Hanoi (VNA) – The Vietnam Oil and Gas Group (PetroVietnam) has donated 30 billion VND (1.3 million USD) to the COVID-19 vaccine fund in a bid to join hands with the nation to fight the pandemic as well as ensure social welfare and people’s wellbeing.
Following the directions of the Politburo and the Secretariat of the Communist Party of Vietnam on the policy of purchase of vaccines against COVID-19 for the people using the state budget and other legal financial sources, the Government issued a resolution on COVID-19 vaccine purchase and use. Per the resolution, 150 million doses of vaccines will be bought for the injection of about 75 million people. It is estimated to cost some 25.2 trillion VND (1.08 billion USD). Of the total, about 16 trillion VND is expected to come from the central budget, while the remaining 9.2 trillion VND will be sourced from the local budgets and contributions by businesses and organisations.
In order to meet the urgent requirements of pandemic prevention and control, and speed up access to buying and importing vaccines for large-scale vaccination, the Ministry of Finance has asked for Government permission to set up a COVID-19 vaccine fund. The fund aims to receive funding from domestic and foreign organisations and individuals, as well as other legal capital sources for the purchase of vaccines against COVID-19.
To join hands with such efforts and implement its corporate responsibility , PetroVietnam has decided to donate 30 billion VND (1.3 million USD) to the COVID-19 vaccine fund. Of the sum, 5 billion VND was from the mother company PetroVietnam, 10 billion VND from the PetroVietnam Gas Corporation (PV GAS), and 5 billion VND from each of the Vietsovpetro joint venture, Binh Son Refining and Petrochemical Company (BSR), and PetroVietnam Power Corporation (PV Power).
In addition to the above-said units, PetroVietnam will continue to call on its other members to support the vaccine fund.
On the occasion, the group also earmarked 2 billion VND which was raised from its staff to assist the northern provinces of Bac Giang and Bac Ninh, which are the nation’s current hotspots of COVID-19 outbreaks, in the fight against the pandemic.
Its member units and trade union also donated hundreds of millions of VND and items to support front-line medical staff and localities in the effort.
Earlier, to protect the health of 56,000 oil and gas workers amid the complicated developments of the pandemic, PetroVietnam’s trade union offered its members 2.8 billion VND to buy medical supplies and necessities for COVID-19 prevention and control.
So far, staff of the oil and gas sector donated over 70 billion VND to the fight against the pandemic.
The number of domestically-transmitted COVID-19 cases in Vietnam has risen to 4,621 cases, with 24 patients confirmed in the past 12 hours to 6am on May 27, according to the Ministry of Health. Of the new cases, 23 were recorded in Bac Giang province, and one in Lang Son.
As many as 3,051 domestic cases have been logged since the nation was hit by the fourth COVID-19 wave on April 27. Another case was added to the imported infection tally on May 27 morning, raising the imported count of the outbreak to 1,490.
Report from the ministry’s Medical Examination Administration showed that the country has seen 2,853 recoveries and 45 deaths related to the disease.
Since the pandemic has become more complicated, people nationwide are advised to strictly follow the Ministry of Health’s 5K message: khau trang (facemask), khu khuan (disinfection), khoang cach (distance), khong tu tap (no gathering), and khai bao y te (health declaration)./.
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HÀ NỘI — There were 194 new COVID-19 cases detected in Việt Nam from Saturday evening to noon on Sunday, bringing the total number of positive patients to 10,435.
Four of the cases announced at noon on Sunday were imported and the rest local transmissions.
As many as 3,827 patients have been given the all-clear so far, while the death toll rose to 59.
A 76- year-old man living in Thuận Thành District, Bắc Ninh Province, was reported to have died of COVID-related complications. The patient died early morning on Sunday at the National Hospital for Tropical Diseases. He is the 59th person to die with COVID-19 in Việt Nam.
On May 8, the man was transferred to Thuận Thành District’s health centre suffering from pneumonia. He was moved into isolation at Gia Bình field hospital.
