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Vietnam considers tightening import tax on e-commerce deliveries

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Vietnam considers tightening import tax on e-commerce deliveries

A person uses the app of an e-commerce platform. Photo by VnExpress/Quynh Trang


The Ministry of Finance is considering limiting the import of low-value packages through e-commerce platforms to close a suspected loophole.

It wants to issue a new decree to limit each organization or individual buyer to be free of import tax on four orders at most each month.

The proposal came amid the rising popularity of shopping on e-commerce platforms in Vietnam, with many products delivered directly from China.

Vietnam currently does not apply an import tax on packages with a value of VND1 million ($44) or lower delivered via postal and delivery services.

However, because there is no limit on the number of packages being sent, many buyers take advantage of this policy and split its goods into small packages to avoid tax, according to the Ministry of Finance.

In the first six months last year, Hanoi alone imported $1 billion worth of products via postal and delivery services. The value in June was five times that of January, according to the latest data from the Ministry of Finance.

A Hanoi company that imports products for Shopee and Lazada saw its value of imported products surging 50 times year-on-year to $70 million in the first quarter of 2021, the ministry said.

Vietnam’s e-commerce market has seen an average annual growth rate of 25-30 percent in the last five years, according to Vietnam E-commerce Association (VECOM).

Should the growth rate be maintained, Vietnam would rank third in e-commerce market size in Southeast Asia by 2025, behind Indonesia and Thailand.

Source: https://e.vnexpress.net/news/business/industries/vietnam-considers-tightening-import-tax-on-e-commerce-deliveries-4351052.html

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Vietnam trade to climb to new peak

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Vietnam trade to climb to new peak

A container ship is seen at Tan Cang Cai Mep Terminal in the southern province of Ba Ria-Vung Tau. Photo by VnExpress/Dang Khoa


Vietnam’s trade could reach a record high of $600 billion in 2021, the Ministry of Industry and Trade has said.

This would be 10 percent higher than last year as against a government target of 4-5 percent, it said.

It had reached $510 billion as of Oct. 15 with a marginal deficit.

Vietnam, which has been recording a trade surplus for years, has been suffering a deficit this year as social distancing and travel restrictions imposed to curb the spread of Covid-19 hurt exports.

So the final value would be dependent on curbing Covid-19 and recovering manufacturing and exports, the ministry said.

If there are no more major outbreaks in the remaining months and southern-based companies regain their growth momentum, the deficit could be wiped out and there could even be a surplus, it added.

Several large FDI plans announced recently seem to substantiate the ministry’s forecast.

South Korean electronics giant LG Display in August announced an additional investment of $1.4 billion in its manufacturing facility in Hai Phong this year.

Source: https://e.vnexpress.net/news/business/economy/vietnam-trade-to-climb-to-new-peak-4375836.html

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HDBank affirms position among top 5 prestigious banks in Việt Nam

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With its outstanding business results and accompanying the economy in overcoming the pandemic, HDBank affirms position among top five prestigious banks in Việt Nam. — Photo courtesy of the bank

HCM CITY — HDBank has once again been honoured as one of the most prestigious private institutions in the country by Vietnam Report, affirming its position as among the most dynamic banks in terms of growth.

The award was presented at the Vietnam Top 50 Public Companies (VIX50) in 2021 ceremony organised by Vietnam Report on October 21 in Hà Nội.

Techcombank, ACB, VPBank, and TPBank also won awards.

The awards were based on three criteria: financial capacity as shown in the latest year’s financial statements; communications prestige assessed by media coding method; and surveys of relevant stakeholders done in June 2021.

HDBank did well in all three criteria.

Its positive business results in the first six months of 2021 was a bright spot.

Overcoming the adverse impacts of the COVID-19 outbreak, HDBank achieved 82 per cent of its full-year profit target in the first nine months.

Its total assets as of September 30 were worth over VNĐ346 trillion (US$15.2 billion), up 26.7 per cent from a year earlier.

Return on equity (ROE) was 24 per cent compared to 21.1 per cent in September 2020. The capital adequacy ratio (CAR) and liquidity were maintained at high levels, with CAR (according to Basel II) at 13 per cent, far above the minimum requirement of 8 per cent.

The bank’s total operating income in the first three quarters topped VNĐ12.1 trillion ($532.3 million), 23.6 per cent up from the same period last year. Operating costs continued to be optimised with the cost to income ratio reduced to 39 per cent from 43.8 per cent a year earlier.

Its standalone and consolidated non-performing loan ratios were below 1 per cent and 1.4 per cent, both lower than in a year earlier.

Services continued to be its bright spot in the first nine months, as net income rose 88.6 per cent year-on-year.

Notably, net income from services for the parent bank more than tripled from the same period last year thanks to growth in the bancassurance and payments services segments.

This helped HDBank develop in a more comprehensive way, no longer depending on credit while minimising risks and improving the revenue structure in a sustainable manner.

In the first nine months of the year, HDBank actively undertook digital transformation to promptly meet the transaction needs of customers in the context of the pandemic.

To help prop up the economy, since the pandemic outbreak HDBank has earmarked over VNĐ42 trillion to support individual and corporate customers.

Besides preferential interest rates, the bank has also offered support in terms of waiver and reduction of various fees.

