The Viet Nam Automobile Transport Association (VATA) is pressing for favourable policies to help them overcome financial difficulties amid mounting fuel costs and the growing competition from unofficial drivers.

VATA Chairman Nguyen Van Quyen said Circular No 03 issued by the State Bank of Vietnam (SBV) had allowed automobile transport firms to have their loan repayment date extended to December 31, 2022.

However, many firms were so hard hit by the pandemic that they missed the deadline and had their loans classified as group 5 non-performing loans. As such, they have been disqualified from taking out new loans for recovery.

In the face of such a situation, VATA urged SBV to offer more loan extensions to the firms and not to re-classify their overdue loans. Additionally, SBV is urged to hold new loans open to firms in arrears as long as they have plausible business plans.

The same goes for Decree No 34, which has pushed back tax payment dates to December 31, 2022. The chairman said many firms had had their bank accounts frozen for reasons of failure to pay taxes by the due date.

"Firms falling behind on tax payments have had their bank accounts suspended by tax authorities," said Quyen.

VATA urged the Ministry of Finance and the General Department of Taxation to extend the due date to September 30, 2023, to support firms in financial hardship and maintain the value-added tax rate of 8 per cent to stimulate domestic consumption.

Additionally, VATA called for the reduction of registration tax to 2 per cent to incentivise higher investments in new vehicles.

The chairman also said due to the unfavourable economic situation many automobile transport firms had fallen into arrears with their social insurance premiums.

The failure to pay social insurance premiums to Viet Nam Social Security has led to the situation that their employees have had their health insurance cards rendered invalid. That means the employees would not be entitled to health insurance payments if they incur costs of medical care.

For this reason, VATA urged the Ministry of Labour, Invalids, and Social Affairs and the Viet Nam Social Security to extend the due date of premium payment to June 30, 2023, to give them more room for recovery.

For firms unable to pay social insurance premiums, health insurance premiums, and unemployment premiums collectively, VATA suggested their employees be entitled to health insurance payments once the firms fulfil their health insurance liability, rather than having to fulfil all three liabilities as usual.

VATA also called for the write-off of the interest payments incurred by the firms between March 2020 to December 31, 2022, to relieve their financial burden. 

One more foreign airline opens Taipei - Da Nang direct air route

A flight of Tigerair Taiwan, carrying 170 passengers from Taipei (China), landed at Da Nang International Airport in the central city of Da Nang on December 24 evening, marking the launch of the carrier’s first route to Vietnam.

The Taipei - Da Nang air route is operated with a frequency of 2 return flights per week.  Flights from Taiwan's Taoyuan International Airport depart at 4:40pm (local time) on Wednesdays and Saturdays, while return flights take off in Da Nang International Airport at 7:40pm (local time) the same days.

According to Chen Han Ming, President of Tigerair Taiwan, Vietnam is one of the key regions for Tigerair Taiwan's future activities.

The Taiwanese airline plans to open Taipei - Nha Trang and Taipei - Phu Quoc routes in the first quarter of 2023, he said.

Chen Tung Chieh, one of the passengers on the first flight to Da Nang said she knew Da Nang through promotion programmes on TV and Internet. During her stay in Da Nang, she wanted to visit some of the city’s famous destinations such as Ba Na Hills tourism complex.

Deputy Director of the municipal Tourism Promotion Centre Mai Thi Thanh Hai said the launch of more direct international flights from Taipei to Da Nang will help attract more foreign visitors to Da Nang and Vietnam in general, contributing to promoting the recovery of international tourism in the coming time.

Localities exert efforts in stimulating tourism demand

Many localities across the country are making every effort to promote their tourism potential to international markets while stimulating domestic demand in the coming time, with the aim of capitalising on the travel season at the year's end.

According to the Department of Tourism of the northern coastal province of Quang Ninh, after the East Asia Inter-Regional Tourism Forum (EATOF 17), the locality welcomed large groups of foreign visitors from the Republic of Korea, Malaysia and France.

This is considered an important step for Quang Ninh to continue implementing concerted solutions towards realising its goal of serving 11.5-12 million visitors in 2022.

Director of the department Pham Ngoc Thuy said Quang Ninh will strive to increase the effectiveness of tourism connections with other localities, especially those in the south, and further exploit international markets that are showing signs of stable growth such as the RoK, Japan and India.

The locality will organise more activities in the year-end season to attract visitors, while holding tourism promotion events in the target countries, aiming to open direct air routes from Van Don international airport to these markets.

The central city of Da Nang recently hosted the Vietnam International Travel Mart, featuring around 350 booths, including 50 of foreign firms. It attracted 2,000 domestic and foreign enterprises, and 30,000 visitors.