On May 21, he was transferred to Bắc Ninh Provincial General Hospital and tested positive for SARS-CoV-2 on May 23. The patient was transferred to the National Hospital for Tropical Diseases on June 3 with a diagnosis of septic shock, multi-organ failure, severe ARDS pneumonia caused by SARS-CoV-2, polyarthritis, and gastrointestinal bleeding due to duodenal ulcer.
Twenty provinces affected by the pandemic have now gone 14 days without any new infections. — VNS
The economic recovery will base on large-scale corporations that are capable to deal with current difficulties.
Economist Nguyen Dinh Luong, former Vietnam’s Chief Negotiator of the US-Vietnam Bilateral Trade Agreement, in an interview with Hanoitimes talked up the role of industry-leading companies in helping the economy overcome Covid-19.
|Economist Nguyen Dinh Luong. Photo: Kinhtedothi|
The making of industry-leading companies is seen as a major step towards building a strong business community that could spur Vietnam’s economic growth. How do you view this vision in the current context of the Covid-19 pandemic?
The recent 13 th National Party Congress has stressed the significance of promoting the development of strong private and state-owned corporations that are capable of competing at regional and international levels in priority fields.
In the past and present, whenever the country is in a crisis, Vietnamese businessmen have shown their patriotism through specific action, an in this case their role of leading the economy back to the growing trend.
From the economic perspective, what do you think about the importance of these leading companies to the economy?
The Covid-19 pandemic has persisted for nearly two years and caused tremendous hardship for enterprises. A latest survey from the Vietnam Chamber of Commerce on over 10,000 enterprises revealed up to 87.2% of the total are affected by the pandemic.
Layoffs are seen mostly in private enterprises of micro and small size with respective rates of 36% and 35%. The burden to help the economy recover will mainly fall on the shoulder of large-scale corporations, mainly because they still have the resources to deal with current difficulties.
The fact that Vingroup owned by billionaire Pham Nhat Vuong donated four million Covid-19 vaccines to the Ministry of Health; Viettel provided VND450 billion (US$19.5 million) into the Vietnam Fund for Vaccination Prevention of Coronavirus Disease 2019 (VFVC); Electricity Vietnam, Vietnam Oil and Gas Group, and Vietnam Posts and Telecommunications Group each supported VND400 billion (US$17.4 million); demonstrating their strong financial capabilities.
Large scale corporations have strong links with global value chains, and therefore, would recover much faster than their smaller peers when the global economy returns to the growth path, not to mention their much stronger resilience against external shocks.
Should the government focus its support on large-scale enterprises?
Yes, I think so. In 2020, the government focused on freezing and delaying payment of taxes, land rental fees. This year, the business community is expecting more substantial supporting policies to recover and grow in the post-pandemic period.
Large enterprises, making up 80% of state budget revenue sources, are in needed of market opening, policies for production expansion, and easing border control for foreign experts to return.
During the Covid-19 period, Vingroup has set up pharmaceutical company Vinbiocare with registered capital of VND200 billion (US$8.7 million). The firm is actively working with foreign partners to transfer vaccine production technology to Vietnam. Recently, Vingroup has sealed a deal with Singapore-based Breathonix to acquire 30 Covid-19 breath testing systems, the first of its kind in the world, worth VND460 billion (US$20 million).
The system, which has received provisional authorization from Singapore’s Health Sciences Authority (HSA), could produce results with up to 90% of accuracy and in a non-invasive manner. Vingroup is expected to hand over the system to the Ministry of Health upon arrival in Vietnam
I think with a more open vaccine policy, major enterprises could find their own way to save themselves and also contribute to protecting public health.
What measures should the government focus on at the moment?
Enterprises, regardless of their sizes, are facing common issues of market access, working capital, workforce, and supply chains, which the government should take into consideration when drafting rescue packages.
There should also be different scenarios for these packages to be disbursed as quickly as possible once the pandemic is contained. Experiences from the US and other countries show they have set up various pandemic scenarios for each state, city and planned to take actions accordingly.
In this regard, priorities should be given to enterprises that have fulfilled their tax obligation, while the government should provide them with financial support for Covid-19 prevention measures.
