By admin

Published: February 24, 2011

Migrant workers lack housing in Da Nang

A row of lodging houses in Lien Chieu District’s Hoa Khanh Bac Ward in central Da Nang City which are rented by workers from nearby industrial parks. — VNS File Photo

DA NANG — The shortage of accommodation is the biggest worry for migrant workers in the central City of Da Nang where, on the other hand, several budget housing projects have stalled in the last few years.

Losing their job is not the biggest fear for most migrant workers in the central city, especially those working at export processing zones (EPZs) and industrial parks (IPs), Lao Dong (Labour) newspaper said.

More than 60 per cent of nearly 60,000 workers at the six EPZs and IPs here are from other provinces. However, the city does not have a single apartment block for them.

Thousands of the workers rent cheap houses or low-quality apartments.

“Since a large number of new urban areas have been built, low-cost accommodation is becoming scarce since land for [it] has shrunk,” Duong Thanh Thi, chairman of Lien Chieu District People’s Committee, which is home of Lien Chieu and Hoa Khanh IPs, said.

The demand for low-cost housing is the highest in his district since it houses the two largest IPs, accounting for 50 per cent of all workers at EPZs and IPs, in addition to thousands of students study in five local universities and vocational schools, he said.

The lack of stable accommodation has led to negative impacts on the quality of living of both workers and local residents, he said.

“But the administration is unable to resolve the problem,” he admitted.

Nguyen Thi Hong, a worker at Hoa Khanh IP, said she shared a place very far from her workplace with four others but still considered herself lucky since thousands of others were not able to find a place to stay.

Cheap housing that catered to workers and students has been demolished to make way for other housing projects, Hong said.

A public project to build three budget five-storey buildings for low-income people and workers in Lien Chieu actually began in 2003.

Expected to provide 600 apartments, it was approved at a cost of VND27 billion (US$1.35 million).

But it has dragged on for more than seven years, including two stoppages after running out of money. An additional VND3.3 billion ($165,000) was approved for its construction but only its frame has been built so far.

The main contractor, Da Nang Industrial Zones Infrastructure Development Company, has blamed the delay on lack of funds.

The work was handed last year to a new contractor, the Hung Phu Investment Joint Stock Company, which promised to complete 183 apartments last year, and accommodation for another 5,000 workers and facilities for their entertainment and services this year.

But Lao Dong reported work has not become any faster.

In an effort to address the pressing issue of the workers’ housing shortage, the city People’s Committee recently reviewed and repossessed lands allotted to public budget-apartment projects that have been delayed.

One of the main reasons for the tardy progress and lack of interest among investors is the low profitability of such projects and the long time needed to make returns on them.

Other problems include the projects’ shortage of land, meaning investors cannot undertake expansions for other use.

Meanwhile, workers and other low-income people are languishing for lack of housing, Lao Dong said. — VNS

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By admin

Published: February 24, 2011

Nation prevents abuse of transfer pricing

Thomas Borstell, global director of transfer price services at accounting giant Ernst Young, tells Viet Nam News the country is headed in the right direction.

What is the core of the transfer pricing controversy in Viet Nam? What are the solutions for preventing abuse of transfer pricing?

Thomas Borstell.

Transfer pricing has become very important compared with previous years. Many countries are now trying to adopt regulations on transfer price and make companies obey the regulations.

To conclude that a multinational company [abused] transfer pricing to avoid tax, we should study the specific situation. Viet Nam’s tax authorities should take gradual steps to cope with transfer pricing issues.

What are the common solutions adopted in other countries which can be applied in Viet Nam?

Transfer is an important issue for multinational companies. Viet Nam has the same regulations related to this issue that tax authorities around the world do. I think Viet Nam is among the first countries to issue regulations related to transfer price.

The first step is very clear. It wants us to have rules. Viet Nam has experience in preventing abuse of transfer pricing. From what I know, Vietnamese regulations are very much the same with the Organisation for Economic Co-operation and Development’s (OECD) guidelines.

The next step is to provide training so that tax authorities can gain experience and knowledge to deal with new transfer pricing developments.

What is Ernst Young’s goal in Viet Nam? Helping multinational companies comply with regulations and assisting tax authorities with transfer pricing issues?

We as an accounting firm help tax payers comply with Vietnamese rules. It is very clear we help the tax payers in several ways such as creating documents for transfer pricing which are necessary or required under the law.

Currently, many foreign companies are investing in Viet Nam. In future, there will be several Vietnamese companies investing in foreign countries. In that case, we can help enterprises comply with transfer pricing regulations.

We have good relations with tax authorities in many countries. We train them in transfer pricing. Last year, we began a training course for Chinese tax authorities on the car industry.

Recently, the European Commission has started transfer pricing training in four countries and one of them is Viet Nam. The more knowledgeable the officials are, the easier for tax payers to comply with regulations and for tax authorities to tackle with transfer price issues.

Do you think that if Viet Nam makes transfer pricing rules tougher its investment environment will become less attractive to foreign investors?

The transfer pricing rules that Viet Nam has are allied with globally accepted guidelines issued by the OECD. Multinational companies are used to the guidelines and Viet Nam itself has a very attractive tax regime that strict enforcement of transfer pricing rules will not make Viet Nam less attractive to foreign investors.

Are you planning to provide training to Vietnamese tax authorities in transfer pricing?

