VIETNAM BUSINESS NEWS MARCH 16

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Ministry of Finance proposes new housing tax

Ministry of Finance proposes new housing tax hinh anh 1

The Ministry of Finance has affirmed that it has yet to draw up a draft property tax law that will affect owners of homes and land.

In a document sent to other ministries, agencies and local authorities on February 24, the Ministry of Finance sought to consult with them to review some laws as required by the prime minister. The ministry asked if the law on agricultural land and that on non-agricultural land should be merged and if a law on property tax should be drafted, the local media reported.

A representative of the ministry explained that revisions of laws, including tax policy, was a periodic job, as required by the prime minister. If localities, ministries and agencies want to tax houses or other properties, the Ministry of Finance will sum up their opinions and report them to the Government.

Based on the feedback from ministries, agencies and localities and international experiences, the Ministry of Finance will review the deployment of the laws on the use of agricultural land and non-agricultural land and propose solutions to improve real estate tax policy. The law reform will ensure the consistency of asset-related tax policies and match the tax reform plan for 2021-2030.

Vietravel Airlines to begin ticket sale for two new routes on March 16

Vietravel Airlines will officially open ticket sales for its new routes connecting Hanoi to Quy Nhon city in the south central province of Binh Dinh and the central city of Da Nang on March 16.

A promotion programme will run between March 16 and April 21, with deep discounts for flights on these routes from April 22 to October 26.

Vietravel Airlines is working with foreign aviation and travel authorities to expand its flight network in the second quarter of this year, he informed.

FPT, Sierra Leona sign deal to promote digital transformation

FPT Technology Corporation of Vietnam and the Republic of Sierra Leone on March 16 signed a memorandum of understanding (MoU) on cooperation to promote digital transformation and human resources training for the African country.

The MoU was inked by Leone Jacob Jusu Saffa, Chief Minister of the Republic of Sierra Leone, and Truong Gia Binh, FPT chairman, within the framework of an official visit to Vietnam of Sierra Leonean President Julius Maada Bio.

Under the MoU, FPT will coordinate with the world’s leading consulting firms to provide consultation to the Sierra Leone Government on socio-economic development and digital transformation strategies.

The corporation will also support the Government in building a digital government, digital economy, and digital society towards a digital nation model.

Regarding the training segment, FPT will provide high-quality Bachelor of Technology programmes in Vietnam to students selected and funded by the Government of Sierra Leone.

Vietnam fully reopens borders to tourists after pandemic hiatus

Hanoi-based Noi Bai International Airport welcomed the first international commercial flight on March 15 morning after a two-year hiatus due to the COVID-19 pandemic.

Flight SQ192 from Singapore to Hanoi, operated by Singapore Airlines, marks a milestone as Vietnam fully opens its doors to international visitors.

The Civil Aviation Authority of Vietnam (CAAV) said country has resumed services to foreign tourists from March 15, noting that domestic airlines have geared up for the restoration.

To prepare for the increased frequency of international flights, the carriers have stepped up recruitment to fill up the layoffs triggered by the pandemic, the authority added.

According to the airlines, they allow international passengers to refund and change tickets free of charge since there have been no entry regulations in the new situation issued yet.

Deputy Prime Minister Vu Duc Dam has asked the Ministry of Health to quickly adjust entry regulations, making them match the latest situation.

Trade Minister affirms sufficient fuel supply for local consumption

Trade Minister Nguyen Hong Dien on March 16 played down legislators’ worries about petroleum supply disruption due to global price volatility, saying Vietnam has a sufficient supply of petroleum products for local consumption.

Addressing a hearing at the ongoing National Assembly Standing Committee session, Dien admitted that petroleum prices have recently spiked dramatically in the global market due to supply disruptions in large crude oil producers.

The price hike immediately affected the domestic petroleum market, causing retail prices to go up and a number of filling stations to suspend operations or reduce working hours.

In addition, Dien said, Nghi Son oil refinery that supplies one third of the country’s petroleum output suddenly cut its production to 80% and even to 55% of its design capacity due to financial problems.

By mid-February, Vietnam had secured a sufficient supply of petroleum for the whole March thanks to the inventory and additional imports of 3 million m3 of petrol. Currently, the average domestic demand for petroleum is about 1.3 million m3/month.

According to the minister, the ministry will strengthen inspections to timely detect and sanction petroleum trading units that make use of price hikes to manipulate the market.

Government views price control of key commodities as top priority

The government has viewed price control of key commodities, such as petrol, steel, concrete, transport, livestock feed, food and medical equipment, as a top priority, said Deputy Prime Minister Le Minh Khai in a meeting with ministries and local authorities on March 14.

