State budget restructuring heats up Party Congress

Hanoi, January 22 (VNA) –Delegates to the ongoing 12 th National Party Congress continued debating documents in the afternoon of January 22, under the chair of Politburo member and President Truong Tan Sang. The Congress heard 11 reports, focusing on how to apply socialist theory to national construction and defence, growth model reform, economic restructuring and business environment improvement. They also discussed the application of the ‘three strategic breakthroughs’ to building a health sector geared towards equality and efficiency, along with judicial reform, high-quality personnel training, cultural development, the perfection of the political system and external relations. Deputy Finance Minister Do Hoang Anh Tuan said the Congress’s Resolution should place more importance on State budget development and restructuring during 2016-2020. He outlined a structure for the State budget, of which 80 percent should come from domestic income. Income from … [Read more...]

Party Congress continues with documents discussion

Delegates to the 12th National Party Congress continued to discuss a number of documents in Hanoi on January 22 under the chair of Politburo member and President Truong Tan Sang. Delegates to the 12th National Party Congress continued to discuss a number of documents in Hanoi on January 22 under the chair of Politburo member and President Truong Tan Sang. Regarding growth model renovation and economic restructuring, Secretary of the Hai Phong municipal Party Committee Le Van Thanh suggested considering the combination of extensive and intensive development and the possible application of one common growth model for the whole country. Localities that have economic difficulties should focus on extensive development to attract investment, create jobs for locals and boosting economic restructure. Meanwhile, cities and provinces with rapid industrialisation should focus on quality growth to increase productivity and competitiveness for their economies, he recommended. President of … [Read more...]

Vietnam premier calls for ways to cope with tumbling oil price

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Prime Minister Nguyen Tan Dung has asked a government body and state-run Vietnam National Oil And Gas Group to come up with the best solutions to falling oil prices, which will cause a negative effect on the national coffers this year. The requirement of the Vietnamese premier was set out at a meeting chaired by the Ministry of Industry and Trade in Hanoi on Thursday. A drop in world oil prices last year resulted in a loss of tens of trillions of Vietnamese dong [VND1 trillion = US$44 million], though overall tax collection rose 12 percent year on year, Prime Minister Dung said. Oil prices pared on Thursday ended 2015 sharply lower as the "black gold" was battered by prolonged global oversupply and a slowdown in energy-hungry China's economy, according to AFP. Brent crude settled up 82 cents at $37.28 a barrel, rebounding from a near 11-year low of $36.10 hit earlier in the Thursday session, Reuters reported. Meanwhile, the U.S. benchmark West Texas Intermediate (WTI) rose … [Read more...]

MOF plans heavier taxation, aims at big businesses

Within the last several months, plans on raising tax rates have been designed.

VietNamNet Bridge - Within the last several months, plans on raising tax rates have been designed. However, businesses have been reassured that heavier taxation is aimed at big corporations. Proposals on raising taxes on many products have been made. The Ministry of Finance (MOF) plans to tax more heavily on car imports under the mode of complete built units (CBU). The import tax on some input materials for dairy production will also be raised. Besides, higher tax rates will be imposed on iron exports, while luxury and import taxes will be applied to many beverage products, both domestically made and imports. The tax increase plans have worried domestic businesses which still have not fully recovered from the economic downturn. In most cases, the tax increases commence at the end of the year, while some kinds of taxes would take effect early next year. The tax increase plans have worried domestic businesses which still have not fully recovered from the economic downturn. Many … [Read more...]

Oil won’t affect Vietnam’s 2015 budget

Central Technology Platform No 2 at Bach Ho (White Tiger) oil field of Vietsovpetro Joint Venture. Plunging oil price would not affect budget revenue this year.

Do Hoang Anh Tuan, deputy minister of finance, said reduction in the world crude price to US$36 per barrel in future transactions would not affect budget revenue this year. The budget revenue this year has exceeded the target to reach between VND65 trillion and VND66 trillion ($2.9 billion), including 6 per cent from tax revenue of the crude oil exports, he said. The tax revenue from the crude oil exports at present does not account for a large segment of the total tax revenue unlike five to ten years earlier. The finance ministry has forecast economic development for each case that the crude oil price is $60, $50, $45, or $40 or even $35, or $30 per barrel, he said. In 2016, Viet Nam would import 12.5 million tonnes to 13 million tonnes of petrol and oil and if the world crude oil price still remains at $36 per barrel, the nation would save between $2 billion and $2.1 billion. The reduction in oil prices would bring down the input price of production, so production and … [Read more...]

