Other Briefings
Vietnam Releases Details of Personal Income Tax Law
Oct. 9 – The government has released the details of the new Personal Income Tax (PIT) law and its accompanying regulations on registration and declaration.
Under the law, payers are defined as non-residents and residents who have taxable earnings coming from Vietnam territory without differentiating income payment sites.
The new PIT will take effect on Jan. 1, 2009, when individuals with taxable earnings will be granted a tax code.
Vietnam Implements Regulations for Environmental Sustainability
By Chua Siew Joo
Oct. 8 – All industrial zones in Dong Nai province will be required to install a central wastewater treatment plant by the end of 2008 or face suspension, according to Phan Van Het, deputy director of Resources and Environment Department.
Last September, a Taiwanese firm, Vedan Vietnam, was caught by environment inspectors from the Ministry of Natural Resources and Environment for dumping untreated waste water into the Thi Vai River for more than a decade.
Draft Regulation to Impose Strict Measures on Vietnam’s Commercial Joint-Stock Banks
Oct. 8 – The State Bank of Vietnam released a new draft regulation that would impose stricter measures for establishing commercial joint-stock banks.
This serves the purpose of regulating the stability of the local banking system.
New banks are now required to have a charter capital of VND3 trillion while existing joint-stock banks must have at least VND1 trillion in charter capital by the year's end.
“ The message is clear. That is, to limit weak banks from joining the local market amid increasing concerns about the spreading global-economic turmoil,” Vo Tri Thanh, director of the Department for Trade Policy and International Economic Integration Studies under the Central Institute for Economic management (CIEM), told Vietnam News.
Vietnam to Increase Electricity Prices Next Year
Oct. 8 – The state-owned Electricity of Vietnam (EVN) has been tasked to submit plans to increase power prices gradually beginning next year.
EVN will be using the extra capital to invest in more power generation projects.
The Deputy General Director of EVN, Dinh Quang Tri, told media that the price hike should encourage local and foreign investment in the industry and lead to efficient use of power.
“The Ministry of Industry and Trade will coordinate with other ministries and sectors to decide the rate of the increase, its timing and implementation,” Minister of Industry and Trade Vu Huy Hoang told Thanh Nien News.
Vietnam’s Foreign Investment Climate
By Chua Siew Joo
Sept. 28 – In the first nine months of 2008, investment by foreign businesses in Vietnam exceeded US$57.12 billion, almost a fivefold year-on-year increase, according to Vietnam's Foreign Investment Agency. Vietnam’s foreign direct investment for 2007 amounted to US$20.3 billion.
The Foreign Investment Agency revealed that the capital for new projects amounted to US$56.2 billion; projects in industry and construction accounted for 57 percent and 55 percent of the total FDI and the overall number of projects respectively. Meanwhile, the service sector attracted FDI of US$23.7 billion for 361 projects; the agriculture, forestry and fisheries sectors attracted FDI of US$1.12 billion.
Vietnam’s Revised Corporate Income Tax
Sept 26 – Vietnam’s National Assembly approved the new Corporate Income Tax (CIT) reduction from 28 to 25 percent on June 3, 2008. Finance Minister Vu Van Ninh told Thanhnien News that the loss of tax revenue of VND5 trillion will be worthwhile in order to allow companies in Vietnam to become more competitive.
The revised incentive regime provides two preferential tax rates, the 20 percent tax rate which will apply for 10 years and the 10-percent tax rate which will apply for 15 years; it dropped the 15 percent tax rate.
Malaysian Steel Company to Invest in US$9.8 Billion Steel Mill Venture
Sept. 24 – Vietnam has approved the joint venture deal between Malaysia’s Lion Industries and Vietnam’s shipbuilding group, Vinashin, for a US$9.8 billion steel mill.
The steel mill will be located in the south-central province of Ninh Thuan with an annual capacity of 14.42 million tons.
According to a statement from Ninh Thuan’s People’s Committee, construction should begin by next year and be completed in 2025. The first phase of the project will cost about US$2.75 billion.
The details of the deal, like how much each company would invest, still has not been released.
Vietnam’s Consumer Price Index Rises by 0.18%
Sept. 23 – According to Vietnam’s General Statistics Office, the consumer price index for September rose by only 0.18 percent.
It is the lowest monthly gain since the start of the year.
The CPI increases registered in seven out of ten essential commodity groups, with cultural, sports and entertainment services having the highest price hike of 1.45 percent, along with educational services with 1.4 percent.
Trade Ministry Proposes Changes to New Import Licensing System
Sept. 23 – Vietnam's Ministry of Industry and Trade (MIT) has proposed changes to the new import licensing system that could limit the categories of imports that need to be registered and reduce trade deficit.
The current system,which took effect on Aug. 21, has been costing importers millions of dong.
Currently, all import license applications are processed at MIT’s Department of Documents in Hanoi.
The new import licensing regulation requires companies to obtain licenses to import items such as automobiles, motorbikes, machines, mobile phones, fruit, coffee, tea, cooking oil, meat, sugar, cocoa, vegetables and specific products made from iron, steel and aluminum.
Vietnam Approves US$87 Million Bridge Connecting Mekong Provinces
Sept. 23 – Vietnam's Transport Ministry has approved a VND1.49 trillion (US$87.6 million) bridge project that will connect the Mekong Delta provinces of Tien Giang and Long An.
The 1,390 meter My Loi bridge will span over the Soai Rap river and will be built on the National Highway route.
Construction is set to begin in 2009 and finish within 30 months. Once completed, it will allow ships of up to 10,000 tonnes to enter the Soai Rap river.