Meanwhile, enterprises that have gone bankrupt or suspended operations should be included in social protection packages.
How could the government turn this crisis into an opportunity for stronger growth?
In addition to short-term support, the government should focus on administrative reform by saving costs and expenses for enterprises, especially in investment, trade procedures, and measures to help them gain greater market access.
On the other hand, while there has been a shift in foreign investment capital into Vietnam, measures are needed to strengthen the linkage between local and foreign enterprises, while the domestic market should be the focus of local firms.
Another key issue is the urgency for major economic corporations to embark on the digital transformation process, as this is the key step to help them reduce operational costs during the pandemic.
Thank you for your time!
Vietnam Airlines recently converted one of its Boeing 787-9 aircraft to transport 40 tonnes of lychee from Hanoi to Ho Chi Minh City.
Before the pandemic its Dreamliners had a busy schedule, flying to Europe, Australia and the ultra busy Hanoi-HCMC sector, and few thought lychees will replace passengers on the modern airplane with a capacity up to 270.
The carrier has also deployed other planes to transport lychee.
Budget airline Vietjet has also been offering freight services to compete with leading logistic providers as demand balloons by the day. It has set up an online freight service , Swift247, in which it owns a 67 percent stake.
In the first three months of 2021, Vietjet transported over 18,000 tonnes of cargo, with its cargo subsidiary contributing nearly 50 percent of total revenues.
Since May, Bamboo Airways has been offer charter flights.
To compete in the summer, the high season for air travel, carriers have offered big discounts on fares and promotions like free check-in baggage to attract customers back.
Bamboo Airways reduced fares by 35 percent when booking five seats or more.
Vietjet offered free insurance to all domestic passengers, including VND1 million compensation per day for loss of income in case of forced quarantine or Covid-19 infection as a result of traveling with it.
Newcomer Vietravel Airlines, which has a fleet of three airplanes, is pricing tickets at below breakeven level, according to Nguyen Quoc Ky, its chairman.
Vietnam Airlines and Vietjet have joined the effort to trial a vaccine passport.
Next month, Vietnam Airlines will implement the International Air Transport Association’s Travel Pass initiative that allows people to store verified Covid-19 test and vaccination certificates on a smartphone app.
This is seen as one of the keys to convincing countries to reopen borders to international travelers.
According to Planespotters, an online database on commercial aviation based in Berlin, Germany, over half of all aircraft in Vietnam are idling in near-empty airports.
Vietnam Airlines is currently operating only 47 of its over 100 planes, including 15 of its 29 wide-body airplanes (A350 and B787).
In the case of Vietjet Air, over 50 out of its 74 airplanes are not flying.
In the first quarter, Vietnam Airlines suffered losses of nearly VND5 trillion ($218,4 million). To generate sufficient cash flows, it is now selling 11 of its A321 CEO planes.
Bamboo Airways has the least number of idle aircraft, nine out of 27.
|By Ta Hong Thai – Partner, head of Corporate Tax KPMG Vietnam|
The prime minister’s view is not just his desire as the leader of the government but is also an expectation of enterprises when almost all of us feel disappointment after a statement was made elsewhere that Vietnamese enterprises “are not competent enough to produce screws”.
The Ministry of Science and Technology (MoST) has proposed several initiatives aiming to improve the legal system in terms of mechanisms and policies for promoting science and technology activities and innovation, including investment regulations, public investment, state budget, and tax regulations.
Specifically, it requested to make the Science and Technology Development Fund an obstacle-free source of capital towards investment in innovation in technology. It is requested that the Ministry of Finance (MoF) promptly amend the joint Circular No.12/2016/TTLT-BKH&CNBTC guiding on the spending content and management of the fund.
Many enterprises have not been aware of the fund nor understand its benefits. In a way, the attempt to reach the businesses and bring these regulations into force have not been very effective.
The Law on Science and Technology was passed in Vietnam in 2000. It is a set of codes that specify the state’s policies to ensure that science and technology development constitutes a primary national policy.
