Chaos marks cooking gas market

A decree regulating the price of cooking gas, which became effective
earlier this month, has failed to contain chaos on the market in HCM
City.

Earlier this month, following a global gas price
hike, domestic gas-trading companies raised prices by 14,000-15,000 VND
for each 12-kilo cylinder, with prices around 272,000 VND a cylinder.

Many customers in HCM City are paying 275,000 VND for a 12-kilo
cylinder from Sai Gon Petro and VT gas, and 280,000 VND for Total gas.

Gas-trading companies have conceded that they did a poor job of managing sale prices offered by retail agents.

Retail shops are reportedly selling cooking gas at prices higher than that specified by gas companies.

Currently, most gas companies sell products via wholesale agents, who
then sell to other agents and retail shops on the basis of a buy-sell
contract.

This can lead to one business being an agent for different brands of gas.

While gas companies can only manage gas prices at wholesale agents,
retail prices to end-users are decided by agents and retail shops.

Since every gas company has its own policy for their agents, agents
will focus on promoting gas products that offer higher profits.

Le Thi Anh Man, deputy general director of the Sai Gon Petro Gas Co,
said some 650 retail shops had signed contracts to sell gas produced by
her company.

However, the company faces difficulties in price management of these retail agents.

If her company forced retailers to strictly follow the company's
regulations, the agents would shift to another company, she said.

However, several gas agents have even filled cooking gas canisters and
sold fake products, according to gas production companies.

One customer in Go Vap District said she discovered that she had
purchased a fake gas canister as the gas was empty after 18 days of use
instead of one month.

Late last month, police discovered
many gas cylinders with a weight much lower than that listed on the
cylinder at Tin Nghia II gas establishment in the southern province
of Binh Duong .

The country has more than 80 gas-trading
companies, but only 60 of them have a registered trademark for their
empty gas cylinders.

Local task forces said fake gas accounts for 30 per cent of the total gas volume being marketed in Vietnam .

To avoid buying fake gas cylinders, customers must examine canisters to
see if they are lighter than normal, have unclear logos or an
inconsistent colour on the seal, according to the Market Management
Department of HCM City./.

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State urges petrol dealers: ‘buy local'

The Ministry of Industry and Trade has asked PetroVietnam and the Dung
Quat Oil Refinery to work directly with domestic petrol dealers,
particularly Petrol-imex, to reduce reliance on imports.

The Vietnam National Oil and Gas Group (PetroVietnam) and the refinery
must report preliminary plans for production, consumption and stock of
Dung Quat's products by Friday, the ministry said.

PetroVietnam and the refinery should also work out a detailed plan for
production in 2011, the ministry said. It also called on the firms to
boost consumption of the refinery's products, including petrol for
airplanes, on the domestic market as early as possible.

So
far, nine out of 11 petrol importers in Vietnam buy the refinery's
products. In the first nine months of this year, the refinery's petrol
and oil sold on the domestic market accounted for 35 percent of the
total volume sold.

The Vietnam National Petroleum
Corporation (Petrolimex), which has a 50 percent share of the domestic
petrol and oil market, consumed 28 percent of the refinery's total
output of petrol and oil.

However, domestic petrol
consumption is 10 percent lower than predictions for this year, while
production at the refinery was now exceeding the year's plan by 25
percent, Pham Dinh Thuc, PetroVietnam's general director, said.

In the fourth quarter of this year, the refinery is expected to produce
about 1.9 million tonnes of petrol, while domestic petrol distributors
such as PVOil, Petec and Petrolimex have registered to buy just 430,000
tonnes from the refinery.

As a result, stockpiles have reached 75,000 tonnes and are predicted to reach 727,000 tonnes by the end of the year.

Domestic importers should revise their signed contracts to import fuel and buy up the difference from Dung Quat, Thuc said./.

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Tax changes to save firms money

The General Department of Taxation (GDT) is mulling a tax reform
programme that will help small- and medium-sized enterprises (SMEs) pay
dues more easily while saving time and money by reducing the amount of
paper work required.

Under the programme, the GDT will
set a tax threshold. Firms whose revenue turnover is below the stated
threshold will be exempted from paying value-added tax.

The taxes levied, which include value-added and special consumption
taxes, will be declared and paid every quarter instead of once a month,
as is the case now.

