No.: 16520/BTC-CST
Re.: Handling recommendations at Annual VBF 2015 / SOCIALIST REPUBLIC OF VIETNAM
Independence – Freedom – Happiness
Hanoi, 18 November 2016
To: Ministry of Planning and Investment
MOF has received Official Letter No. 9249/ BKHDT-DTNN dated November 4, 2016 of the Ministry of Planning and Investment (MPI) on handling business community’s proposals at the Vietnam Business Forum (VBF) at the end of 2015, including recommendations for the Ministry of Finance (MOF)to update the progress of task implementation (if any). In this regard, MOFwould like to update as follows:
Based on the businesses’ proposals at the 2015 year-end Vietnam Business Forum (VBF) which were consolidated by the MPI in Official Letter No.175/BKHDT- DTNN dated January 11, 2016, MOF has instructed relevant units to handle and answer to these enterprises’ proposals in each specific field. Updating the progress of handling enterprises’ proposals are as follows:
1.Regarding proposals in Customs sector, MOF (General Department of Vietnam Customs) has dispatched Official Letter No.3310/BTC-TCHQ dated March 14, 2016 to the MPI on handling business’s proposals related to customs at the 2015 year-end Business Forum.
Also, regarding the proposal on information & data sharing through interconnection with IT systems of themanagement inspection agenciesto ease businesses’ pressures in terms ofprocedures, time and costs, since September 2016, the National Single-Window (NSW) mechanism has been officiallyapplied to 10 ministries including the Ministry of Industry and Trade, the Ministry of Science and Technology, Ministry of Transport, Ministry of Agriculture and Rural Development, Ministry of Finance (General Department of Vietnam Customs), Ministry of Natural Resources and Environment, Ministry of Information and Communications, Ministry of Culture, Sports and Tourism, the Ministry of Health, Ministry of Defence. In addition to customs clearance procedures (MOF), 36 administrative procedures of 10 ministries have been implemented through NSW.
2.Regarding proposalson tax issues, MOF (General Department Of Taxation) has issued two offical letters: (1) Official Letter No.1024/TCT-TTr dated 15/03/2016 which replied to business’s proposals on: (i) charges related to the service contract signed with the parent company and (ii) tax inspection & examination. And (2) Official Letter No. 5741/BTC-TCT dated 29/04/2016 which replied to business’s proposals on the formulation and implementation of the provisions of law in taxation.
MOF has also acknowledged businesses’s proposals and directed tax authorities to strengthen 2016 tax inspection & examinationin accordance with Law on Tax Administration.
3.Regarding business’ proposals in insurance sector, based on these proposals and recommendations of Advisory Council for Administrative Procedure Reform (Ministry of Justice), the Vietnam Chamber of Commerce and Industry (VCCI) whois currently reviewing business investment conditions under the Investment Lawthe Enterprise Law, has reported toMOFand the Government on the registration of insurance products & contract in the form of NSW. The Government has approved and issuedDecree No.73/2016/ND-CP dated 01/07/2016 which provided details of the implementation of the Law on insurance business and the Law on amending and supplementing a number of articles of Law on insurance business.
Accordingly, Clause 3, Article 40 of Decree No.73/2016/ND-CP stipulated:“MOF shall be the sole recipient of applications for endorsement and registration of insurance products. MOF shall hold discussions with the Ministry of Industry and Trade to define the insurance products whose contracts must be registered in conformity to the universal template and conditions as per the Law on protection of consumer rights. In 03 working days upon endorsing the products in writing, MOF shall deliver the written endorsement and insurance products to the Ministry of Industry and Trade for registration of contracts in conformity to the universal template and conditions as per the Law on protection of consumer rights”.
Thus, businesses’proposal onadministrative procedures related to the approval of life insurance products and contract registration form via a single window mechanism has been resolved.
MOF also actively formulatedRegulation on coordination in the approval of products, contract registration based on templates and sent to the Ministry of Industry and Trade. MOF, Ministry of Industry and Trade also discussed and agreed with Vietnam Insurance Association, insurance businesses on standard rules in order to ensure transparency & protect interests of the insured, and create favorable conditions for enterprises in product approval and contracts registration. However, the implementation of administrative procedures is related to functions and responsibilities of the two ministries. Thus, to better implement and create the most favorable conditions for businesses, close coordination between MOF and Ministry of Industry and Tradeis required.
