Banking & Finance

According to the Ministry of Finance, State budget contributions have been down since April, when the fourth outbreak of Covid-19 began. The State budget is facing a deficit due to rising tax debts and additional funding on anti-pandemic measures, which has consumed nearly VND19 trillion ($837 million) to date.

There are currently no legal regulations in Vietnam on the activities of companies providing financial technology (fintech) solutions. The government has therefore assigned the State Bank of Vietnam (SBV) to coordinate with relevant ministries and agencies to develop a decree on the controlled testing mechanism over fintech activities in the banking sector in the fourth quarter of 2021.

Banks have become engaged in a race to waive or reduce service and payment fees to attract CASA (Current Account Savings Account) deposits and promote services based on an expanded customer segment. Digitization has greatly reduced bank transaction costs, so cutting bank fees will not overly affect profits. Fee exemptions and reductions can therefore be viewed as a profitable strategy.

Under directions from the Ministry of Finance, the General Department of Taxation, and Hanoi authorities, the Hanoi Department of Taxation has promoted the digitalization of tax management. The Department has introduced a mobile tax app and reviewed 32,100 transactions on delivery apps and 756 landlords to prevent tax losses in e-commerce.

Foreign investors net sold VND32.064 trillion ($1.41 billion) on Vietnam’s stock exchange in the first eight months of 2021, double the figure in 2020 as a whole, which was a record VND15.7 trillion ($689.26 million). Experts expect that the stock market will become more attractive to foreign investors in the time to come thanks to barriers being actively removed.

The expansion of preferential loan policies to support mechanization in key agricultural areas is thought to be a prerequisite for commercial banks increasing credit in the agricultural sector. Post-harvest losses have been significantly reduced as a result of mechanization.