established enterprise or those which have changed their form, ownership, or have undergone consolidation, merger, acquisition, dissolution or bankruptcy in a month, the operation period shall be counted for the full month.

In cases where the enterprise expects total revenue in the 2020 corporate income tax period to not exceed VND200 billion they shall determine the quarterly temporary payment equal to 70 per cent of the payable CIT amount of the quarter.

Recently, the Board for Private Economic Development Research proposed a 30 per cent CIT reduction for all businesses in 2020, instead of only applying to businesses with total revenue of less than VND200 billion.

The board also proposed to reduce value-added tax from the current 10 per cent to 5 per cent with an aim to stimulate consumption.

Bui Thi Khanh, a resident from Hoa Binh Province, said that the VAT reduction would be a huge incentive at a time of declining income due to the effects of the COVID-19 pandemic.

With a debt of over VND200 million, Khanh was forced to leave her hometown and come to Hanoi to find a job. The job was unstable while expenses for everyday life remain unchanged. The price difference of only a few thousand dong is significant.

For most consumers, if VAT is reduced by 5 per cent, it will help as their income drops.

When consumers shop more, they will help businesses, thereby stimulating production. Therefore, the VAT reduction is considered a supportive policy that can directly affect all in society, especially those with low incomes.

However, according to tax experts, there are currently 14 groups of goods that enjoy a 5 per cent VAT incentive. The simultaneous reduction of VAT to 5 per cent would equalise all goods and services, not creating the necessary priority for goods that need to be encouraged. VAT is currently the largest source of revenue among all taxes. If the Government chooses the option to reduce VAT to stimulate demand, there would be more pressure on the State budget.

Tax experts also said businesses have strategies in accordance with the current market. For example, with airlines or hotels, although VAT has not been reduced, the price of air tickets and room rates have fallen.

Nguyen Thi Cuc, Chairwoman of Vietnam Tax Consulting Association, said it’s not just a tax reduction, but will also decrease the price. Tax is part of the internal structure. In the case of a strong market, the price will naturally go up. Therefore, a tax reduction is not exactly a price reduction.

Currently, the basic VAT rate is 10 per cent while the preferential rate is 5 per cent in Vietnam. The level is still lower than the global average. I think we should find other measures and not reduce VAT to stimulate consumption.  VNS

Source: https://vietnamnet.vn/en/business/vietnam-approves-30-cit-reduction-678210.html

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INCHAM to hold seminar on India-Vietnam trade and investments

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INCHAM and the Saigon Times Group sign a memorandum of understanding on sharing information about business opportunities between India and Vietnam. INCHAM will organize a seminar on trade and investments between India and Vietnam in HCMC on November 2 – PHOTO: COURTESY OF INCHAM

HCMC – The Indian Business Chamber in Vietnam (INCHAM) will organize a seminar on trade and investments between India and Vietnam in HCMC on November 2.

The highlights of the “INCHAM Business Outlook Seminar Series India-Vietnam Trade & Investments” will include “a UN assessment of the economic impact of Covid-19 on Vietnam: emerging global and regional opportunities for it to build-forward-better”, “Vietnam-India trade and investment relationship: status and outlook” and “Preserving the past and fortifying the future: current situation, perspectives from India-Vietnam”.

The seminar will also focus on investment opportunities in Vietnam for Indians and opportunities and challenges in Vietnam’s renewable energy sector.

Speakers at the seminar will include Dr. Madan Mohan Sethi, Consul General of India in HCMC; Kamal Malhotra, UN resident coordinator in Vietnam; Tran Thi Hai Yen, director of the Investment Promotion Center-South Vietnam; Nguyen Thanh Binh, director of the Trade Information Center, Vietnam Chamber of Commerce and Industry-HCMC; Anup Kumar Dave, general director of Kirby South East Asia Co., Ltd.; Hareesha Narayana Shirankallu, director of engineering at Robert Bosch Engineering and Business Solutions Vietnam Co., Ltd. and Nguyen Xuan Huy, professor of geology and petroleum engineering.

The event will also feature Kartick Narayan, founder and CEO of Kilo; Abhay Sinha, deputy director general of the Services Export Promotion Council-India; Sanjay Kumar, executive director-cum-secretary of the Carpet Export Promotion Council-India; Murali Krishna Surampudi, joint director of the Pharmaceuticals Export Promotion Council of India and R. Selvam, executive director of the Council for Leather Exports-India.

The “INCHAM Business Outlook Seminar Series India-Vietnam Trade & Investments” will take place from 8 a.m. to 4 p.m. at the Sheraton Saigon Hotel & Towers in District 1.

