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Vietnamese legislature ratifies 30% corporate income tax cut in 2020 for SMEs

Small and medium-sized enterprises (SMEs) that make no more than VND200 billion (US$8.6 million) in revenue in 2020 will benefit from a 30 percent corporate income tax cut for the year, according to a resolution adopted by the country’s lawmaking National Assembly on Friday.

Over 90 percent of deputies voted in favor of the resolution, which seeks to cut corporate income tax by 30 percent for SMEs, cooperatives, public non-business units, and other agencies this year.

In their explanation for the draft resolution, the Standing Committee of the National Assembly said the reduction of corporate income tax for SMEs was meant to help business rebound from COVID-19.

So even enterprises that turn a profit in 2020 are eligible to apply for the tax cut, provided they satisfy the revenue condition.

The committee stated that the resolution is aimed at SMEs with limited access to capital and a relatively low revenue who account for a small market share and employ a limited workforce.

The number of insured workers was removed from the eligibility criteria for the tax cut to ensure parity for businesses with a large workforce and help more firms in the SME sector.

Firms entitled to the tax break should accrue a total revenue of no more than VND200 billion this year.

Previously, a government-submitted tax break plan only sought to make the 30 percent tax reduction available to firms that have a revenue of no more than VND50 billion ($2.15 million) and employ up to 100 people.

“The expansion of tax break beneficiaries would amplify the loss of 2020 state budget collection from VND15.84 trillion [$682.4 million] to roughly VND23 trillion [$990.87 million],” the NA Standing Committee, which appraised the plan, said in a statement.

In response to suggestions to extend the effective date of the resolution to 2021, the committee projected a bright outlook for the economy since the COVID-19 outbreak has been fundamentally put under control in Vietnam while the worldwide pandemic situation is also abating.

Vietnam and other countries are gradually relaxing COVID-19 restrictions and focusing on revitalizing the economy, which would render a further tax cut plan unnecessary, it said.

A prolonged tax cut would put immense pressure on the state budget of the fiscal years to come, the committee added.

The NA Standing Committee will propose an extension of the tax cut resolution to its legal drafting unit and submit it to the National Assembly for consideration should the economic situation show no positive surge in late 2020 or early 2021.

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Source: https://tuoitrenews.vn/news/business/20200619/vietnamese-legislature-ratifies-30-corporate-income-tax-cut-in-2020-for-smes/55168.html

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Ministry warns about online lending apps

Search results for online lending apps. The Ministry of Public Security has warned about the risk of black credit provided by online lending applications which could threaten social security. — Photo vietnamnet.vn

HÀ NỘI — The Ministry of Public Security has warned about the risk of black credit provided by online lending applications which could threaten social security.

Online lending apps provide trust-based loans in which the borrowers do not need mortgage assets. Transactions were conducted online via websites, online exchanges and apps installed on smartphones.

The borrowing and lending process through the apps was very easy, as people who want to borrow money only have to complete some simple registration procedures including downloading the app, filling in personal information including an account number to receive money, uploading a photo and identity cards, and allowing the app to access their personal contacts.

However, the ministry warned that many lending apps turned out to be a form of black credit with cut-throat interest rates, which might have unintended consequences and affect social security.

The ministry urged borrowers to study online lending providers together with contract terms carefully to avoid risks.

Việt Nam was developing a sandbox for financial technologies, including peer-to-peer (P2P) lending, which was critical to ensure fintech development remains on track.

There are around 40 companies providing P2P lending services in the country. — 

Source: https://vietnamnews.vn/economy/749379/ministry-warns-about-online-lending-apps.html

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Sóc Trăng exports jump 26% despite pandemic

The Cửu Long (Mekong) Delta province of Sóc Trăng saw exports increase by 26 per cent year-on-year in the first half despite the impacts of the COVID-19 pandemic. VNA/ Photo

MEKONG DELTA — The Cửu Long (Mekong) Delta province of Sóc Trăng’s exports in the first six months of the year increased by 26 per cent year-on-year to US$470 million.

Seafood accounted for $332 million, a 24.8 per cent increase, and rice for $97 million, 2.2 times higher.

Võ Văn Chiêu, director of the provincial Department of Industry and Trade, said seafood exports had been sustained despite the difficulties caused by the COVID-19 pandemic thanks to efforts to control it.