Vietnam economy to slow down unless crude oil recovers: forecast

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An undated file photo shows an offshore oil platform of PetroVietnam Vietnam's economic growth will slow down by 1.36 percentage points next year from this year's estimate of 6.5 percent if crude oil prices slump to US$30 per barrel as recently forecast by international analysts. Experts at the Ministry of Planning and Investment's Center for Economic and Social Information and Forecast made the prediction as oil prices have been on a downward slope since the beginning of this year, falling 33 percent for the year to around $35 this week. Weak oil would also put the country, whose inflation rate is estimated to be less than 2 percent this year, at risk of deflation, they said. But the negative impacts would ease starting in 2017, they estimated. Vietnam is a crude oil exporter, and its exports are expected to see a slight increase next year as its major buyers are expected to do better. Its import bill, on the other hand, will decline as the prices of imported fuel products go … [Read more...]

Oil won’t affect 2015 budget

Central Technology Platform No 2 at Bach Ho (White Tiger) oil field of Vietsovpetro Joint Venture. Plunging oil price would not affect budget revenue this year. — VNA/VNS Photo Huy Hung

HA NOI (VNS) — Do Hoang Anh Tuan, deputy minister of finance, said reduction in the world crude price to US$36 per barrel in future transactions would not affect budget revenue this year. The budget revenue this year has exceeded the target to reach between VND65 trillion and VND66 trillion ($2.9 billion), including 6 per cent from tax revenue of the crude oil exports, he said. The tax revenue from the crude oil exports at present does not account for a large segment of the total tax revenue unlike five to ten years earlier. The finance ministry has forecast economic development for each case that the crude oil price is $60, $50, $45, or $40 or even $35, or $30 per barrel, he said. In 2016, Viet Nam would import 12.5 million tonnes to 13 million tonnes of petrol and oil and if the world crude oil price still remains at $36 per barrel, the nation would save between $2 billion and $2.1 billion. The reduction in oil prices would bring down the input price of production, so … [Read more...]

Experts claim plunging oil prices benefit economy

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Global oil prices have fallen sharply over the last week to below USD 36 a barrel, while Brent crude in London fell to USD37.93 a barrel, which mean that prices have dropped a third compared with May 2015 and nearly two-thirds compared with their peak in June 2014. While falling oil prices have created mounting pressure on crude oil drilling and exporting companies in Vietnam, economic expert Bui Ngoc Son said the economy would actually benefit. "Cheaper fuel will help reduce the prices of other essential goods and boost production and consumption," Son explained. "It is calculated that fuel prices account for as much as 40-50% of input costs." In a recent interview with VTV, Deputy Finance Minister Do Hoang Anh Tuan said that budget collection from crude oil export no longer made a significant contribution to the state budget in comparison with five and ten years ago, standing at VND 66 trillion (US$3.1 billion) this year. "In 2016, Vietnam was projected to import around 12.5-13 … [Read more...]

Crude Oil Contributes 6 percent of Budget Collection

Budget collection of crude oil valued VND 66 trillion (US$3.1 billion), lower than VND 76 trillion of tax debts, said Deputy Finance Minister Do Hoang Anh Tuan.

Mr. Tuan made the announcement yesterday at an interview with the Viet Nam Television. According to the Deputy Minister, the budget collection from crude oil no longer contributed highly to budget collection in comparison with five and ten years ago. Mr. Tuan said that oil price dropped to US$36 a barrel and would not affect budget collection in 2015. The Ministry of Finance crafted concrete scenarios for oil prices at US$60, 50, and 45 a barrel or even US$40, 35, and 30. In 2016, Viet Nam was projected to import around 12.5-13 million tons of petrol. Decreased oil price would lead to lower prices of input materials. Hence, business performance and people’s lives would be improved. Budget collection would increase, said Mr. Tuan. VGP … [Read more...]

Crude oil contributes 6% of budget collection

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VGP – Budget collection of crude oil valued VND 66 trillion (US$3.1 billion), lower than VND 76 trillion of tax debts, said Deputy Finance Minister Do Hoang Anh Tuan. Mr. Tuan made the announcement yesterday at an interview with the Viet Nam Television. According to the Deputy Minister, the budget collection from crude oil no longer contributed highly to budget collection in comparison with five and ten years ago. Mr. Tuan said that oil price dropped to US$36 a barrel and would not affect budget collection in 2015. The Ministry of Finance crafted concrete scenarios for oil prices at US$60, 50, and 45 a barrel or even US$40, 35, and 30. In 2016, Viet Nam was projected to import around 12.5-13 million tons of petrol. Decreased oil price would lead to lower prices of input materials. Hence, business performance and people’s lives would be improved. Budget collection would increase, said Mr. Tuan./. By Kim Anh … [Read more...]