The municipal authorities have also organised many promotion events in Europe, the RoK, Singapore, India and Japan, towards restoring international air routes from the countries to Da Nang.

According to the Hanoi Department of Tourism, the capital city welcomed over 17 million visitors in the first 11 months of 2022, five times higher than the figure reported in the same period the previous year.

Notably, the Hanoi Tourism Ao Dai Festival, which took place from December 2-4, attracted over 30,000 visitors. The department plans to coordinate with related units to make the festival an annual event to attract more tourists to the city.

Meanwhile, the Department of Tourism of the Mekong Delta province of Kien Giang reported that the locality received more than 7 million visitors in the last 11 months, raking in nearly 9.67 trillion VND (over 407.8 million USD) in revenue, exceeding the target by 24.8%.

Phu Quoc city alone welcomed over 4.7 million visitors, including 191,700 foreign arrivals.

According to Nguyen Quoc Ky, Chairman of the Board of Directors of giant tour operator Vietravel Holdings, it is necessary to accelerate the full resumption of air routes, open tourism promotion offices abroad, and ensure the quality and quantity of human resources for the tourism sector, thus developing the industry into a spearhead economic sector of the country.

Exporters advised to meet origin regulations to optimise EVFTA advantages

Due to a lack of knowledge about origin regulations, many Vietnamese firms have yet to optimise advantages from the EU-Vietnam Free Trade Agreement (EVFTA), which has been effective for two years and generated great benefits for both sides, according to insiders.

Trinh Thi Thu Hien, head of the Goods Origin Division under the Ministry of Industry and Trade’s Import-Export Department said that from January 1, 2023, the mechanism for certification of origin (C/O) for goods destined for the EU will follow the regulations and the certification mechanism of origin within the framework of this deal.

Specifically, for shipments worth more than 6,000 EUR, exporters must have the C/Os form EUR.1 granted by agencies authorised by the Ministry of Industry and Trade. The declaration for and granting of C/Os will be carried out similarly to those of the current C/Os, she said at a seminar on December 9.

Hien advised businesses to set up a document archive system so that they are always ready to provide them if necessary.

Meanwhile, Dang Thi Hai Binh from the General Department of Vietnam Customs said that businesses should ensure that their goods meet the regulations of both Vietnam and the EU.

She said that from January 1 when the generalised scheme of preferences (GPS) terminates and any preferential tariff agreement under the FTA framework will be applied, businesses should clearly define whether their goods meet regulations of the framework or not.

According to the Ministry of Industry and Trade, a number of circulars will be issued to replace old ones, with many contents that aim to create favourable conditions for businesses.

Phan Thi Thanh Xuan, Vice President and General Secretary of the Vietnam Leather, Footwear and Handbag Association said that the sector hopes to coordinate with State management agencies such as the Ministry of Industry and Trade and the customs sector to organise training activities and dialogue to support businesses to increase their shares in the EU market.

Hien said that the Import-Export Department will give advice to authorised agencies on the drafting of legal documents regarding goods origin to create a legal corridor for export activities.

The department has also been working with relevant agencies and trade associations to hold training sessions for businesses to ensure that they meet the strict regulations in the EU market.

It has coordinated with the customs authorities of import countries to assist domestic firms in proving the origin of their products, while speeding up the administrative reform to remove difficulties facing exporters, she said.

Construction starts for third terminal at Tan Son Nhat airport

Construction of the third passenger terminal at Tan Son Nhat International Airport in Ho Chi Minh City began on December 24.

Attending the ground-breaking ceremony for the project, Prime Minister Pham Minh Chinh said transport infrastructure development, including freight transport infrastructure, is one of the three strategic breakthroughs for the country’s sustainable socio-economic development.

“The diversification of modes of transport is an important factor to boost the improvement of the transportation network,” he said.

The T3 terminal project will contribute to promoting socio-economic development, and ensure security and defence of HCM City and the southern region.

The State-owned Airports Corporation of Vietnam is carrying out the work at a cost of nearly 11 trillion VND (463.2 million USD).

The construction is expected to take 37 months.

The number of passengers going through Tan Son Nhat airport has surged in recent years to nearly double its designed capacity.

The airport has two terminals now, with T1 serving domestic flights and T2 handling international flights. T1 can serve up to 15 million passengers a year and T2, 10 million.

The airport was designed to handle 25 million passengers a year by 2020, but it has been receiving almost 40 million a year since 2017.

Once completed, T3 will handle domestic flights and up to 20 million passengers annually.

With the COVID pandemic ending and the economy showing strong recovery, passenger numbers have surged again as aviation and tourism recover.