In August, it won the Best Bank and Best Digital Transformation Bank in Vietnam in 2021 awards at the Global Brand Award. —

Source: https://vietnamnews.vn/economy/1064713/hdbank-affirms-position-among-top-5-prestigious-banks-in-viet-nam.html

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Covid-19 pandemic and the goal of 1.3-1.5 million enterprises by 2025

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The target of having 1.3-1.5 million enterprises by 2025 may be difficult to achieve as many obstacles and the Covid-19 pandemic have affected business seriously. A strong recovery and reform program is needed to encourage Vietnamese businesses.

Một trận 'đạn pháo' và giấc mơ 1,3-1,5 triệu DN vào năm 2025

In early 2021, the Government assigned the Ministry of Planning and Investment to develop a resolution on enterprise development for the period of 2021-2025, with a vision to 2030, which targets 1.3-1.5 million enterprises by 2025.

According to the Vietnam General Statistics Office, by the end of 2020, the country had about active 810,000 enterprises. To achieve the target, Vietnam must have 100,000-150,000 new businesses coming into operation annually.

This year, due to the heavy influence of the Covid pandemic, a large number of enterprises has withdrawn from the market. It is estimated that by the end of 2021, the number of active businesses will be lower than that of 2020. The question is the target will be fulfilled?

Unified anti-pandemic policy needed

Entrepreneurs complain that with the policy “each locality is a fortress to prevent the epidemic”, many provinces have prioritized the fight against the epidemic with the desire to achieve “zero Covid-19” and this has affected business and production operations.

In many localities, hundreds of pandemic checkpoints have been set up at entrances and highways, which have hindered circulation of goods. The Vietnam Association of Logistics Service Providers lamented that as provinces apply different epidemic prevention measures, goods transport has been seriously affected, doubling the burden on businesses that have had to struggle to survive in the pandemic.

The characteristic of production and business activities is chain connections, regardless of administrative boundaries. Therefore, when local governments apply different policies and regulations on social distancing and goods transport and some provinces even close their doors to ensure “zero Covid”, input materials cannot reach factories and goods are kept in stock. This is seen as the fastest way to push enterprises to the risk of bankruptcy.

Recent statistics from the General Statistics Office show that in January-September 2021, up to 90,300 enterprises withdrew from the market, up 15.3% over the same period of last year.

On average, 10,000 enterprises were leaving the market each month. In fact, the number may be higher because when provinces implemented strict social distancing, many businesses could not complete closure procedures.

This situation has never happened in the past 10 years. Experts estimate that from now until the end of 2021, the number of businesses that will stop operating or be dissolve will be around 120,000.

Prolonged lockdowns have hit the economy hard. However, when switching to “living with Covid-19”, there are still many obstacles. In some provinces, the risk of “sub-license” rises again, making it difficult for businesses to resume operations.

Ly Kim Chi, Chairwoman of the HCM City Food and Foodstuff Association, said that businesses are already exhausted. If local governments issue more sub-licenses and regulations that cause difficulties for business operations, enterprises will “collapse” completely.

Another challenge for business and production recovery is labor shortages, as tens of thousands of migrant workers have left cities to return to their hometowns to avoid the pandemic.

Stronger reform

Một trận 'đạn pháo' và giấc mơ 1,3-1,5 triệu DN vào năm 2025

Nguyen Dinh Cung, former director of the Central Institute for Economic Management, said that in 2017 the Institute had proposed that the Government remove three quarters of the existing 4,000 business conditions. However, in official documents issued later, the Government only asked to reduce and simplify 50% of these. In 2018, ministries and branches began reducing and simplifying business conditions under the Government’s direction.

“But I don’t think that it really works because we recommended removing and abolishing, not simplifying business conditions,” Mr. Cung said. Therefore, there has been no substantive impact on the business environment, and no positive effect on enterprises. Half-hearted reform has led to the risk that business conditions are recovering.

The Vietnam Chamber of Commerce and Industry (VCCI) commented that the recent reform and reduction of business conditions and support for enterprises to enter the market has not been substantial. Ministries and state agencies claimed to have cut business conditions by up to 60%, but it is on paper only. In reality it’s only about 30-40%. The market entry procedures are still complicated and overlapping.

In 2016, the Government issued Resolution 35/NQ-CP on supporting and developing enterprises, which set a target of having 1 million enterprises operating by the end of 2020, but it failed. According to experts, the main reason is that the business environment still has many barriers for enterprises to enter the market.

Therefore, in the period of 2021-2025, if there are no drastic reforms in the business environment and to changes in behavior detrimental to production and business activities, the dream of having 1.3-1.5 million enterprises by 2025 will be unreachable.

Facing difficulties caused by the Covid-19 pandemic, businesses need a strategy to restore safe production and business activities in the new anti-epidemic state. It is important for Vietnam to take action now, to maintain its competitiveness on regionally and globally, and not to fall behind in the economic recovery process.

Economic experts said that it is necessary to take action immediately and have a comprehensive economic promotion program. Otherwise, recovery will be slow and painful.

Tran Thuy

Source: https://vietnamnet.vn/en/feature/covid-19-pandemic-and-the-goal-of-1-3-1-5-million-enterprises-by-2025-783501.html

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