As the Vietnam economy continues to move on post Covid-19, there are optimistic signs that Vietnam’s economy is gradually recovering and regaining its growth momentum. In other news last week, Minister of Industry and Trade Tran Tuan Anh and EU Trade Commissioner Phil Hogan reached consensus on the point of time for the EU-Vietnam Free Trade Agreement (EVFTA) to take effect during their phone call on June 8. Accordingly, both sides plan to have EVFTA take effect on August 1.
The past week spotlight
EVFTA hoped to take effect on August 1
Photo: Minister of Industry and Trade Tran Tuan Anh talks over the phone with EU Trade Commissioner Phil Hogan on June 8
The EVFTA sailed through the Vietnamese NA on June 8 with the support of all lawmakers present at the plenum.
Under Article 17.16 of this deal, the EVFTA will take effect on the first day of the second month after the month when both sides inform each other about the completion of corresponding legal procedures for the enforcement, or another date agreed on by both sides.
As the EU already gave the notification to Vietnam in April, Vietnam’s coming announcement will also set the date for the EVFTA to take effect for both sides, August 1 as expected.
Let’s look at some other related financial and business news during the past week:
1. Transfer pricing among FDI firms in Vietnam at alarming rate: State Audit
While FDI firms continue to report losses, they keep expanding operations in the country.
Transfer pricing among foreign-invested firms operating in Vietnam is increasing at an alarming rate, evidenced by the fact that while foreign-invested companies report losses, the majority of their Vietnamese peers in the same fields are generating profits, especially in garment and footwear, according to Doan Xuan Tien, deputy State Auditor General.
3. Gov’t proposes reducing income tax by 30% for small firms
Authorized by the prime minister, Minister of Finance Dinh Tien Dung on June 11 submitted a draft resolution to the National Assembly (NA) to offer a 30% corporate income tax cut for small businesses and cooperatives in 2020.
4. Australia initiates anti-dumping investigation on painted steel trapping from Viet Nam
Australia’s Anti-dumping Commission has initiated an investigation into alleged dumping and subsidisation on painted steel trapping exported to Australia from China and Vietnam, according to the Trade Remedies Authority of Vietnam.
5. Tax relief stimulus may inflate Vietnam's fiscal deficit in 2020: Fitch
Fitch Solutions, a subsidiary of Fitch Group, has revised its forecast for Vietnam’s fiscal deficit (excluding debt principal repayments) to be 6.4% of GDP in 2020 (from 6.0% of GDP previously), almost double of 3.4% in 2019.
Fitch Solutions’ deficit forecast is wider than the Ministry of Finance (MoF)’s 5.0-5.1% deficit estimate, which already reflects the authorities’ view for a wider deficit versus their initial 3.4% target set for 2020 back in December 2019.
8. PM: Ensuring Vietnam is a safe destination the top priority
Ensuring that Vietnam is viewed as a safe destination for sustainable development is the primary goal of the country’s post-COVID-19 response in the new normal, Prime Minister Nguyen Xuan Phuc told a meeting with permanent government members on June 9 in Hanoi.
10. Experts see golden opportunities for Vietnam as the US’s preferred partner
Vietnam needs to grab opportunities to reduce its trade surplus with the US.
Adam Boehler, CEO of the Development Finance Corporation (DFC), at the working session with the Vietnamese Ambassador to the US Ha Kim Ngoc on June 2, said that DFC is implementing a series of plans to support investment projects in developing countries, especially projects in the fields of energy, infrastructure and digital economy.
Mazars Vietnam together with MoF, Smart Train and ACCA Vietnam will be hosting a webinar named “How to apply IFRS and tips for successful conversion”. This webinar is designed with the purpose of helping a wide range of entities in IFRS conversion.
The business landscape in the last year has changed, with many being moved out of their comfort zones and regularities. As businesses focus on re-calibrating and driving new possibilities, human capital remains equally, if not more, important.