This has again caused overcrowding at major airports in the country such as Tan Son Nhat and Noi Bai in Hanoi.

Work to start on 12 component projects of North-South expressway on Jan. 1

Construction will concurrently start on 12 component projects of the second phase of the North-South Expressway project (2021-2025) on January 1, 2023.

Accordingly, the groundbreaking ceremonies will be held in Ha Tinh, Quang Binh, Quang Tri, Quang Ngai, Phu Yen, Binh Dinh, Khanh Hoa, Hau Giang and Ca Mau provinces.

The second phase of the expressway project consists of 12 component projects with a total length of 723.7km, of which the Ha Tinh-Quang Tri section is 260.9km, Quang Ngai-Nha Trang 352.1km and Can Tho-Ca Mau 110.9km.

The total investment is initially estimated at nearly 147 trillion VND (6.23 billion USD).

Trade surplus increases, agriculture shines

Vietnam enjoyed a trade surplus of nearly 11 billion USD in the first 11 months of 2022, of which the agricultural sector contributed significantly with 7.82 billion USD.

The Ministry of Industry and Trade previously forecast that the balance of trade in 2022 would present a surplus for the seventh consecutive year, with about 1 billion USD. But in fact, the figure jumped to 10.6 billion USD after 11 months, 10 billion USD higher than the same period last year. Export continues to be a bright spot in Vietnam's economic picture in the period.

According to the General Statistics Office, the import-export turnover in January-November hit nearly 674 billion USD, of which 342.2 billion USD came from exports, up 13.4% year-on-year, and the remaining from imports, up 10.1%.

However, the trade balances of the domestic and the FDI sectors are adverse. If the domestic sector had a trade deficit of 27.97 billion USD after 11 months, the FDI sector (including crude oil) recorded a trade surplus of 38.57 billion USD. The FDI sector also contributed 74.4% of the total export turnover.

In the period under review, agro-forestry-fishery exports stood at about 49.04 billion USD, higher than last year’s record of 48.6 billion USD.

The 11-month export rose 11.8% year on year while imports increased 6.9% to some 41.22 billion USD, resulting in a surplus of 7.82 billion USD – up 47.8%.

That made up a total trade of 90.26 billion USD, rising 9.5% year on year, statistics show.

Although orders tend to decrease due to high inflation in many major markets in the year-end, the sector’s export turnover this year is expected to reach 52.5-53 billion USD, nearly 3 billion USD higher than the set target.

PM launches passenger terminal construction project

Construction work started on the third passenger terminal at Tan Son Nhat International Airport in Ho Chi Minh City on December 24, in the presence of Prime Minister Pham Minh Chinh.

In his address at the ground-breaking ceremony for the project, the Vietnamese Government chief said transport infrastructure development, including freight transport infrastructure, is one of the three strategic breakthroughs for the nation’s ustainable socio-economic development.

The diversification of modes of transport is an important factor in ameliorating the transportation network, Chinh said.

The project is set to take 37 months and will contribute to spurring socio-economic development, and ensure security and defence of HCM City as well as the southern region.

The State-owned Airports Corporation of Vietnam is carrying out the work at a cost of nearly VND 11 trillion equivalent to US$463.2 million.

Recent years saw the number of passengers going through Tan Son Nhat airport increase to nearly double its designed capacity.

The airport has two terminals now, with T1 serving domestic flights and T2 handling international flights. T1 can serve up to 15 million passengers a year and T2, 10 million.

The airport was designed to handle 25 million passengers a year by 2020, but it has been receiving almost 40 million a year since 2017.
Once completed, T3 will handle domestic flights and up to 20 million passengers annually.

With the national economy showing strong recovery after the pandemic, passenger numbers have soared again as aviation and tourism activities is gradually recovering.

Parliamentarians of Vietnam, Cambodia visit THACO Group
 
A delegation of the Vietnamese National Assembly (NA) and the Cambodian NA and Senate visited THACO Group in the central province of Quang Nam on December 24.

The working visit was part of an experience sharing programme between the two parliaments.

Founded in 1997, THACO has developed from an automobile trading and repair company into an industrial conglomerate operating in six industries, namely automobile, agriculture, mechanics and supporting industry, investment and construction, trade and services, and logistics.

In Cambodia, it has purchased some companies to form agricultural complexes with a view to converting poor-performing agricultural projects into large-scale, mechanised, circular, and organic ones. As of 2022, it has invested US$717 million in 15,000ha of fruit farming.

Talking to the Vietnamese and Cambodian officials, THACO leaders said the business has joined hands with localities of Cambodia in fighting COVID-19 and providing assistance for Vietnamese people in the country. Besides, it has also helped build roads and technical infrastructure, ensure social security, and develop education in the localities accommodating its projects.

