How to tax earnings from securities investments?

13:01' 12/06/2007 (GMT+7)

VietNamNet Bridge – Deputy Minister of Finance Truong Chi Trung talks about how to implement the plan on taxing the earnings from securities investments. What people are discussing now is not only whether to tax the earnings from securities investments, but how to tax as well. As planned, the National Assembly’s Standing Committee will spend two months two collecting suggestions from people on the personal income tax bill (June 15 – August 15). The tax collection is being carried out in the withholding method. Will there be any difficulties if securities companies are all overloaded as currently seen? Deputy Minister of Finance Truong Chi Trung Currently, we are collecting tax in the withholding method as stipulated in the Ordinance on High Income Earner Taxation. Once the personal income tax is imposed on earnings from securities investment, the subjects of the taxation will be larger. The personal income tax bill suggests the tax rate on capital assignment at 25%. We plan to collect taxes this way: when investors transfer their shares, securities companies will withhold 0.1% of the total value of the assigned shares. At the year end, the earners have to come to taxation agencies to declare the total income and the total tax they have to pay. If the tax sums they have to pay are higher than the sums they pay money sums. Meanwhile, if the tax sums they have to pay are lower than the temporarily paid sums, they will get the tax refund. Regarding the technical issues, I believe that with the current technologies, it would not be so difficult for securities companies to withhold taxes from investors. The transactions on the OTC market prove to be very complicated. How would you carry out the tax collection to ensure fairness and efficiency? You may know that public companies will have to make registrations, and in some more time, the companies that want to have their shares traded will have to deposit securities, while investors on OTC market will also have to open accounts at securities companies. By that time, securities transactions will be put under control, which will meet the requirements for the tax collection by withholding method. If the government taxes the earnings from securities investment, there will be more tax payers. How can the General Department of Taxation get adapted in terms of staff to the tax collection? We have foreseen the issue and we will have detailed solutions to the problem. People still argue about the taxation on the earnings from securities investment. Some experts said that the earnings from securities investment would be taxed twice, by the corporate income tax and personal income tax. What would you say about this? If one makes investments in a legal entity, and the legal entity makes profit, the state will tax on this profit. When the investor gets profit from the legal entity, that means he has personal income, and the income must be taxed. The corporate income tax and personal income tax are quire different, and this must not be considered as the overlapping in taxation. (Source: VNN)

Da Nang to revoke licenses of 3 pending tourism projects

12:56' 12/06/2007 (GMT+7)

VietNamNet Bridge – The Da Nang Tourism Department has asked the city’s People’s Committee to revoke the licenses granted to three tourism projects totaling $50.5mil as the projects investors have not made any moves towards the implementation. Red Star hotel project will have the license revoked According to the department, Da Nang authorities have licensed 43 projects in tourism, which have the total registered capital of $1.893bil. However, many investors have taken no action to run the projects, leaving the allocated land idle for several years. Therefore, the Da Nang Tourism Department on June 8 officially asked the city’s authorities to revoke investment licenses from three projects, namely the Red Star Hotel project ($25mil); the Red Star Resort, invested by the Hanoi-based Sao Do Joint Stock Company; and Khang Hung Hotel (VND200bil or $12.5mil) by Khang Hung Joint Stock Company. The Da Nang Tourism Department has also proposed the city’s authorities to give suitable investment incentives to several big investors, who have financial capability to fulfill the projects soon, and can provide diversified services. This will help put several investment projects into operation in 2008 ad 2009. Da Nang City is considering setting up big shopping centres and souvenir shops in advantageous positions. It is also considering spending more money on advertisement and promoting tourism to Da Nang. Japan, Singapore, Thailand, France and the rest of Europe are the key markets for Da Nang’s tourism. In the first six months of 2007, Da Nang received 577,433 travellers, 20% of which were foreigners, an increase of 35% over the same period of the last year. Da Nang received 38 international cruise ships in the last six months with 17,000 travellers, or double the figure of the same period last year. The clearance of the Huu Nghi 2 bridge across the Mekong river has helped attract more tourists by land. The number of travellers from Thailand, Laos and Malaysia to Da Nang through the international border gates of Lao Bao and Cau Treo has reached 11,000, double the same period last year. Da Nang is now preparing for the big events of the year, including the ‘Da Nang – Sea calling 2007’ and ‘Meeting in Ba Na 2007’ Hai Chau