Vietnam remains optimistic despite loss of revenue from crude oil exports

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VietNamNet Bridge - The government, when planning the nation’s budget for 2016, has estimated that crude oil will make up 10 percent of the budget revenue for the year, which means that Vietnam still plans to increase the crude oil output. The first oil flow from the H5 rig in late October began mixing with the national exploitation system, raising the total output of Te Giac Trang (White Rhino) Field to 42,000 barrels per day. The project’s operation will help increase the investor’s and the government’s profits to $400 million. Besides, it will also play a very important role in improving the crude oil exploitation capacity. The news has emerged in the context of the big difference between the estimated and real revenue from oil exports. In early 2015, despite the analysts’ warnings about the continued oil price decreases, the government still hoped Vietnam would be able to earn VND159 trillion from oil exports. However, by the end of September, … [Read more...]

Vietnam’s plan to borrow billions of dollars raises concern

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VietNamNet Bridge - Just within three months, the Ministry of Finance (MOF) has announced a series of plans to borrow money for the state budget totaling $5.3 billion. In mid-August, MOF warned about the failure in the 2015 government bond issuance plan. It planned to mobilize VND250 trillion worth of capital through bond issuance, but only VND141 trillion had been found at that time. At that time, no one mentioned the possibility of issuing government bonds in the international market. Just two months later, MOF announced the plan to issue $3 billion worth of international bonds, the largest-ever bond campaign designed. MOF’s Deputy Minister Do Hoang Anh Tuan tried to reassure the public at a press conference on October 26 that the state budget balancing was still within reach, and that $3 billion is the ceiling level for the bond issuance in 2015-2016 to restructure short-term debts. Meanwhile, Bui Duc Thu from the National Assembly’s Finance & Budget … [Read more...]

Enterprises seeking further reduction in customs red tape

HA NOI (VNS) — Despite efforts to hasten administrative reforms, there is still room for further reduction in customs procedures, and businesses expect more simplification. A report on the business satisfaction with the customs administrative procedures launched yesterday revealed that 82 per cent of the more than 3,000 surveyed firms said that they expected customs administrative procedures to be further simplified and service quality to be enhanced. Although as many as 94 per cent of firms viewed changes in customs policies and regulations as positive, a significant 58 per cent said they encountered difficulties in conducting customs procedures. Notably, 28 per cent of respondent businesses said they have to pay unofficial charges to complete customs procedures in Viet Nam, down from the rate of 57 per cent in 2012, and 49 per cent in 2013. The report also revealed that 37 per cent of the respondents said that they did not pay unofficial customs fees, while 35 per cent were … [Read more...]

Easing pressure on the government budget

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Image for illustration NDO - Despite the increase in local budget revenues, government revenue in 2015 is estimated to decrease which is mainly due to the sharply declining prices of crude oil, placing high pressure on ensuring a balanced budget this year. According to Deputy Minister of Finance Do Hoang Anh Tuan, the government budget will be short by VND31 trillion (US$1.39 billion) while local revenue will increase by VND47 trillion (US$2.11 billion); the Finance Ministry has submitted proposals to the government to compensate for revenue shortages. The General Department of Taxation announced that the revenue from corporate income tax in the past ten months rose by VND21 trillion (US$945 million), from value added tax up by VND4.2 trillion (US$189 million) and from individual income tax up by VND2.7 trillion (US$121.5 million), showing signs of national economic recovery. However, the revenue from crude oil over ten months reached only VND55.5 trillion (US$2.49 billion), … [Read more...]

Tax refunds delayed for exporters

Vu Thi Hoai Son (L), director of Tan Nhat Huong Company, talks to Deputy Minister of Finance Do Hoang Anh Tuan at a seminar in HCMC last week - PHOTO: MINH TAM

Minh Tam Vu Thi Hoai Son, director of Tan Nhat Huong Company, asked Deputy Minister of Finance Do Hoang Anh Tuan during a tea break at a seminar on taxes and customs in HCMC last week why tax authorities always gave more priorities to foreign enterprises than local firms when it came to tax refund. She told the Daily that the tax agency has yet to refund around VND21 billion (US$942,300 million) in taxes although it has issued a decision to give back money to the company nearly one year ago. She added Tan Nhat Huong has submitted two other tax refund claims but the tax agency has not responded, spelling trouble for the company. It has had to take bank loans at high interest rates to continue operations. From now until the year-end, Tan Nhat Huong will continue asking for tax refund, the director said. She added her enterprise exports products made from rice so if it faces difficulties, its partners and employees would be affected. An employee of Tan Nhat Huong at a recent … [Read more...]

