News Bulletin 15 - Week 4 May, 2020
While the coronavirus outbreak has put the global economy under a lockdown, the approval of The EU-Vietnam Free Trade Agreement (EVFTA) is expected to speed up Vietnam’s economic recovery while diversifying its export market. Also, last week, on May 26 2020, Prime Minister Nguyen Xuan Phuc chaired a meeting of permanent Government members in Hanoi to discuss the development of key economic zones (EZs).
The past week spotlight
PM chairs meeting on development of key EZs
Photo: Prime Minister Nguyen Xuan Phuc at the meeting
PM Phuc called for attention to infrastructure in the Mekong Delta, in particular the building of several expressways. Each region and locality must complete public investment capital disbursement this year and strive to fulfill 2020’s socio-economic targets, including those related to economic growth and State budget collection, following the pandemic.
The central key economic zone focuses on the marine-based economy, the automobile ecological system, transportation services, and especially services. The PM suggested developing regional tourism and cooperating with the Central Highlands to form key zones of regional and global scale.
Meanwhile, the southern key economic zone must draw investment in high-tech and value chains and uphold Ho Chi Minh City’s leading role in turning the zone into a driving force of growth in 2020 and the years to come.
Let’s look at some other related financial and business news during the past week:
1. Utilisation of EVFTA requires strict clarity
The upcoming bilateral free trade between Vietnam and the EU may be a tough nut to crack unless the country can make thorough preparations for fulfilling commitments in the deal to further its trade and investment with the bloc.
2. Full-scale audit compulsory to all PPP projects: NA deputies
A full-scale audit should become compulsory for work carried out under public-private partnerships to make sure they are efficient and benefit all stakeholders, lawmakers have told the National Assembly.
The draft law contains regulations related to project preparation, award of contracts, use of public funds for acquiring land and resettling people, and assessment of project efficiency and feasibility.
3. Administrative reforms will help energise VN firms after pandemic
Simplifying administrative procedures is critical to revitalise business after the COVID-19 pandemic.
“Among the measures, the most focused were the simplification of administrative procedures, the cut of business conditions, the reduction of categories of goods and products subject to specialised inspections and the application of digitalisation in state agency operation.”, said Minister, Chairman of the Government Office and Chairman of the Prime Minister’s Advisory Council for Administrative Procedure Reform Mai Tien Dung.
4. FIEs try to evade tax in Vietnam
Vietnam plans to enact a law to fight against the transfer pricing tax in an effort to enforce transfer pricing rules more aggressively, according to Cao Anh Tuan, general director of the General Department of Taxation (GDT).
5. Vietnam to grant e-visa to the citizens of 80 countries from July 1st
Vietnam’s Prime Minister Nguyen Xuan Phuc has just signed the 79/NQ-CP resolution on the list of 80 countries, which their citizens are eligible for the electronic visa (e-Visa) and the list of international border gates, which allow foreigners to enter and exit with e-Visa.
6. Ministry proposes slashing corporate income tax by 30% for small, micro businesses
The Ministry of Finance has proposed that the Government reduce corporate income tax by 30% for small and micro enterprises in 2020 to help them overcome difficulties caused by the Covid-19 pandemic.
7. Transport Ministry proposes State to compensate controversial BOT tollgates
The Ministry of Transport has proposed that the Government compensate developers of two out of four build-operate-transfer (BOT) tollgates and shut them down due to protests among road users. Over the past five years, the ministry has tried to solve issues at 19 BOT tollgates nationwide, mainly those relating to their incorrect locations. However, issues at four BOT tollgates remain unsolved.
8. Vietnam development model needs upgrade: WB
Vietnam has reached an inflection point in its economic development and needs to look for new models, the World Bank says.
In a report it released on Wednesday, ‘Vibrant Vietnam: Forging the Foundation of a High-Income Economy’, the WB said domestic and foreign business environments in Vietnam are volatile, and the nation should not rely too much on past successes and has to make upgrades to its current economic model if it wants to continue to flourish.
9. Vietnam needs fortified investment law to ensure national security: lawmakers
Legislators have stressed the need for foreign investment laws to incorporate the safeguard of national security and defense.
Speaking at a parliamentary session Friday, National Assembly delegate Truong Trong Nghia noted that the Politburo, the Communist Party's decision-making body, had issued a resolution on foreign investment last August that not only highlighted the sector as an important component of Vietnam's economy whose long-term development is encouraged and facilitated, but also called for the addition of provisions on "national defense and security conditions."
10. Many lawmakers do not want to legalize household businesses into enterprises
Several deputies of the legislative National Assembly have expressed their disapproval over a proposal to convert around five million household businesses in Vietnam into enterprises legally.
Want to know more?
Mazars Host & Co-host events
Co-hosted Seminar - October 2020
On 23 October 2020, Le & Associates, together with Mazars Vietnam, VCCI, HAWEE and Business Chambers will be hosting a seminar on the topic "HR Forum: Moving forward to the next normal" with the participation of leading experts in HR, business and advisory.
Co-hosted Webinar - September 2020
On 1 September 2020, Mazars in Vietnam will be joining a webinar on the topic "Ba Ria-Vung Tau: The Next Industrial and Logistics Hub in South Vietnam" hosted by Savills Vietnam and Phu My 3 Industrial Park.
Mazars Webinar - August 2020
On 5 August 2020, Mazars in Vietnam will be hosting a webinar on the topic "Investments and supply chain pivot to Asean countries" with the participation of Mazars representatives from Singapore, Vietnam, Thailand, Malaysia, Indonesia and the Philippines.
Our Tax and legal updates newsletter
Covid-19 Global Tax and Law Tracker
The COVID-19 pandemic is a constantly evolving global health crisis that is creating a huge range of challenges for individuals and businesses around the world. As governments take unprecedented action to prevent the spread of the virus, businesses are facing an ever-more complex environment to operate within.
The Covid-19 outbreak has caused major disruption around the world and our Mazars accross the globe have responded with agility and resilience. In these troubled times, we want to be closer than ever to our clients and support them with relevant advice and insights.