Vice Chairman of the Vietnamese NA Nguyen Duc Hai highly valued THACO’s investment in Cambodia over the last five years and attributed its achievements partly to the support from Cambodian authorities and people, especially in the provinces housing its projects.

He called on Cambodia to continue support for Vietnamese enterprises operating in the country and increase investment chances for other firms. He also asked THACO to boost investment and business activities there, not only in agriculture but also other fields it is strong at such as mechanics, manufacturing, and logistics.

Hai affirmed that effective activities by businesses, including THACO, have helped promote bilateral economic, trade, and investment partnerships, thus contributing to the good neighbourliness, traditional friendship, comprehensive cooperation, and long-term sustainability between the two countries.

Men Sam An, Cambodian Deputy Prime Minister, Minister of the NA - Senate Relations and Inspection, and Chairwoman of the Cambodia - Vietnam Friendship Parliamentarians' Group, applauded THACO’s investment projects in her country which have helped develop modern and large-scale agriculture as well as infrastructure in Cambodia.

She stated that Cambodia always welcomes and creates favourable conditions for Vietnamese firms, including THACO, to operate and expand investment to more fields so as to help strengthen the countries’ all-round cooperation.

Forest carbon market in Việt Nam does not correspond to its potential

The carbon market has been promoted by the international community as an effective financial mechanism to reduce emissions, prevent deforestation and forest degradation, protecting forests. Currently, there are diverse forms of buying, selling, exchanging, and transferring carbon credits around the world.

For the carbon credit trading price, in the voluntary carbon market, the trading price may be lower for exchange, supporting capacity building.

As for the mandatory carbon market, depending on the policy and priority of each country, the price can fluctuate from a few US dollars to hundreds of US dollars per tonne of CO2 depending on the areas' priority levels. These resources will be directed to invest in afforestation, forest restoration, or support communities to improve livelihoods to minimise the impact of forest degradation.

The information was disclosed at the seminar titled "Forest carbon market: results after COP27 and roadmap to build a forest carbon market in Việt Nam” organised by the Directorate of Forestry, Ministry of Agriculture and Rural Development (MARD) in collaboration with the Norwegian Embassy on Tuesday in Hà Nội.

From 2017 to 2019, the world recorded positive signs for the development of the forest carbon market, with nearly US$400 million generated from global voluntary carbon market transactions. At least $5.9 billion has been paid out for forest carbon offset projects globally, and around $1.3 billion has been leveraged by parties to support developing countries' developments in forest protection.

However, these transactions are still not adequate with the true potential of the forestry sector and are influenced by international regulations on the operation of carbon market mechanisms and national policy frameworks.

According to Trần Quang Bảo, Deputy Director of the General Department of Forestry, Ministry of Agriculture and Rural Development, for current voluntary activities in natural forest resources that are the property of the State, these natural forests are assigned to organisations, individuals and communities.

As for companies that buy and sell at market prices, specific negotiations are needed to ensure reimbursement of the investment value of forest planters or investment from the State budget.

In addition, the Ministry of Agriculture and Rural Development signed a Letter of Intent in 2021 on reducing emissions in the South Central region and Central Highlands from 2022 to 2025, focusing on reducing emissions from forest loss and forest degradation. The expected amount of CO2 being transferred is about 5.2 million tonnes.

Phạm Thu Thủy, Director of the Global Program on Climate Change, Renewable Energy and Low Carbon Development (Cifor - Icraf), said that since COP26 and COP27, there have been foreign organisations that came to Việt Nam with the desire to invest in the carbon market. However, one of the problems these parties are concerned about is the lack of a legal framework.

According to Thủy, to promote the carbon market, it is necessary to have policies and multi-sectoral coordination to address the causes leading to deforestation and forest degradation. Policies and support for behaviour change include financial incentives as well as non-financial incentives.

Agreements between countries and the new step of Article 6 at COP27 regulating the operating principles of carbon markets present both opportunities and challenges for countries, including Việt Nam in the design and implementation of forest carbon markets in an efficient way. 

Malaysia’s Selangor State seeks to boost tourism ties with Viet Nam
     
Tourism Selangor, the tourism promotion agency of the Malaysian state, sent its officials to Viet Nam last week for a working visit to discuss co-operation with their Vietnamese counterparts.

The delegation showcased a wide range of market segmentation in Selangor and the “Splendid Selangor, Take Me Anywhere!” campaign.

The visiting officials expressed their readiness to set up extensive partnerships with tour operators and other industry players.