Rex Hotel: Vietnam’s home to foreign tourists recalls memories

11:26' 12/06/2007 (GMT+7)

A view of Rex Hotel from the center of the city (photo: SGGP) VietNamNet Bridge - During the 1970s, the Rex shopping center used to be the place for many U.S. military officers and war reporters to come for entertainment. Thirty years on from Viet Nam’s unification and Rex has become a four-star hotel and restaurant, a top destination for foreign war veterans returning to Viet Nam in order to recall old memories. Located in the heart of the city, the Rex Hotel stands next door to the People Committee House, a witness to the city’s historic difficulties and for this very reason, the hotel has acquired historical value. The Rooftop Garden Restaurant & Bar on the terrace is where war reporters used to gather before 1975 and Newsweek recently chose it as one of the best bars in Southeast Asia. It’s historical value makes the Rex a top destination in many international magazines and guide books, in which tourists are recommended to pay a visit to the hotel to witness a remainder of the old Sai Gon and the enjoy the warm and cozy atmosphere. The hotel has four restaurants, including the Cung Dinh (Imperial Palace) Rex Restaurant that serves traditional Vietnamese food. Here many foreign visitors and overseas Vietnamese come to enjoy delicious food and witness attractive traditional dancing. The restaurant also organizes cooking courses for diners who are interested in learning more about Vietnamese cuisine. The Rooftop Garden Restaurant & Bar was recently home to a party for over 100 veterans and war reporters from across the world, Tim Page, an ex-war reporter, simply stated that, “Four decades elapsed and Rex Hotel now is not just a place for eating and drinking.” It comes as no surprise to find that many diplomatic corps have once set foot in the hotel. Included in the list of celebrity hotel patrons are the King of Norway Herald V, the Queen of England, the President of Tanzania and the Chief Executive of the World Trade Organization Pascal Lamy. The hotel was once the general headquarter for the 22nd SEA Games and during the APEC event in 2006, more than 40 chefs from the Hotel prepared a banquet at the Reunification Palace to serve 300 diners. At present, the yearly turnover of the restaurants account for 40% of the hotel’s annual total turnover, expected to reach US$1 million by the end of the year. At this, the restaurant may soon be eligible for a place on the list of restaurants that have the highest turnover in the world. To meet demand, the Rex is currently upgrading facilities to become a five-star hotel by 2008. A training program for the restaurant’s employees is underway, equipping them with professional skills that meet international standards of management. The famous 5-star Raffles Hotel and Resorts’ management team will be visiting Viet Nam to give the necessary training to the restaurant staff. As a sign of gratitude, this June, President Nguyen Minh Triet bestowed the title Hero of Labor to the hotel. (Source: Viet Nam Net)

VN-Index goes down on low trade

11:22' 12/06/2007 (GMT+7)

VietNamNet Bridge - The Ho Chi Minh Securities Trading Centre today witnessed a continuous decline of the VN-Index when it slipped 16.61 points in the final trading session to close at 1040.75 points. Closing the session, the market’s total trading volume fell strongly to 5.05 million shares worth VND566 billion, down 23.1% from the earlier session. The falling trading volume was mainly due to STB, the biggest stock on the southern bourse which was diluted this morning, prompting its price to drop to VND75,000 from VND78,500 each. Obviously, investors holding STB did not want to sell shares in the hope of a higher price. Therefore, the trading volume of STB yesterday was 777,460 shares, only one-third of the volume of last weekend. While 34 stocks actually managed to rise, 54 stocks fell in today’s session including the blue chips FPT (-VND10,000), HBC (-VND6,000), PVD (-VND6,000), NKD (-VND6,000) and ALT (-VND5,000). Other blue chips like BMC, TCT, SGH, LGC, and HAX were among the winners of the day, rising to nearly 5% of the trading limit. Similar to the Ho Chi Minh City market, the Ha Noi bourse this morning was down 5.34 points to close at 322.31. Its total trading volume was more than 1.2 million shares worth VND122 billion. Out of a total 86 stocks, 55 went down, 16 rose and 15 remained unchanged. (Source: SGGP)