HCM City businesses cry foul as tax refunds take unconscionably long

Deputy Minister of Finance Do Hoang Anh Tuan has instructed tax offices in Ho Chi Minh City to review businesses' applications for tax refunds and resolve possible problems that have been delaying payments. He issued the order at a recent meeting after many businesses complained of being greatly vexed by tax offices' continued failure to refund taxes. Vu Thi Hoai Son, CEO of food company Tan Nhat Huong, said her company has been waiting for more than two months for VND21 billion (US$928,000) worth tax refunds, and her almost daily visits to the local tax office have been in vain. In response to Son's question about the delay, a manager from the tax office reportedly said the city's revenues were lower than expected this year due to the sharp decline in crude oil prices. The finance ministry would provide VND1.7 trillion ($75.15 million) to the city, but since approved tax refunds totaled VND1.8 trillion, the city has prioritized projects of national importance and producers who … [Read more...]

Ho Chi Minh City businesses cry foul as tax refunds take unconscionably long

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A representative of a business submits its application for tax refunds. Photo: Ngoc Thang Deputy Minister of Finance Do Hoang Anh Tuan has instructed tax offices in Ho Chi Minh City to review businesses' applications for tax refunds and resolve possible problems that have been delaying payments. He issued the order at a meeting Thursday after many businesses complained of being greatly vexed by tax offices' continued failure to refund taxes. Vu Thi Hoai Son, CEO of food company Tan Nhat Huong, said her company has been waiting for more than two months for VND21 billion (US$928,000) worth tax refunds, and her almost daily visits to the local tax office have been in vain. In response to Son's question about the delay, a manager from the tax office reportedly said the city's revenues were lower than expected this year due to the sharp decline in crude oil prices. The finance ministry would provide VND1.7 trillion ($75.15 million) to the city, but since approved tax refunds totaled … [Read more...]

Business community expects stronger tax, customs administrative reform

HCM City, November 6 (VNA) – The business community hopes for stronger determination from tax and customs sectors in administrative reform, said Vo Tan Thanh, vice president of the Vietnam Chamber of Commerce and Industry (VCCI). Many enterprises agree that despite the sectors’ recent efforts, tax and customs in administrative reform progress has yet to meet expectations or the country’s socio-economic development, Thanh said during a dialogue between the Ministry of Finance and the business community in Ho Chi Minh City on November 5. According to a recent VCCI report on the tax sector’s operations, 49 percent of 2,500 surveyed enterprises in 63 localities nationwide complained that they find administrative procedures troublesome. Besides, 92 percent of the firms said they saw positive changes in tax laws in the past five years, especially in value-added tax and corporate income regulations. The sharpest cuts in the duration of administrative procedures … [Read more...]

Transfer pricing fight goes up a notch

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With the aim of strengthening the fight against transfer pricing, the General Department of Taxation (GDT) under the Ministry of Finance (MoF) has established the Transfer Price Inspection Department under the Inspector of General Department of Taxation and a separate Transfer Price Inspection Department in Hanoi and Ho Chi Minh City and southern Binh Duong and Dong Nai provinces. The Departments were officially launched on October 28. MoF also said that by the end of this year it will complete a database on 11,500 foreign invested enterprises (FIEs) and hopes it will boost results in transfer pricing inspections in the future. Past inspections Transfer price inspections began in 2012, when the GDT established a transfer pricing management team. The policies and solutions introduced partly controlled transfer pricing activities and declarations by businesses have gradually become more orderly. According to Mr. Nguyen Quang Tien, Head of the Modernization Department at the GDT, … [Read more...]

Merged banks ask for help, want tax reductions

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VietNamNet Bridge - Many commercial banks, which have or plan to make merger and acquisition (M&A) deals in their restructuring process, have asked for the state’s financial support, saying that tax reductions will help them overcome difficulties. The Sai Gon Ha Noi Commercial Bank (SHB) has asked for corporate income tax exemption and reduction for five years after the bank admits Vinaconex Viettel (VVF), a financial company which is described as ‘having many health problems’. The bank has also asked to be exempted from corporate income tax it has to pay in 2013-2015, the three years during which it has to assume responsibility for Habubank, which was on the verge of bankruptcy when SHB took over. The Military Bank (MB) also mentioned proposals for tax preferences at the meeting with shareholders to discuss the admission of Song Da Finance Company (SDFC). MB wants the corporate income tax exemption and reduction for the first five years after the merger. … [Read more...]