We have held training courses for tax authorities in other countries. We are ready to offer training to Vietnamese tax authorities if required. — VNS

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By admin

Published: February 24, 2011

Tax exemptions for bamboo, rattan items

HA NOI — Growers of rattan and bamboo for handicraft production would be charged lower land use taxes beginning April 5, under a recent Prime Minister Decision.

Following Decision 11/2011/QD-TTg, growers of rattan and bamboo products for daily use will be free from paying a land use tax. Those growing bamboo and rattan for other purposes will be subject to a 10 per cent resource tax.

New growers will receive 100 per cent support to buy rattan and bamboo for the first time from provincial People’s committees.

Enterprises will also benefit from the decision, as they will not be charged import tax on an approved list of specialised machines and equipment used to produce rattan and bamboo products.

Interested enterprises are also eligible for the National Foundation for Science and Technology Developments’ sponsorship equal to 50 per cent of project investment to research new technology and 30 per cent to implement the new project upon approval from authorities.

However, as most enterprises are small or medium-sized enterprises, managers said they would not benefit greatly from the new Decision.

“Our products are made mostly by hand. We do not need imported machines,” said Nguyen Ba Thuc, manager of Ba Thuc, a company that produces woven rattan and bamboo products.

Tran Thu Hien, manager of Hien Luong company was of similar mind since it would be unrealistic for her company to research ideas for product improvement.

Nevertheless, Thuc and Hien agreed that the Decision would help develop rattan and bamboo production.

Rattan and bamboo are considered to have significant commercial potential for Viet Nam. They now account for about 10.5 per cent of the country’s total forest area.

About 723 of the country’s 2,017 total craft villages are involved in producing rattan and bamboo products, making it the largest handicraft category. — VNS

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By admin

Published: February 25, 2011

Local brand names help sell cheap Chinese phones

HA NOI — Chinese-made mobile phone handsets with Vietnamese brand names have overcome consumer doubts about poor quality and gained a toehold on the lower end of the domestic market – with the past two years witnessing the appearance of affordable mobile phones with such brands as Hanel, Q-Mobile, F-mobile, WellcoM and MobiStar.

Appealing to a low-end market segment, these brands still had enormous potential to develop, said CMC Distribution marketing director Ho Quoc Hue.

CMC also put its Blue Phone mobile phone onto the market early this year with the ambition to become a leading Vietnamese mobile phone brand in the future.

“Customers are now willing to use made-in-Viet Nam mobile phones if they are offered at reasonable prices and have good quality,” Hue said.

The successful debuts of new mobile phone brands had demonstrated the increasing efforts of domestic companies to better meet domestic demand, said An Binh Telecommunication (ABTel) director Nguyen Quang Minh.

Q-Mobile, developed by ABTel last year, already accounts for about 20 per cent of all mobile phones sold on the domestic market, ranking second in terms of the domestic market share behind market leader Nokia, Minh asserted.

“We target to surpass Nokia and acquire 50 per cent of domestic market share by year’s end,” he said.

Although a sales success, many of these Vietnamese brands continue to have a bad reputation with the public, which view the handsets as having “Vietnamese covers and Chinese hearts”. Many of the phones are indeed Chinese imports bearing a Vietnamese brand.

But Minh doesn’t see this as a problem, arguing that many foreign companies with famous brand names only focused on research and development or design, while outsourcing production to other partners, Minh said. CMC admits that it does not manufacture Blue Phone models in Viet Nam but outsources production to China. However, Minh said proprietary technology and trademark development often accounted for 80 per cent of a product’s value, while production accounted for just 20 per cent.

“A completed mobile phone requires many components and we cannot produce them all by ourselves,” said Hue. “The most important is that you choose the right producers to ensure the quality of your products.”

What we were striving for was that Vietnamese-branded mobile phones would became so cheap that even the taxi motorbike driver could afford one, said a representative from another Vietnamese mobile brand.

Vietnamese mobile phones could offer major price advantages, while offering applications similar to more expensive smartphones which allowed people to play games or read newspapers online, he said. — VNS

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By admin

Published: February 25, 2011

PM approves electricity rate hike

A worker of the Mekong Delta province of Hau Giang’s Power Company shows farmers of Long My District how to use energy-saving light. — VNA/VNS Photo Ngoc Ha

HA NOI — Prime Minister Nguyen Tan Dung yesterday approved a new average electricity rate of VND1,242 (US$0.05) per kWh, an increase of VND165 ($0.007) for one kWh compared to last year.

The new electricity rate list, which will go into effect early next month, will include seven levels with prices increasing according to level of consumption.

The first and lowest level, which made up 80 per cent of the newly-approved average electricity cost, will be applied to households that consume less than 50kWh per month.

Those who wished to buy electricity at this level must register with electricity sellers and would be required to pay a higher price if they consumed more than 50kWh each month in three months.

Poor households, including those with an average income of less than VND400,000 ($19) per person per month in rural areas and less than VND500,000 ($24) per person per month in cities, will receive support for 50kWh per month, equivalent to VND30,000 ($1.4) per month.

Household electricity prices in remote and rural areas, and islands that are not connected to the national electricity network will have floor and ceiling prices of 1.5 times and 2.5 times higher than the average price. They will receive Government subsidies to make up the difference.

The PM has asked the Finance Ministry, in co-ordination with the Ministry of Industry and Trade, to complete an assessment report on the impact of the electricity price hike and submit to the Government in the first quarter of this year.

Last year, the Government decided to raise the retail power price by 6.8 percent over the 2009 rate. The price list consisted of seven levels, ranging from VND600 ($0.02) to VND1,890 ($0.09) per kWh. — VNS

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