1. After two times of increasing, power getting 20.28 percent more expensive
2011 was the first year, when the electricity price increased two times within a year, by 20.28 percent in total. In the first time, the electricity price increased by 15.28 percent on March 1, the sharpest increase since 2006. The price increase once caused shocked to Vietnamese people, who got familiar to the 5-9 percent price increases within a year.
However, they could not imagine that the price would increase once more in the year. On December 19, the Electricity of Vietnam unexpectedly raised the power price by 5 percent, commencing from December 20, 2011, after the government allowed EVN to raise the electricity price by no more than 5 percent each time.
Any power price increases raise debate among the public, because people, of course, do not have to spend more money for power bills, especially in the context of high inflation. A question has been raised that how high the electricity price would be in 2012. Will the price increase by 20 percent after four 5-time price adjustment?
2. MOIT tightens car imports
The Circular No 20 stipulates that since June 26, car import companies must show a lot of types of documents, which importers say they would never get them.
100 car importers signed in a petition to the Ministry of Industry and Trade and the government, complaining that the strict requirements would push them against the wall, and that obtaining the required documents proves to be an “impossible mission”.
However, the petition could not help the car importers. MOIT explained that the new regulation is a necessary policy to put the car market in order. Meanwhile, the ministry’s decision has been described by experts as a wise move to help reduce the trade gap. Private car importers have shifted to other types of business.
3. Petroleum prices keep rising when Vietnam is fighting against inflation
On February 24, the petroleum price unexpected increased to 2100-3550 dong per liter. While people were still being shocked by the news, the petroleum price once more increased by 2000-2800 dong per liter one month later.
As such, diesel, the most important input fuel of production factories, increased by 43.05 percent in price, and petrol, the essential goods for people, saw the price increasing by 29.88 percent.
The sharp increase in the petroleum prices helped make the consumer price index increase hit the peak of 3.32 percent. Meanwhile, the price increases made people think that government agencies fail in their efforts to stabilize the market
4. Vietnamese manufacturers faced tax arrear collection
In mid 2011, customs agencies unexpectedly requested some big automobile manufacturers to pay tax arrears. Honda Vietnam was asked to pay 3340 billion dong, Ford Vietnam 32 billion dong, and Toyota 2.7 billion dong.
At that time, Honda threatened to leave Vietnam.
A lot of petitions were sent to the relevant ministries, saying that the Circular which was issued in 2005, had become out of date and need adjustments. Especially, Japanese embassy also got involved in the case.
Representatives of powerful ministries had to gather to discuss the cases, which then made the final decision that the manufacturers will not have to pay the tax arrears.
Pham Huyen
Business & Investment Opportunities
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