Last year Selangor only received 6,608 tourists from Viet Nam due to COVID travel restrictions compared to the pre-pandemic number of 27,075 in 2019.

This visit is expected to promote increased awareness of Selangor as an ideal travel destination in Asia and develop more collaborations between tourism operators and tourism industry members in Viet Nam, Hee Loy Sian, Selangor State's Executive Council Member of Tourism and Environment, said.

“With the travel ban lifted, travellers will have a smoother journey to the country. Thanks to the strategic location of Selangor that provides connectedness and accessibility, travellers can easily reach any area in Selangor.”

Selangor offers a wide range of tourism attractions from eco-tourism, theme parks and culture and heritage to shopping and leisure experiences, Tourism Selangor said.

They include the Sunway Lagoon theme park, Fireflies Park in Kampung Kuantan, Mah Meri Cultural Village, and Avani Sepang Gold Coast Resort.

The Selangor delegation visited from December 18 to 23. 

Public investment to bolster stock prices
     
With the Government increasing public investment and speeding up the disbursement progress, many businesses on the stock market will benefit.

On December 6, 2022, the Ministry of Planning and Investment, authorised by the Government, sent a report to the National Assembly Standing Committee on the allocation and disbursement of State budget capital in the first 11 months of this year and the measures to accelerate disbursement of public investment capital in the last month of the year.

By November 30, 2022, the total state budget capital allocated by ministries, central agencies and localities to projects that are eligible for disbursement reached VND550.4 trillion (US$23.3 billion), reaching 94.9 per cent of the assigned plan. The unallocated capital was VND29.64 trillion. Disbursement of public investment capital in 11 months reached nearly VND338.32 trillion, equivalent to 58.33 per cent of the whole year’s plan.

Previously, on November 10, 2022, the Prime Minister sent a request to ministries, branches and localities to accelerate the disbursement of public investment capital in the last months of 2022 and early 2023.

In order to maintain the recovery momentum and positively support the economic growth of the whole year of about 8 per cent in 2022, all levels and sectors need to focus on accelerating the disbursement of public investment capital, considering this a driving force to promote economic growth and a key political task, PM said in the request.

The Government is prioritising resources for public investment, with a plan to disburse up to VND790 trillion in 2023.

Transport infrastructure is one of the key points of the next year's public investment plan as well as that of the 2021-2025 period. Recently, the Ministry of Transport issued a document requesting a number of localities to speed up site clearance for component projects of the construction of the North-South Expressway in 2021 - 2025.

The Ministry of Transport has approved 12 North-South expressway component projects, phase 2 with a total length of nearly 724 km, shortening 5 per cent of the project investment preparation time compared to the previous time, ending the project investment preparation phase and moving on to the project implementation phase.

Airport infrastructure of Long Thanh International Airport project was also started in December 2022.

The policy to promote public investment is forecast to help many businesses on the stock market benefit. For example, in the first 8 months of 2022, Deo Ca Transport Infrastructure JSC (HHV) won more than 10 bidding packages with a total value of nearly VND1.5 trillion.

In the group of building materials, Binh Minh Plastics is considered to have more advantages in terms of input materials from the parent company (SCG Group of Thailand).

Enterprises owning quarries near key projects with large reserves such as Hoa An and Bien Hoa Construction and Building Materials Production (VLB), with the Tan Cang and Thien Tan and Dong Nai quarries also enjoy great benefits. Hoa An in the third quarter of 2022 earned revenue of VND92.8 billion, profit after tax of VND19.1 billion, up 37.4 per cent and more than 11.4 per cent over the same period last year. KBSV believes that the company's profit from the fourth quarter of 2022 will have positive prospects.

For enterprises in the cement industry, public investment is considered a driving force to help improve domestic demand for cement in the context of cement exports being forecast to continue to be less positive. The price of coal accounts for a large proportion of the input costs of cement enterprises, decreased by more than 20 per cent compared to the peak set this year, which will help improve the profit margin of this industry.

Mirae Asset Vietnam Securities Company forecasts that revenue of Ha Tien 1 Cement Co in 2022 and 2023 will reach VND9.34 trillion and VND7.41 trillion, respectively; profit reached VND277.8 billion, down more than 24 per cent compared to 2021 and VND423 billion, up 52.3 per cent over the same period of 2022.

In the steel group, enterprises such as Hoa Phat Group (HPG), Nam Kim Group (NKG) are considered to benefit from public investment, but in fact, the large consumption volume of steel enterprises is still in the area of housing construction and export, so if the domestic real estate is still quiet and export sees difficulties, the business performance of this group will not improve. 

Source: VNA/SGT/VNS/VOV/Dtinews/SGGP/VGP/Hanoitimes