Khai ordered them to stay on top of the supply and demand of said commodities and be ready to heavily sanction firms who engaged in price manipulation practices. He urged them to work with the media to ensure people are well-informed, to avoid panic and hoarding.

The Deputy PM said, for the time being, there was no plan to increase prices for key commodities under the government’s price control scheme and administrative fees. However, ministries should be making preparations for possible future adjustments.

He said firms and individuals found to have violated pricing regulations would face severe penalties, especially hoarders.

Vietnam Airlines, Hue to boost tourism cooperation

The central province of Thừa Thiên Huế and the national flag carrier Vietnam Airlines have agreed on a comprehensive cooperation deal for 2022-26 to promote destinations, tourism, and local investment.

The two sides will foster a series of programmes, including communications and promotions in tourism, investment, trade, air service in the post-COVID-19 recovery plan in 2022 and the following years.

The province and Vietnam Airlines will jointly host international and regional education, culture, tourism, and promotion programmes abroad.

Vietnam Airlines will help boost the destinations, trade and investment and cultural programmes of Thừa Thiên Huế through its air service worldwide, calling for investment in the tourism hub.

Following the cooperation, the national airlines officially became the carrier of the Huế Festival 2022.

Project aims for sustainable growth of macadamia industry

Deputy Prime Minister Le Van Thanh has signed a decision approving a project to sustainably develop macadamia cultivation and processing in the 2021-2030 period with a vision to 2050, which aims to turn macadamia into a strong export product.

Under the scheme, macadamia export value is hoped to reach about 400 million USD in 2030 and about 2.5 billion USD in 2050, with the percentage of macadamia in shells being less than 40 percent.

In 2030, macadamia nut output is expected to reach about 130,000 tonnes, which will increase to about 500,000 tonnes in 2050.

The country aims for 130,000-150,000 hectares of macadamia farm by 2030, mostly in northwestern and Central Highlands regions.

Basing on the evaluation of macadamia farming efficiency in the 2021-2030 period, the area could be expanded to about 250,000 hectares in 2050.

Measures proposed for stabilising fuel market

In the face of soaring fuel prices, Minister of Industry and Trade Nguyen Hong Dien proposed several measures for stabilising the market in the long run while fielding queries from full-time legislators on March 16.

At the question-and-answer session of the National Assembly Standing Committee’s 9th sitting, he said to ensure fuel supply and stabilising the domestic market in the long term, the Ministry of Industry and Trade (MoIT) will keep coordinating with the Ministry of Finance to align petrol and oil prices with global fluctuations as well as domestic supply and demand.

The move was aimed at ensuring harmonious interests among stakeholders, namely fuel sellers, businesses using petrol and oil as an input for their operations, and consumers, the minister noted.

Russia-Ukraine conflict forces Vietnam to look for alternative fertiliser suppliers

The Russia–Ukraine conflict is forcing Vietnam to look for alternative suppliers of fertilisers to cope with the shortage of supply and rising prices.

According to the Ministry of Agriculture and Rural Development (MARD), the Russia–Ukraine conflict is badly affecting the fertiliser market, which had already been suffering supply shortage and price increase from the prolonged COVID-19 pandemic as the supply chain was disrupted.

Russia was one of the world’s major low-cost fertiliser exporters, ranking first in urea, NPK, among nitrate export, third in potash and fourth in phosphate.

Domestic fertiliser prices set a new high in the past 50 years. According to the ministry, fertiliser prices rose by more than 20 percent in recent months. The soaring prices of oil and gas, which accounted for a significant part of production cost, also pushed up fertiliser prices.

The storm of fertiliser prices was forecast to continue when these export restrictions were still in place, causing a severe shortage of fertilisers, including potash and DAP.

New car models meeting Euro 5 standard to make debut: VAMA

Members of the Vietnam Automobile Manufacturers’ Association (VAMA) will roll out various new models meeting the Euro 5 emissions standard, according to the association.

VAMA representative Dao Cong Quyet said the new models, to be launched in the coming months, are all equipped with on-board diagnostics (OBD), which is vehicle’s standard protocol to retrieve vehicle diagnostic information, and air filters reducing particulate matter (PM) and toxic air pollutants.

Communications to raise public awareness of using suitable fuel for vehicles meeting the standard have also been carried out and will be bolstered in the time to come.

Consumers can look for suitable fuel types with support from petrol and oil businesses, or via Logigo and Petrolimex applications on smart devices, according to the Vietnam Petroleum Association (VINPA).