The state encourages the establishment of such a fund on a national, local, and organisational scale. At the same time, the state commits to provide tax incentives in accordance with the regulations to enterprises that engage in the innovation and improvement of technologies. Therefore, businesses can benefit from tax incentives when participating in the activities of technology innovation and enhancement through the science and technology development fund.
The spirit of the laws is clear, but what about the tax regulations? According to the Law on Corporate Income Tax (CIT), enterprises can provide up to 10 per cent of their annual income before tax to establish the science and technology fund.
With this provision, the CIT law provided further details to implement the Law on Science and Technology and allowed enterprises to spare their taxable incomes for establishing the fund, meaning the enterprises do not have to pay tax supposed to be levied on the amount spared for this fund. At prima facie, this regulation seems to give great benefit to enterprises when they do not have to pay CIT and enjoy the tax saving amount, but this is not actually the case.
The CIT law also stipulates that enterprises are not allowed to claim expenditures spent from their science and technology funds as deductible operating expenses when determining taxable incomes during the period that the expenses incurred.
The reality is that when the enterprise incurs technology research and development (R&D) expenses, and if the expenses are spent from the fund, these expenses are not considered as deductible when calculating CIT liability. The government’s encouragement seems to be a temporary deferral of tax when contributing to the fund, the enterprise will pay back tax to the government later by not claiming deductible expenses when they actually incur science and technology development expenses.
It seems illogical if an enterprise is enjoying incentives like tax exemptions and reductions as result from investment in industrial parks, economic zones, or funding in difficult areas or encouraged industries.
In addition, the CIT law also stipulates that within five years from the starting date of the fund, if an enterprise does not utilise it, utilise less than 70 per cent, or utilise it for inappropriate purposes, it will be subjected to the collection of CIT, which is calculated based on the actual amount contributed to the fund plus interests on such collected amount. Obviously, the time period for enterprises to enjoy the benefit of tax deferral as a cash advance for this fund is not much.
The MoF has issued very strict regulations on the use of the fund under joint Circular 12 regarding the organising, managing, registering, reporting, and other necessary internal procedures for project approval, expenses approval, and fund transferring to other affiliated enterprises. This could reasonably be a mandatory requirement applicable to state-owned enterprises while for the remaining private enterprises, it should not be acceptable as there are many complications hindering flexibility in using internal resources with the benefit are not clear and not significant, as mentioned above.
It is prominent that the incentive policies through the mechanism of setting up and using the fund is not appropriate or practical. Therefore, for many years, these policies have not been widely applied by enterprises.
Not only Vietnam, other countries also have strong focus on science and technology development and providing incentives for the R&D activities of enterprises.
Many governments encourage enterprises to invest in the R&D activities with a range of support, especially tax policies like tax credit mechanism, double expense deduction, or super tax deduction.
For the tax credit mechanism, if an enterprise incurs R&D expenses, this enterprise has the right to use a percentage of the expenses to directly offset against their payable tax amount when declaring annual tax.
In Taiwan, for example, businesses can deduct from 10-15 per cent of their total R&D expenses against their annual income tax payable amount, although the government restricts the deduction to be no more than 30 per cent of the tax payable in the year. However, this is the actual amount of funds that businesses can be subsidised by the state. Japan, South Korea, New Zealand, Australia, and many other markets also apply the same policy.
Malaysia allows a deduction up to 200 per cent, which means that for one dollar expense incurred, two dollars of taxable income will be deducted. The state then subsidises the tax amount associated with the additional deductible expenses. Singapore even gives a deduction for up to 250 per cent, and China 175 per cent.
Tax incentives are an effective instrument when one government implements policies to encourage science and technology development. In fact, the current tax laws have provided tax incentives for high-tech businesses, businesses applying high-tech, software manufacturing businesses, and supporting product manufacturing businesses, etc.
However, R&D costs are incurred at many different stages of different businesses at different scales, and more importantly, these costs are significantly important when reviewing the objective of the laws on science and technology which is to improve the national scientific and technological capability.
In Vietnam, the limited state budget makes it challenging to provide effective support as in other countries. Nonetheless, given the reality of practice that enterprises are not interested in the policies despite availability for many years, it is essential to review these policies and consider amendments.