4.Regarding businesses’proposalin accounting, MOF had Document No.2932/BTC-CDKT dated March 4, 2016, which responded to Vietnam Business Forum on 02 issues: (i) updates ofVietnam Accounting Standards in accordance with international practices and (ii) accounting records
Also, for archiving of accounting documents: This has already been prescribed in the Accounting Law No. 88/2015/QH13 (effective from January 1, 2017), in the direction of allowing business to store accounting-related documents and accounting books by hard copy or on electronic devices. Accordingly, if being electronically stored, these documents must be ensuredof safety procedures and being accessible within storage period.
For updates of the Vietnam Accounting Standards in accordance with international practices: To perform this task, MOF has conducted a survey on the possibility of applying international accounting standards in a number of businesses. It has been observed that large-scale enterprises can apply international accounting standards, while others might struggle in doing so.
To apply corporateaccounting standards in accordance withVietnam Accounting Auditing Development Strategy until 2020, MOFis directing relevant units to formulate the Scheme of updating Vietnam accounting standards in accordance with international practices, including roadmaps, plans and specific measures to ensure that Vietnam accounting standards will soon be aligned with international accounting standards.
5.Regarding businesses’s proposals in the field of securities and equitization of state-owned enterprises (SOEs)
a)MOFacknowledgebusinesses’proposals on the ownership ratio of foreign investors and will consider incorporating them in the Revised Law on Securities (expected to submit to the National Assembly in 2018) which aims to be: (i) in line with WTO commitments and commitments in international trade and investment agreements to which Vietnam is a signatory; in line with international practice on the regulation of foreign ownership ratio according to business fields which the company registered for; (iii) addressremaining inconsistencies between the Law on Securities and other laws (e.g., the Law on Investment), (iv) ensure that the looseningforeign ownership limitsshould be in accordance with regulations on the establishment of foreigninvestedenterprises (of up to 100%with the consent of the specialized authorities). However, businesses still have to comply with the conditions and limitations of such specialized law on legal capital, lines of business, staffing conditions (if any), etc.
b)Regarding the proposal on equitization of SOEs
-Regarding the proposalto conductequitization in a transparent manner through public bidding, at present, legal documents on equitization (such as Decree No. 59/2011/ND-CP, Decree No. * 189/2013/ND-CP and Decree No. 116 / 2015/ND-CP and instructing Circulars) has stipulated that the IPOs must adhere to market principles publicly and transparently, including the form of a public auction, and these rules & methods will continue to be maintained to attract investors.
-Regardingproposals which required equitized enterprises to list on the stock market, in Decree No. 60/2015/ND-CP dated 26/06/2015; Circular No.115/2016/TT-BTC dated 30/06/2016 of MOF has stipulated that equitized enterprises must list on the UPCOM (or list on stock exchanges if they satisfy conditions)[1].
-Regarding the proposalfor the Government to publicly announcethe list of enterprises to be equitized,MPI formulated and submited to the Prime Minister a Draft Decision which will replace Decision No.37/2014/QD-TTg dated 18/06/2014 on the criteria for categorizing SOEs.In this new Decision, it specifies the tentative list of SOEs which would be equitized during the period 2016- 2020 and the percentage of state ownership in each enterprisein alignment with the Law on Management and Use of State Capital in Businesses.
-Regarding theproposal to sell 25% -30% stake of equitized enterprises through international professional stock brokers: According to current regulations on equitization and a draftdecree on equitization, based on the equitization plan approved by competent authorities, the steering committee will directenterprisesto implement the initial share offering and might consider to offer share purchase through professional stockbroker (domestic or international).
- Regarding theproposalto developcorporate governance standards in line with international practices: Currently, MOF is drafting a decree on application of corporate governance for public companies based on international practices. Accordingly, the equitization of SOEs after the registration or listing on the stock exchange will have to comply with regulations on corporate governance of other public companies. On that basis, the SOEs will improve operational efficiency & business performance on a level playing field through the stock market.
6.Regarding the proposalto establish a voluntary pension fund, MOFtook the lead in the formulation and submitted the Government to issue Decree No.88/2016/ND-CP dated 01/7/2016 which provides regulations on voluntary additional retirement program.
MOFwould like to update forMPI’s consolidation and reporting to the Prime Minister.
To:
-As above;
-Minister (for report purpose);
-Office of Government;
-Vietnam Business Forum (VBF);
-Other agencies: TCT, TCHQ, UBCKNN,
-For filed
[1]Decree No. 60/2015/ND-CP stipulates that the issuing company must complete procedures for corporate re-registration within a maximum period of 90 days from the end date of the public securities offering; Circular No. 115/2016 /TT-BTC stipulates that when an equitized enterprise registers the initial share offering through the Stock Exchange, it must apply for registration, depository and registration of share trading at the same time on UPCOM system.