Ambitious goal of 5 million foreign visitors reachable though tough: VNAT leader

The tourism sector’s target of welcoming 5 million foreign visitors and 60 million domestic tourists this year, and revenue of about 400 trillion VND (17.5 billion USD) is ambitious, but still reachable, according to General Director of the Vietnam National Administration of Tourism (VNAT) Nguyen Trung Khanh.

On March 15, the VNAT officially announced the reopening of tourism activities in the new normal, with specific regulations for inbound and outbound tours.

Right in the morning of the day, the Government issued Resolution 32/NQ-CP on the visa exemption policy for citizens from 13 countries from March 15.

Localities nationwide have been requested to issue their own plans to resume tourism activities to suit their specific conditions, while a domestic programme has been launched with various promotion programmes.

Since the beginning of January, the volume of international searches for Vietnam’s aviation has remained very high. Notably, the increase rate hit 425 percent on January 21, and 374 percent on February 3 against the same period of 2021.

Bac Giang has two more IP infrastructure development projects

The People’s Committee of northern Bac Giang province has granted investment registration certificates to two industrial park (IP) development projects with a combined capital of nearly 4 trillion VND (174.72 million USD).

Capella real estate developer will channel in close to 2.7 trillion VND to build infrastructure in the Yen Lu industrial park spanning 377 ha in Yen Lu commune of the province’s Yen Dung district.

The park plans to attract secondary investors starting this November. Upon its operation, it is projected to create jobs for up to 42,000 workers.

Meanwhile, Lideco 1 Joint Stock Company will fuel nearly 1.2 trillion VND for the building of infrastructure at the Tan Hung industrial park of 105.3 ha in Lang Giang district’s Tan Hung and Xuong Lam communes.

The park is set to call for investment from February next year and generate jobs for 30,000 workhands.

President inspects preparations for investment promotion conference in HCM City

President Nguyen Xuan Phuc had a meeting with leaders of Ho Chi Minh City on March 16 to discuss preparations for a conference to promote investment in the city’s Hoc Mon and Cu Chi districts, which is slated for early April.

According to the conference’s organising board, exhibitions will be held within the event’s framework to introduce 55 projects calling for investment in the two districts as well as local high-tech agricultural products.

The projects, which need 12.5 billion USD in total, are in the areas of infrastructure, industry, agriculture, trade-service, education-culture-sport, with 18 in transport and technical infrastructure building.

Japanese firms in Vietnam turn eyes to non-manufacturing industries

There was a significant increase in Japanese investment in Vietnam’s non-manufacturing industries, such as retailing, education, health care, energy, finance and insurance, transport and real estate.

According to a 2021 survey of the Japan External Trade Organisation (JETRO) on 700 Japanese FDI enterprises in Vietnam, some 51.7% of Japanese FDI firms in the manufacturing sector plan to expand business in Vietnam over the next one to two years, up 4.6% year-on-year. About 58.7% of non-manufacturing companies want to do the same, up 12.1%.

Japanese enterprises are increasingly diversifying areas of operation in Vietnam, said Hirai Shinji, Chief Representative of JETRO in Ho Chi Minh City. Most of Japanese firms in Vietnam were previously operating in manufacturing, he said, but now FDI flows into food production, fast-moving consumer goods, retailing and real estate are on a rise.

Industrial production index up 8.5% in February

Vietnam’s index of industrial production (IIP) in February rose by 8.5% year-on-year, marking the fourth consecutive monthly increase, according to the Ministry of Industry and Trade (MoIT).

The processing and manufacturing industry, which accounted for over 70% of total industrial output, still played a main driver of the growth.

The ministry said the resumption of supply chains in key industries in the first quarter has helped remove bottlenecks in the manufacturing supply chain.

The MoIT said it is necessary to ensure the sufficient supply of raw materials and energy to create momentum for, and meet the needs of production and business recovery and socio-economic development in coming months.

Attention should be also paid to resolving difficulties facing key industrial projects, and factories to help them maintain and recover gradually their production activities, it added.

Ample room to increase coffee exports to leading markets globally

There remains plenty of room for the nation to increase this year’s coffee exports to the world’s leading five markets, including the United States, Germany, France, Canada, and Italy.

According to details given by the Ministry of Agriculture and Rural Development (MARD), February saw global coffee prices increase, with the price of Robusta coffee delivered in March in the London market rising by US$174 per tonne to reach US$2,349 per tonne. The increase in coffee prices is primarily being caused by global coffee inventories continuing to decline.

Coffee export volume during the first two months of the year reached 293 thousand tonnes and US$674 million, up 3.4% in volume and 35.6% in value over the same period from last year.

The US Department of Agriculture (USDA) therefore forecasts that Vietnamese coffee production in the 2021 to 2022 crop year will increase by 2.1 million bags from the previous crop to 31.1 million bags following a severe drought which hit during the previous crop year.