Businesses whose earnings are above
the exemption level but below the VAT threshold, will have two ways of
calculating the tax owed.

They will be able to declare
value-added and income taxes on a defined percentage of their revenue or
they will be allowed to pay a fixed rate for the entire year.

The GDT expects to submit the new tax procedures to the Government and
Ministry of Finance for approval next year as part of a general tax
reform administrative programme.

If approved, the new
policies will directly affect more than 290,000 companies, 1.8 million
family-run businesses and millions of workers who pay income tax, while
helping to save about 600 billion VND (30.7 million USD) per year.

According to the GDT, SMEs have a total turnover of less than 300
billion VND (15.4 million USD) each. SMEs account for 92 percent of all
Vietnamese companies, but pay just 24 percent of the total corporate
income tax amount.

The GDT has simplified 271 out of 330
administrative tax procedures, which has helped to save 1.9 trillion VND
per year (97.4 million USD). One of the most significant changes was to
allow companies to print and use their own invoices, which alone helped
to save 400 billion VND (20.5 million USD) per year.

Meanwhile, the GDT is modifying 24 new draft amendments and supplements to Circular 130 relating to corporate income tax.

The GDT said that under the current Corporate Income Tax Law, companies
were allowed to deduct losses caused by natural disasters, epidemics
and force majeure from their tax bills if they do not receive
compensation.

The new draft circular requires businesses
who lose property to contact the tax office directly about losses
incurred. Companies must state their property's value and the value of
the goods lost according to the valuation council.

They must also state what insurance compensation they had received or were likely to receive and the insurance companies used.

Those records must be certified by commune-level police or the ward or commune people's committee chairman.

The draft states that a firm must state what losses have been incurred
from fines or breach of contract. These costs will be tax deductible./.

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Over 100 Vietnamese firms to attend China-ASEAN Expo

More than 100 Vietnamese businesses will take part in the seventh
China-ASEAN Expo (CAEXPO 2010) scheduled for Oct. 20-24 at the Centre
for Conference and Exhibition in Guangxi province, China.

About
170 Vietnamese booths at the expo will display agricultural, forestry
and fishery products on, processed food, wooden furniture and
handicrafts, and introduce projects calling for investment, trade and
tourist services, according to the Trade Promotion Department under the
Ministry of Industry and Trade.

Apart from promoting the
Vietnam trademark and exports, the expo will offer opportunities for
Vietnamese businesses to access and attract distribution and investment
channels, and promote advantages from integrating into the ASEAN-China
Free Trade Area.

According to the Ministry, two-way trade between
Vietnam and China rose from 20-25 percent in recent years. China
is first among exporters to Vietnam and ranks third among Vietnam
’s importers.

In the first six months of this year, two-way trade
between the two countries reached 11.9 billion USD, of which Vietnam
’s exports rose 45 percent to 2.8 billion USD over the same period last
year.

The two-way trade is expected to reach 25 billion USD for the whole year./.

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Free trade deals give boost to Vietnam exports

Photo: AFP

Import tariff cuts under free trade agreements signed with several countries in the region have helped boost Vietnam’s exports this year.

Vietnam concluded a bilateral FTA with Japan last year and has multilateral FTAs with other countries like China, Korea, Japan, Australia, and New Zealand signed under the aegis of ASEAN of which it is a member.

Around 21 percent, 79 percent, 28 percent, and 13 percent of Vietnam’s exports to China, Korea, Japan, and ASEAN member nations enjoy tax cuts under FTAs.

Saigon 3 Garment Co’s exports to Japan have surged 20 percent to US$55 million, its chairman, Pham Xuan Hong, said.

Agreements between Southeast Asian countries and Korea that cut taxes on textile and apparel products from 13 percent and 8 percent have driven Vietnam’s export earnings in the year to date to $220 million, up 60 percent, Le Van Dao, general secretary of the Vietnam Textile and Apparel Association, said.

The deal with Korea, which has also seen seafood import taxes cut from 20-28 percent to 13-20 percent, has lifted exports.

Tax on Vietnamese fruit exports to China, which used to be 12-24 percent, has been abolished, helping exporters gain a foothold there, Huynh Quang Dau, deputy chairman of the Vietnam Fruit Association (Vinafruit), said without elaborating.

However, Vietnamese businesses have not made optimum use of the FTAs.

