Vietnam steps up fight against forex hoarding, taxman eyes evasion by Metro, Coca Cola

Minh Tam

12:58 03/10/2015

BizLIVE - The State Bank of Vietnam has issued a regulation to increase the battle against forex hoarding. The taxman looks into transfer pricing allegations against Metro, Coca Cola.

Vietnam steps up fight against forex hoarding, taxman eyes evasion by Metro, Coca Cola
Vietnam central bank steps up battle against forex hoarding
The Vietnamese central bank has beefed up the fight against foreign currency hoarding by issuing Circular 15/2015 requiring banks to sell hard currencies to clients at terms and quantities pursuant to invoices presented by clients.
Banks are allowed to sell foreign currencies via spot deals to clients who need to pay bills within two days while forex transactions must be conducted via futures deals with clients that do not need to pay bills within two days.
The SBV on September 28 cut the maximum USD deposit rate banks can offer to institutional clients to 0% per annum (p.a) from the previous 0.25% p.a, and the cap on USD deposit rate for individuals to 0.25% p.a. from 0.75%.
The USD deposit rate cut aims to curb foreign currency hoarding by institutions and individuals and limit the dollarization in the economy, said Nguyen Thi Hong, deputy central bank governor.
Vietnam posts fiscal deficit of 140.97 trillion VND in Jan-Sept
Vietnam ran a state budget deficit of 140.97 trillion VND (6.27 billion USD) in the first nine months of this year, fulfilling 62.4% of the year’s estimate, the Ministry of Finance said. Regular expenditures totaled 823.97 trillion VND, including 114.79 trillion VND for repaying debts and aids in the period, up 12.5% year-on-year.
Vietnam finance ministry raises 127.47 trillion VND from bond sales YTD
Vietnam’s Ministry of Finance issued a total of 127.47 trillion VND (5.66 billion) worth of government bonds in nine months through September 30, meeting 51% of this year’s issuance plan and representing a 39% fall from the same period last year. The amount includes $1 billion worth of USD-denominated bonds the ministry sold to Vietcombank in April and excludes 51.13 trillion VND in Treasury bills due this year.
Foreign demand seen as dominant force for Vietnam ETF market
Foreign demand has become a dominant force for Vietnam’s domestic ETF market, besides other factors such as authorities’ steps to improve market capitalization and liquidity for the country to reach emerging market status, the imminent launch of derivatives products and upcoming regulations to better govern the market, said Luong Thi My Hanh, deputy chief executive officer of VietFund Management, which runs VFMVN30 ETF, the first domestic ETF.
“After one year operating, the demand for the VFMVN30 ETF from international investors has been larger than the demand from domestic investors since the beginning of August 2015”, she pointed out to Asia Asset Management.
Vietnam taxman probes transfer pricing allegations against Metro, Coca Cola
The General Department of Taxation is looking into transfer pricing allegations against transnational companies Metro and Coca Cola which have been continuously reporting losses after years entering Vietnam, according to Nguyen Dai Tri, deputy head of the department.


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