Snail-paced construction of key national labs

09:01' 12/06/2007 (GMT+7)

Enzyme & protein technology lab at the Hanoi-based National University. VietNamNet Bridge – According to a government scheme, 17 key national labs were to be put into operation at the end of 2005, but as of this moment only two are fully operational. Huge investment In 2000 the Prime Minister approved the scheme to build key national laboratories based on the existing labs. Under this scheme, Vietnam was to have 17 laboratories by the end of 2005 but in fact, only ten labs are operating. 17 key national laboratories focus on seven fields of science and technology, including biotechnology (five labs), information technology (3), material technology and engineering (4), petrochemistry and energy (2), and other fields (3). According to La Van Chinh from the Ministry of Planning and Investment, of the ten labs that were checked and taken over, only two were completed in 2004, including the Genetic Technology Lab of the Biotechnology Institute and the Polymer & Composite Lab of the Hanoi University of Technology. “Only those two labs perform the functions of key national labs. The remaining labs are still operating like normal labs that are not different from they way they were in the past,” Mr Chinh commented. Even the two above labs haven’t produced any practical inventions or scientific and technological advances yet. The total investment for the 17 key national laboratories is more than VND1 trillion (US$62.5 million), averaging VND66 billion ($4.125 million) for each lab. The highest level of investment is VND170 billion ($10.625 million) in the ship model testing lab of the Vietnam Shipbuilding Industry Corporation. Such huge investment is mainly for purchasing equipment. According to Mr Chinh, equipment in Vietnam’s key national labs can compare to or even be more modern than that in labs in the region and the world. Foreign equipment, local thinking According to the Ministry of Science and Technology, the Polymer & Composite material lab is operating the most effectively of the ten existing key national labs. However, accounting tasks related to this project are not completed yet. Going to the Vietnam Science and Technology Institute which houses up to four key national labs, reporters can meet only the manager of the Genetic Technology Lab. The characteristic of key national labs is they have modern and high-value equipment so state investment is huge. As a result, these projects require a rapid pace of construction, specifically four years. However, most of these projects have exceeded their deadlines. As they have to wait for imported equipment, equipment that was imported early must operate perfunctorily to wait for other equipment. Consequently, it quickly breaks down, Mr Chinh said. Another problem is that equipment is modern and up to international standards while experts who operate this equipment are mainly from old labs and they need further training, which also takes time. As a result, the deadline has been changed to the end of 2008. At that snail-pace, thousands of billion dong of investment are being wasted. (Source: Viet Nam Net)

Re-inventing TV documentaries

08:41' 12/06/2007 (GMT+7)