Admission is free for INCHAM members, VND600,000 for members of other chambers and VND750,000 for non-members.

To register, contact the INCHAM via email [email protected] or hotline 0911 418 132 or register online through https://forms.gle/aMQYdfSQFvYNDX1EA by Wednesday, October 28.

The Indian Business Chamber in Vietnam is a non-profit organization, licensed and established in January 1999 with the objective of strengthening ties between Indian businesses and Vietnamese authorities to promote economic and business relations between Vietnam and India and also to be the focal point of the Indian community in Vietnam.

INCHAM was established in HCMC, which is the commercial hub of Vietnam. INCHAM established its Chapter in Hanoi in October 1999 to further widen and strengthen its presence in Vietnam.

Source: https://english.thesaigontimes.vn/79120/incham-to-hold-seminar-on-india-vietnam-trade-and-investments.html

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Businesses register to implement tourism safety criteria

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Two foreign tourists receive free face masks from a volunteer in front of the HCMC Central Post Office in this file photo – PHOTO: VNA

HCMC – HCMC has kicked off a tourism stimulus program, wherein enterprises operating in the tourism industry will have to register to fulfill three criteria, including safety for tourists, in line with the municipal tourism authority’s requirements.

The program, which will last until the end of 2021, will focus on safety, attractiveness and competitive prices, with safety being given the most importance by the authorities.

“Hundreds of businesses have completed the registration. We will make a list of safe businesses and tourist destinations that will be added to the digital safe tourism map,” noted Nguyen Thi Anh Hoa, director of the HCMC Tourism Department, at the HCMC Tourism Stimulus Conference that took place on October 23.

Nguyen Thi Khanh, vice chairwoman of the HCMC Tourism Association, pointed out that having a good set of tourism safety criteria is important to make the tourism stimulus program more effective.

She observed that the tourism market has also seen a positive response as guests who had previously canceled their tours due to the Covid-19 outbreak have registered to travel once again.

With regard to the stimulus program, from now until the end of 2021, HCMC will introduce 200 tourism products, 20% of which will be new. For example, there will be half-day city tours around HCMC comprising traveling along the Saigon River or rowing a boat on the Nhieu Loc-Thi Nghe canal.

As part of the program, 30 hotels will offer discounts from 20 to 60% and more than 10 will offer discounts of 15 to 20%.

Source: https://english.thesaigontimes.vn/79119/businesses-register-to-implement-tourism-safety-criteria.html

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Trade remedies imposed on Vietnamese goods surge

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Workers process seafood for export in the Mekong Delta city of Can Tho. Seafood is one of Vietnam’s products subject to the largest number of trade remedies – PHOTO: TRUNG CHANH

HCMC – Vietnam was among four countries worldwide subject to the largest number of trade remedies from January to September 2020, according to the Ministry of Industry and Trade.

The number of trade remedies imposed on Vietnamese goods in nine months doubled that of last year, with the most affected products being steel, aluminum, seafood, wood and construction materials, which are also the country’s key export products.

The Ministry of Industry and Trade is keeping a close watch on the export of key products, especially those that are being investigated or subject to trade remedies. The ministry has published a list of 13 at-risk products on its website and the list will be updated regularly.

As of late September, the ministry has reported 193 trade remedies on Vietnamese goods, including 108 anti-dumping cases, 22 anti-subsidy cases, 23 tax evasion cases and 40 safeguard cases. Sixty-two percent of the cases were from the United States, the EU, India, Canada and Australia.

Speaking to Thanh Nien newspaper, director of the Trade Remedies Authority of Vietnam Trieu Dung noted that trade remedies have affected Vietnamese goods worth some US$12 billion since the first case was reported in 2003. Vietnam has appealed successfully in 65 of the cases.

Dung stated that the number of trade remedies imposed on Vietnamese goods would definitely increase in the time to come. The Trade Remedies Authority has worked with 12 trade associations to help Vietnamese businesses avoid or resolve problems related to trade remedies.

According to an international trade expert, the increase in the number of trade remedies is understandable in the context of the rising protectionism worldwide and it is also proportional to Vietnam’s import and export revenue.

“When a country opens a safeguard investigation into a Vietnamese product, it means Vietnam’s increasing exports of the product are putting pressure on the country’s domestic production,” he explained.

Trade remedies are a tool to protect domestic production and, as such, Vietnam is imposing trade remedies on the fertilizers, steel and other products of several countries.

Source: https://english.thesaigontimes.vn/79115/trade-remedies-imposed-on-vietnamese-goods-surge-.html

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