While some actively promote their products in these countries, many wait for contracts to “drop in their laps,” Hong of Saigon 3 Garment said.

It is foreign firms who are searching for potential Vietnamese partners, he added.

Technical barriers, mostly related to product origin declarations, packaging, and labeling standards, are still keeping Vietnamese fruits out of to China, Vinafruit said.

But Le Quang Lam, deputy head of the Ministry of Industry and Trade’s Multilateral Trade Policy Department, said they are important issues to which Vietnamese exporters must pay attention when taxes come down.

However, the websites of the ministry, Ho Chi Minh City Trade Promotion Center, Vietnam Chamber of Commerce and Industry, and many business associations do not have updated or information about FTAs and are not user-friendly.

Only the National Committee for International Economic Cooperation’s website at www.nciec.gov.vn/index.nciec??242 is reasonably useful.

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Negotiations begin for Vietnam-Russia trade deal

Vietnam began negotiations for a Free Trade Agreement with the Customs Union of Russia, Belarus and Kazakhstan in Hanoi Monday.

An FTA between the two sides will bring huge mutual economic, trade, and investment benefits, a Ministry of Industry and Trade official said on the sidelines of the meeting.

This first meeting is an important step towards the agreement, Dang Hoang Hai, head of the ministry’s European Department, said.

Russia sees Vietnam as a gateway to Asian countries, especially ASEAN members, he said.

An FTA will help Vietnam push agricultural, seafood, and garment products to Russia, he added.

Russia exports fertilizers, oil and gas, atomic energy, heavy industrial goods, and automobiles to Vietnam.

Bilateral trade is estimated to rise to US$3 billion next year and $10 billion in future, a significant figure considering Vietnam’s trade with the EU is less than $10 billion.

To promote Vietnam’s strategic partnership with Russia, leaders form the two sides have agreed to sign an FTA in the near future.

Negotiations will cover three main issues: customs barriers, services and investment, and intellectual property.

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Tax changes to save firms money

A worker operates a paper rolling machine at Xuan Duc Joint Stock Company, considered a small- and medium-sized business. — VNA/VNS Photo Pham Do

HA NOI — The General Department of Taxation (GDT) is mulling a tax reform programme that will help small- and medium-sized enterprises (SMEs) pay dues more easily while saving time and money by reducing the amount of paper work required.

Under the programme, the GDT will set a tax threshold. Firms whose revenue turnover is below the stated threshold will be exempted from paying value-added tax.

The taxes levied, which include value-added and special consumption taxes, will be declared and paid every quarter instead of once a month, as is the case now.

Businesses whose earnings are above the exemption level but below the VAT threshold, will have two ways of calculating the tax owed.

They will be able to declare value-added and income taxes on a defined percentage of their revenue or they will be allowed to pay a fixed rate for the entire year.

The GDT expects to submit the new tax procedures to the Government and Ministry of Finance for approval next year as part of a general tax reform administrative programme.

If approved, the new policies will directly affect more than 290,000 companies, 1.8 million family-run businesses and millions of workers who pay income tax, while helping to save about VND600 billion (US$30.7 million) per year.

According to the GDT, SMEs have a total turnover of less than VND300 billion ($15.4 million) each. SMEs account for 92 per cent of all Vietnamese companies, but pay just 24 per cent of the total corporate income tax amount.

The GDT has simplified 271 out of 330 administrative tax procedures, which has helped to save VND1.9 trillion per year ($97.4 million). One of the most significant changes was to allow companies to print and use their own invoices, which alone helped to save VND400 billion ($20.5 million) per year.

Corporate income tax

Meanwhile, the GDT is modifying 24 new draft amendments and supplements to Circular 130 relating to corporate income tax.

The GDT said that under the current Corporate Income Tax Law, companies were allowed to deduct losses caused by natural disasters, epidemics and force majeure from their tax bills if they do not receive compensation.

The new draft circular requires businesses who lose property to contact the tax office directly about losses incurred. Companies must state their property's value and the value of the goods lost according to the valuation council.

They must also state what insurance compensation they had received or were likely to receive and the insurance companies used.

Those records must be certified by commune-level police or the ward or commune people's committee chairman.

The draft states that a firm must state what losses have been incurred from fines or breach of contract. These costs will be tax deductible. — VNS

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