An image of the Mekong, an inspiration for new-style documentaries VietNamNet Bridge - After Mekong Chronicles and Train Chronicles, TV stations in Vietnam are exploring a new way of making documentaries that requires a great deal of money, global trekking, and attention to viewers’ tastes. Old-style documentaries For a long time, TV documentaries have been considered dry, boring and formulaic. According to a director in charge of censoring documentaries at VTV, of the 20 films broadcast monthly, only 20% receive favourable public feedback. Viewers give neither good nor bad comments on 30% of them and the remaining 50% are either not watched or judged in an unfavourable light. During a recent conference on documentaries, a director cited many examples of films using the same formulas over and over again. For instance, documentaries about poor people overcoming poverty often include scenes of poverty, narrators talking about the main characters, and the main characters recalling how they have fought against poverty. President of HCM City TV Huynh Van Nam said, “Now that game shows are losing their popularity, interactive programmes and reality shows are being welcomed. As for documentaries, viewers are getting sick of old-style trite ones.” Ambitious projects In order to attract viewers, TV stations are abandoning old ways of making documentaries and embarking on a journey to create new ones. “To lure young audiences, documentaries must focus on interaction with audience members. Verbose narration should be minimised since images will speak for themselves. HTV is investing in this new way of making documentaries,” said Huynh Van Nam. And new-style documentaries aren’t cheap. In the upcoming months, HTV will spend hundreds of thousands of dollars on each of its new projects: Amazon Chronicles, Discovering Vanuatu and the Ganges Chronicles. Vietnam TV (VTV) won’t lag behind. It will invest nearly a million dollars on a 20-episode documentary called Lan Thuong-Mekong, which will be produced by a 120-member film team including directors, reporters, cameramen, and technicians from 6 countries. The film will be available in 7 languages and broadcast all over the world. It was HTV’s most expensive project ever, Mekong Chronicles, that first proved the success of new-style documentaries. It set a record in DVD sales for documentaries with 62,000 DVDs of the film sold, while for years, Vietnamese TV documentary makers only hoped for several thousand DVDs at most. Train Chronicles, which is being broadcast by HTV and other stations, is another success. Thousands of its DVDs have been sold. According to Quang Trung, Head of the Documentary Department at HCM City Television Film Station (TFS), the success of Mekong Chronicles and Train Chronicles is due to the fact that their topics are seen through the eyes of Vietnamese people and there are interactions and exchanges with viewers. Most new-style documentaries enable audience members to follow daily journeys of filmmakers as well as talk with them through emails. New information is also constantly updated on stations’ websites. Stations are also orchestrating large-scale marketing campaigns, broadcasting their films during busy hours when many viewers tune in to watch their programmes, as well as are actively calling for outside investment. (Source: Tuoi Tre)

International travel firms have to pay VND250mil in security

17:03' 11/06/2007 (GMT+7)

VietNamNet Bridge – The Prime Minister has agreed to allow international travel firms to pay a security of VND250mil ($15,625) instead of VND500mil ($31,250) as suggested by the Vietnam National Administration of Tourism (VNAT). This sum of money will be used to compensate clients in case the travel firms break the contracts, and deal with risks. Prior to that, VNAT proposed the security level of VND500mil, which faced strong opposition from travel firms. The firms complained that a big sum of money would be left idle, while they would still have to borrow money at banks at the interest rate of 1.1% on average. Travel firms which are also booking agents for airlines now have to pay VND250mil in security for providing international travel services (inbound and outbound tourism), and $30,000 as a security for booking agents which puts big difficulties on them. Decree 92 signed by the Prime Minister stipulates that persons who operate domestic travel businesses must have the working time in travel business of three years at least. Meanwhile, the operators of international travel businesses must have the minimum time working in this field of four years. International travel firms must pay a security of VND250mil. These firms can only hire tour guides who have the international tour guide card to provide services to foreign travelers. Under the decree, foreign travel firms which want to open branches and representative offices in Vietnam must operate as travel firms for five years before setting up branches or offices in Vietnam. Once the branch is set up, the head of the branch must not hold the post of the head of the representative office of the same company in Vietnam at the same time, or head the representative office of another foreign company in Vietnam. The new decree also stipulates requirements for granting international or domestic tour guide cards. Tour guides must not suffer from infectious diseases and must not use addictive substances. Tour guides who have been granted cards before the day this decree comes into effect will be able to guide tours for two more years before they must meet the requirements stipulated by the decree. There are 473 operational travel firms in Vietnam. Viet Nam Net

Japanese investors thirsty for information about Vietnam’s securities

20:32' 11/06/2007 (GMT+7)