The recovery of several major economies around the world is also helping to boost coffee consumption, with a growing trend of instant coffee consumption which helps to increase the advantage of Vietnamese Robusta coffee.

Foreign retailers reinforce investment

Foreign brands are amplifying their investment in Vietnam in defiance of the health crisis lingering and denting consumers’ pockets.

Japan’s UNIQLO last month announced that it will open a large-scale store in Ho Chi Minh City’s Saigon Center in the next few months. With an area of more than 3,000 square metres, it will be one of the largest stores in Vietnam, playing an important role in the brand’s expansion strategy two years after entering the Vietnamese market.

Meanwhile, Vietnam’s largest and fastest-growing mother and baby retail network, Con Cung, is looking for prime locations for its expansion after launching its 2,000sq.m super centre in Ho Chi Minh City’s District 1 in January, following two more stores opened in District 5 and Phu Nhuan district.

The motivation for Con Cung’s was an investment worth $90 million from Quadria Capital, Asia’s leading healthcare investor, in late January.

The fund will be used to support Con Cung’s ambition to launch 2,000 local stores by 2025, expand its product portfolio, and launch a super app that provides personalised products and services for over the targeted five million Vietnamese mothers.

Robert Willett, operating partner at Quadria Capital said, “The retail industry is constantly evolving. It’s exciting to be a part of this sector and provide care and education to its customers through a personalised omnichannel experience that is powered by nimble online-offline expansion strategies and underpinned by AI.”

Willet expressed that he looks forward to supporting Con Cung and providing Vietnamese people with world-class products.

Nghi Son refinery’s supply not included in fuel supply plan in Q2

The fuel supply plan for the local market in the second quarter of the year will not include the volume supplied by the Nghi Son Refinery and Petrochemical LLC but mainly from imports, according to the Ministry of Industry and Trade.

In a report sent to the National Assembly deputies, the ministry stated that the Nghi Son refinery had been facing financial difficulties, so it cannot import enough crude oil for production, resulting in a shortage of fuel in the local market, the local media reported.

Therefore, since mid-January, the refinery had scaled down production from 100% of capacity to 80% and then 55%-60%.

According to the Ministry of Industry and Trade, the refinery’s volume of fuels delivered to traders in February fell 50% over the plan.

Nghi Son was expected to hand over 739,900 cubic meters but supplied 365,200 cubic meters. Of the total, the supplied volumes of gasoline and diesel oil plunged 40% and 58%, respectively.

In March, the refinery will supply 556,000 cubic meters out of the planned volume of 680,000 cubic meters.

VND8.3 trillion to be allocated for key traffic projects

The Ministry of Transport is planning to allocate an additional VND8.3 trillion for key traffic projects after the prime minister approves the third phase of the 2022 mid-term public investment plan this month, according to the Ministry of Planning and Investment.

Of the planned public funding, some VND5 trillion will be poured into the North-South expressway project in the 2021-2025 period, while the rest will be used for 37 new projects, the local media reported.

Some expressway projects, including Bien Hoa-Vung Tau, Chau Doc-Can Tho-Soc Trang, Khanh Hoa-Buon Ma Thuot, Cao Lanh-An Huu, Dau Giay-Tan Phu and Chon Thanh-Duc Hoa, are awaiting investment approval from the National Assembly or the prime minister.

The Ministry of Transport has been tasked with a 2022 mid-term public investment plan worth over VND50.3 trillion, the largest ever, accounting for 9.7% of the country’s capital plan in 2022.

The ministry had earlier made two capital allocations valued at nearly VND42 trillion, equivalent to 83.4% of the total.

Hanoi to support 50 rural industry development projects

Hanoi will support 50 projects for the development of rural industries as part of efforts to preserve and develop craft villages in the 2022-2025 period.

The five-year plan aims to boost economic value in craft villages in the cause of developing rural industries that are given large room for growth.

The city’s plan will focus on five groups of actions namely completing policies on traditional trade and craft villages preservation and development; developing new occupations; training human resources; enhancing environmental protection and handling pollution; promoting trade promotion and brand building associated with the One Commune One Product (OCOP) Program.

The preservation will be put on seven craft villages namely Ngo village (Phu Xuyen District) with mosaic painting, Ha Thai (Thuong Tin District) for its lacquerware, Phu Vinh village (Chuong My District) specializing in bamboo and rattan, Van Phuc with the silk weaving trade (Ha Dong District), and Bat Trang ceramics village (Gia Lam District).

Source: VOV/VNS/VNA/VIR/SGT/Hanoitimes/Dtinews

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