Tobacco firm ordered to pay over $18.2 mil in overdue tax, fines

The Dong Nai Tax Agency has ordered British American Tobacco - Vinataba (BATVJ) to pay over VND263 billion (US$13.5 million) worth of overdue taxes from 2005-2008.

The joint venture between the London-headquartered British American Tobacco and Vietnam Tobacco Corporation, set up in 2002, was also fined over VND91 billion ($4.7 million), the agency said.

According to Dong Nai Tax Agency, BATJV was allowed to enjoy income tax exemption for the first two years of operation and pay 50 percent of income tax for three years thereafter, if they met certain conditions.

The conditions were that the company should be using at least 40 percent of locally grown tobacco plants for operations by 2009.

They were required to set up contracts to buy from Vietnamese tobacco farmers, according to the agency.

However, an agency investigation last month found that the company did not buy tobacco leaves from farmers but from local companies.

In 2008, the company spent VND126 billion out of VND2.8 trillion on locally grown tobacco. This amounted to 4.4 percent instead of the committed 40 percent, it said.

BATJV also failed to teach farmers modern techniques for growing tobacco as committed, except for a VND2.7 billion ($143,737) project in 2008 to train farmers and technicians, the agency said.

The tax agency has reported the case to the Dong Nai People’s Committee. A source told Thanh Nien that BATJV has also lodged a complaint with the provincial authorities about the agency’s decision.

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Drug material import to double in five years

HCMC – Vietnam will see its demand for pharmaceutical material imports to double within the next five years to some US$1 billion a year as local production is still undeveloped, the National Agency for Science and Technology Information said.

Phung Minh Lai, deputy director of the sci-tech information agency, told reporters at a press briefing over the weekend that “the cost for imported materials for medicine production will expectedly rise to US$1 billion a year from 2015.”

Lai, whose agency held the press briefing to call attention to an exhibition named Analytica Vietnam 2011 for technologies, analysis, biotechnology and diagnostics, said Vietnam last year spent US$480 million on imported drug materials out of the total US$1.5 billion of medicine import value.

Though Vietnam has set a target of achieving an annual growth in the drug-related chemical industry by 15%, its pharmaceutical chemistry is still undeveloped compared to the increasing demand for chemical products, the agency said.

The pharmaceutical chemistry sector is just able to produce some simple substances and limited types of products on simple technologies, according to the agency, which said the country would need to build six pharmaceutical chemistry plants by 2015.

Analytica Vietnam 2011 will be held in HCMC on April 7-9 next year by Munich Exhibition Company in collaboration with the National Agency for Science and Technology Information.  

Lai said that the exhibition would be a good opportunity for both local and international partners to exchange information in the field of technologies, analysis, biotechnology and diagnostics. This is the second Analytica Vietnam exhibition to be held in Vietnam after the first one in Hanoi last year, which attracted some 75 companies from 11 nations worldwide.

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FDI rockets up in August

HCMC – Foreign direct investment (FDI) in Vietnam has shot up this month to nearly US$2.5 billion, almost doubling the monthly average US$1.3 billion in the first half, and taking it to US$10.79 billion for the year so far.

It’s a sharp contrast to FDI in the previous three months: US$1.5 billion in May, US$800 million in June and just slightly over half a billion dollars last month.

August saw 125 projects licensed, according to a report from the Ministry of Planning and Investment’s Foreign Investment Agency.

In the year to date, 658 foreign-invested projects worth some US$10.79 billion have been licensed, up 41% year-on-year, according to the agency.

However, the amount of capital added into 143 existing projects in the period is only US$787 million, down 85.8% from the same period last year.

According to the agency, the total investment in the country so far this year, inclusive of additional funds into operational projects, is about US$11.6 billion, 87.7% of the same period last year.

The agency predicts Vietnam to receive US$22-25 billion in newly registered and additional FDI capital this year, an increase of 5-10% from 2009, owing to the recovery of the global economy. New FDI approvals in 2009 plunged as much as 70% from the previous year due mainly to the economic crisis.

The agency reported the real estate sector has attracted close to US$2.39 billion of registered capital in the first eight months, taking the third position of the total FDI commitment, after the processing and manufacturing industry sectors with US$3.66 billion and the sectors of power and water with US$2.94 billion.

According to the agency, FDI disbursements in Vietnam total about US$850 million this month, taking the January-August figure to US$7.25 billion, up 3.6% from the same period last year.

Given the average monthly disbursement of around US$900 million, it is predicted that FDI disbursement will reach US$11 billion this year, slightly higher than last year’s figure of US$10 billion.

It is widely recognized that in FDI attraction, disbursement is more significant than commitment, and quality is more important than quantity.

Foreign invested enterprises have this year benefited from the regional recovery, as seen in their trade values. Exports have surged 26.6% over the same period to some US$23.96 billion. If crude oil export is excluded, this value is still more than US$20.6 billion, up 39.9% year-on-year.

Meanwhile, the FDI sector has also spent US$22.37 billion on imports, up 43.6% year on year.