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Why many Vietnamese state-owned groups seeing big losses?

by Inside Out

Many enterprises have reported big losses because of Covid-19, including large state-owned groups.

The government’s report to the National Assembly show a sharp decline in tax and fee collections as businesses have been hit hard by Covid-19. The decrease is also attributed to the policies on tax remissions and tax payment deadline extensions, amounting to VND18.78 trillion.

“The tax collection in the first nine months of the year was the lowest in many years,” the report said. .

The tax and fee collections were just equal to 61.6 percent of the yearly plan, a decrease of 8.1 percent decrease compared with the same period last year.

Meanwhile, in previous years, the collections of the first nine months of 2016-2019 were 69.7-72 percent of the yearly plans and the collections increased by 7-15.2 percent year after year.

Covid-19, which has seriously affected China, the US and Europe, the biggest partners of Vietnam, has also affected Vietnam trade, especially exports, leading to a decrease of VND35.279 trillion in state budget collection compared with the same period last year.

The price of crude oil fell to below $40 per barrel in the first nine months of the year, causing a considerable decrease to revenue for the state budget.

The government thinks the state budget collection in the last three months of the year will still face difficulties.

The second Covid-19 outbreak occurred in key economic centers, including Da Nang, Quang Nam, Hai Duong, Hanoi and HCM City. And Vietnam’s big trade partners have not controlled the epidemic and as a result Vietnam’s exports and investment will still bear adverse effects.

The government’s report named many enterprises which took big losses in H1 and are predicted to continue facing difficulties.

Vietnam Airlines Corporation predicts a loss of VND15-16 trillion in 2020. It is expected that it will stop taking a loss in 2024. Meanwhile, its taxable income was VND2.34 trillion in 2019, and the corporate income tax it paid was VND468 billion.

The Vietnam Chemicals Group took a loss of VND1 trillion in H1 and is predicted to continue taking a loss of VND500 billion in Q3. It reported a loss of VND1.595 trillion in 2019 and did not have to pay corporate income tax.

Petrolimex reported a loss of VND220 billion in H1. Its taxable income was VND1.148 trillion in 2019, and it paid VND229 billion in corporate income tax.

The estimate of the State budget revenue in 2020 is VND1,510 trillion. The accumulated revenue in the first nine months was VND975.3 trillion, or 64.5 percent of the estimate.

As of September 23, the state budget had spent VND17.49 trillion to fight against Covid-19 and support people facing difficulties during the pandemic, according to the local media, the Vietnamnet.

By Luong Bang

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