Vietnam - Vietnam Govt mulls licensing casino project

Minister Vu Duc Dam, chief of the Vietnamese Government Office, has confirmed that the Government was considering licensing a huge resort complex including a casino in northern coastal Quang Ninh Province's Van Don District.

"The Ministry of Planning and Investment was ordered to consider (and assess the feasibility of) the project," he told a press conference on March 6.

Located on 1,800 ha in Van Yen Commune, the complex is expected to help develop the Northern Economic Zone and attract more visitors, especially foreign tourists, to the province.

The complex, to cost US$4-5 billion, is among 18 projects Quang Ninh authorities are seeking investment in.

"We receive some 6 million tourists annually," Nguyen Van Doc, chairman of the Quang Ninh People's Committee, said.

"However, they do not stay for long because Quang Ninh does not have many entertainment facilities."

Dang Huy Hau, his deputy, has been quoted as saying provincial authorities had to think twice before submitting the project to the Government.

Hau declined to give a direct answer to a question if local visitors would be admitted to the Quang Ninh casino, but quoted surveys in the local media as saying that most visitors at some casinos in Cambodia were Vietnamese.

"If Vietnamese are not allowed to visit casinos at home, they would go to casinos abroad. And so the Vietnamese government fails to get tax from its citizens.

"If we are not brave, we would find it difficult to develop the economy."

In the coming years Viet Nam needs to develop a number of international-standard tourism complexes, including casinos, the chairman of the Viet Nam Chamber of Commerce and Industry, Vu Tien Loc, said.

However, as a late-comer, Viet Nam should take "cautious" steps, to better benefit from such entertainment services but at the same time avoid the "negative effects" they may have on the society.

Economist Pham Chi Lan is worried about the effect of these casinos on society.

"As casinos are not officially permitted at home, many Vietnamese people visit casinos in Cambodia and Macau. So, would there be a gambling boom when casino are licensed here?" Lan was quoted by the BBC (Vietnamese) as saying.

Economist Bui Kien Thanh expressed similar concerns, saying Viet Nam should not develop casinos.

Only an insignificant minority of Vietnamese visited overseas casinos, while licensing casinos would affect the culture of the majority, he said.

"It is unnecessary for Viet Nam to have casinos," he said.

Phan Huu Thang, ex-chief of the Agency of Foreign Investment, told VIR that casinos should never be a "taboo" for foreign investors. However, only localities with certain socio-economic conditions should be allowed to have casinos.

Viet Nam has yet to license casinos, but the Government has granted licences to a number of entertainment-gaming complexes in southern Phu Quoc Island, the New City in central Phu Yen Province, Silver Shores and Furama in central Da Nang and Sai Gon Atlantic in southern Vung Tau. None of them admit local visitors.

Sheldon Adelson, chair of Las Vegas Sands Corporation, one of the world's leading resort developers, has expressed interest in building resort complexes worth as much as $6 billion in HCM City and Ha Noi.

Reasonable toll

The toll set for the HCM City – Trung Luong Expressway are "reasonable," the Ministry of Transport has said following transporters' demand to lower the rates on the 61.9-km expressway linking the southern hub with Tien Giang Province.

Speaking to the media on March 8, Deputy Minister of Transport Nguyen Hong Truong said the rates, which began to be collected since February 25, was properly calculated based on toll in other countries and Vietnamese incomes.

The rates, 1,000 dong to 8,000 dong (US$0.38) per kilometre depending on vehicle capacity, are designed to recoup investment in the highway, built on a BOT (Build-Operate-Transfer) basis and used toll-free for the last two years, he said.

"In China, the rate is 1 yuan (3,224 dong) per kilometre."

He added that toll would also be collected on National Highway No 1A (running parallel the expressway) to regulate traffic on the two roads to protect either from overuse and quick damage.

The minister's statement follows a petition from the HCM City Association of Goods Transport to halve the rates "to limit the impacts on prices."

At VND8,000 per kilometre, a truck has to pay 640,000 dong for a return trip. "It will … finally be shouldered by customers," the letter said.

Calling the rates unreasonable, it said: "Drivers will certainly choose National Highway No 1A to escape the toll."

It also asked the Government not to collect toll on National Highway No 1A.

Lack of skills a problem

"Tax officials' lack of skills is among the reasons for the difficulties in fighting abuse of transfer pricing by foreign-invested enterprises (FIEs)," the head of the Foreign Investment Agency, Do Nhat Hoang, has said.

Speaking at a press briefing in Ha Noi on Thursday ahead of a seminar, he said even officials with 20 to 30 years' experience find themselves helpless.

"We do not have a database on materials to be used as a basis to accuse an enterprise of tax evasion."

Transfer pricing refers to the nominal price a company claims for goods or services it sells to and buys from its own divisions or branches.

Thus, a company can submit evidence to prove it paid $20 for an item taxation agencies deem cost only $10.

The FIA has been asked to lead the fight against such transfer pricing abuses.

Deputy Minister of Finance Do Hoang Anh Tuan said at an earlier conference that transfer pricing was posing a great challenge to the tax authorities, though recent efforts have paid off to some extent.

According to the General Department of Taxation, in 2011 tax authorities inspected 921 FIEs suspected of misusing transfer pricing, refusing to accept losses of over 6.6 trillion dong they claimed, or 3.5 times the 2010 figure. They collected tax arrears and penalties worth 1.6 trillion dong.

"We have only inspected a small number of FIEs, yet the collected tax arrears have reached trillions," Tuan said.

A survey by the Ministry of Planning and Investment of HCM City-based FIEs found that 70 per cent of them claimed losses and only a few reported profits, that too modest.

The city Department of Tax said half of all FIEs have reported losses for four consecutive years.

In southern Binh Duong Province, 754 FIEs, or 51 per cent of the total number, reported losses in 2010. The proportion in neighbouring Dong Nai was 52 per cent the same year.

Tuan said half of all foreign firms in the country reported losses, many for three consecutive years.

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