Võ Văn Phục, director of the Việt Nam Clean Fishery JSC, one of the biggest exporters in the province, said shrimp exports would increase by 50 per cent in July from the same period last year thanks to Việt Nam controlling the disease outbreak.

Businesses in Sóc Trăng have methodically invested, branded and built value chains, and so the province’s exports increased even when the export markets were plagued by difficulties.

The province has set this year’s export target of $900 million, $670 million from seafood.

To meet it, it encourages firms to expand markets, improve design and quality, and diversify products to meet various consumer demands. —

Source: https://vietnamnews.vn/economy/749348/soc-trang-exports-jump-26-despite-pandemic.html

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Hà Nội condominium market has recovery of sales in Q2

 

In Q2 Hà Nội’s market had a total of 5,100 sold units, more than double that of the previous quarter. — Photo vneconomy.vn

HÀ NỘI — The new launch of condominiums in the second quarter of this year (Q2) nearly tripled that of the previous quarter, showing recovery of sales activities, according to CBRE Việt Nam’s quarterly report on the Hà Nội market released on Tuesday at an online press conference.

In terms of segments, 88 per cent of units launched in Q2 were in the mid-end segment while the remainder were high-end products.

Sales momentum was relatively positive in Q2 compared to the previous quarter, with more than 50 per cent of units launched during the quarter having been absorbed.

In Q2, there were a total of 5,100 sold units, more than double that of the previous quarter. The sales picked up in Q2 thanks to the social distancing order removed.

Diversification in sales channels such as online channels combined with direct marketing via sales events has boosted sales during the quarter, according to CBRE.

Especially, applications in project management and online sales have been successfully developed by many companies. Those technology platforms help to introduce projects, deal with customers and carry out online sales process.

In addition, investors and property trading floors can also receive sales data and information analysis to build suitable sales and marketing strategy, Robert Vũ, CEO of batdongsan.com.vn, a popular property website in Việt Nam, said on Wednesday at a press conference releasing a report on the domestic property market in Q2.

Local buyers are the key focus of developers during the first half of the year as foreign sales have been disrupted due to the suspension of international flights.

The segment of property for foreigners buying or renting significantly slowed down due to the reduced number of foreigners travelling in Việt Nam and a significant amount of foreigners going home due to the COVID-19 pandemic, Nguyễn Hoài An, director of Hanoi Branch, CBRE Vietnam told Việt Nam News.

“However, in the Hà Nội market, there were many experts of foreign companies coming back to work in Việt Nam by charter flights. Therefore, the experts must rent serviced apartments and hotels, leading to occupancy rates in many serviced apartment projects increasing from the end of the second quarter.”

The hotel segment in Hà Nội was in a better situation, although it still struggles, she said.

“The prospects of this property market for foreign customers would depend on the ability to re-open international flights and borders between Việt Nam and other countries,” An said.

The CBRE also reported that the Hà Nội market had about 5,600 units launched in Q2, leading to a total new launch during the first half of around 7,200 units – down 65 per cent year on year (y-o-y).

The new supply in the first six months declined significantly compared to the same period of last year due to COVID-19 disruption, said CBRE Việt Nam.

Selling prices in the primary market in Q2 averaged US$1,379 per sq.m (net of VAT), up by 3 per cent y-o-y. While mid-end products from township developments see higher selling prices due to an increasing amount of amenities, landscape and infrastructure, this segment witnessed the highest y-o-y growth of 4 per cent among segments.

The level of new supply is expected to stay at around 18,000-20,000 units in 2020, lower than 30,000 units at annual average for many years, according to the CBRE.

Nguyễn Hoài An, director of Hanoi Branch, CBRE Vietnam said that: “The lower level of new supply this year allows sales to catch up quicker with the new launch which had remained at a high-level over the past five years.”

This year, total sold units might be lowered to around 15,000-17,000 units in Hà Nội due to modest sales performance in the first half of this year.

The primary pricing is forecast to remain flat in the second half of this year since new supply is heavily dominated by mid-end segment and higher competition in this segment making it harder to escalate selling prices.

According to batdongsan.com.vn, the number of searches for mini apartments (with an area of less than 45sq.m) at the end of Q2 increased by more than 200 per cent compared to February 2020.

This reflects the growing trend of more young people and families wishing to own affordable apartments. This is also a reason for investors to build studio apartments and mini apartments, according to this website. — 

Source: https://vietnamnews.vn/economy/749344/ha-noi-condominium-market-has-recovery-of-sales-in-q2.html

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