VietNamNet Bridge – More and more Japanese investors want to make investment in Vietnam’s securities, but they do not know how to get enough information. Ito Junichi, the manager of viet-kabu.com website belonging to Viet. Jo, talked about Japanese investment in Vietnam’s stock market. What can you say about the demand for making investment in Vietnam of Japanese investors? Ito Junichi, the manager of viet-kabu.com website The demand is very big, and more and more Japanese investors are seeking information about Vietnam’s stock market on websites, especially ones in Japanese. Our website, www.viet-kabu.com, for example, has 50,000 visitors every day, most of whom are Japanese investors thirsty for information about Vietnam’s securities. We have introduced 1,300 Japanese investors to open transaction accounts at Bao Viet Securities Company. How important is Vietnam’s stock market in the eyes of Japanese investors? Vietnam’s stock market is the second choice, after China, in the eyes of Japanese investors. Now only individual investors inject money in Vietnam, but I believe that more big investors will make investment in Vietnam. In fact, many Japanese investors want to make investments in Vietnam, but they find it more difficult to get information about Vietnam’s securities than about other markets. Besides, Japanese investors can easily trade Chinese shares through the Chinese companies located in Japan, while they cannot do that with Vietnam’s securities. How does Viet. Jo deal with the information related to Vietnam’s stock market? We simply collect information in Vietnamese language, translate it into Japanese and then provide it for Japanese investors. We plan to cooperate more closely with securities companies to better serve Japanese clients. We have signed a cooperation contract with Hoang Gia Securities Company. In the eyes of Japanese investors, Vietnam’s stock market is still far from being saturated; therefore, they want to get more information to consider investment opportunities. I think that the information provided to investors, both domestic and foreign, proves to be not satisfactory enough, and Vietnam needs to perfect its information provision scheme. Japanese investors are most interested in shares of the companies operating in the fields of infrastructure, finance and construction. (Source: VNN)

Quang Nam: alarm bell over ‘virtual’ investment rung

16:22' 11/06/2007 (GMT+7)

VietNamNet Bridge – Experts have warned about the existence of ‘bogus’ investment projects, in which investors register investment just to get land plots. The Chu Lai Economic Zone (EZ) and the Dien Ban coastal tourism area in Hoi An ancient town, the two key economic zones in the central region, are considered as fully occupied with investment projects. However, in fact, many of the registered investment projects are just ‘bogus’ projects as they just exist on paper. “Achievements” of Chu Lai In July 2005, Chu Lai EZ announced on the occasion of the 2nd anniversary of its establishment that 116 projects totaling nearly $1.4bil were registered, of which, 66 were licenced. The projects were expected to cover an area of 1,982 ha. At that time, investors were promoting seven other big projects with the total capital of $1.3bil. Investors of four projects have been appropriating land to exploit titanium in Chu Lai; the expired licences have not been revoked The projects were mainly in the fields of industry, tourism, services, including 33 foreign invested projects, and 83 domestically owned ones. On the occasion of the 2nd anniversary of Chu Lai EZ establishment, provincial leaders stated that the starting period was over, and Chu Lai entered the new period of speeding up. The figures about investment in Quang Nam changed rapidly, and in December, the number of registered projects rose to 128, capitalised at $1.5bil, including the 72 licenced projects. By the end of the last year, 84 projects had been licenced. However, the picture of the Quang Nam investment turned out to be not as bright as previously thought. In May 2007, the new management board of the Chu Lai EZ checked the investment projects in Chu Lai and found out that only 51 investment projects were registered, totaling $618mil, and only 43 of them were licenced. There are only 23 operational projects, including the ones which began operating before the Chu Lai EZ was established. In fact, the other 77 projects were discovered as being ‘bogus’ projects. A series of projects have not been implemented, while the management board cannot make contact with registered projects’ investors, as it can not find any addresses or telephone numbers. Tourism complex with idle land Coastal areas from Da Nang to Hoi An ancient town in Dien Ban district and Hoi An town have been projected to become the key tourism area. Beginning calling for investment in 2001, the ‘golden area’ was said to be fully occupied just two years later with 30 registered tourism investment projects. In fact, only five projects have become operational to date: Victoria tourism complex, Agribank, Golden Sand, Palm Garden and The Nam Hai. The 208 ha land area which has been allocated to investors remains idle. Other projects have not been kicked off yet. Investors just set up a fence around the allocated land plot, leaving the land idle. Experts said that many of the registered projects were just ‘bogus’ projects, and investors registered investment just to get land from the State. The investors may use the land to make capital contributions to other projects, or do other things to seek self-interests. Statistics showed that 47 programmes using 2,192 ha of land remains ‘pending’, while land has been allocated to 51 investment projects, but the projects have not been implemented yet. 18 other projects are in the site-clearance period, but the project implementation period proves to be very slow. (Source: Lao dong)