World Bank: Vietnam’s private sector minimum wage is high, 58% of the median wage

A key benchmark of minimum wages is the relationship to median wages, and for Vietnam the picture differs sharply between the government and private sectors. Vietnam’s state sector wage is low by global and regional standards at around 30% of the median wage, while the private sector minimum wage is high, with the average ratio of minimum to median wage around 58%.

Read more

Pay increases depend on productivity – Bui Sy Loi

Bui Sy Loi, Deputy Head of the National Assembly’s Social Affairs Committee, speaks to Ha Noi Moi (New Ha Noi) about salary reforms.

Will you please ex-plain why workers’ average wages in Viet Nam are lower than their peers in the region and the world?  

It is a universal truth that adjustment of a worker’s minimum wage and their basic monthly salary depend on the economic growth rate, labour productivity and consumer price index (CPI) of the country. Read more

Asian Development Outlook 2013 – Vietnam Outlook

Asian Development Outlook 2013Vietnam’s economy stabilized in 2012 as previous policy tightening suppressed inflation and bolstered external accounts. Subdued economic growth prompted an easing of monetary policy last year, but lending was constrained by problems in the banks. GDP growth is forecast to edge up this year and next, with inflation in the high single digits. Sustaining foreign direct investment inflows and maintaining competitiveness requires intensified efforts to reform banking, state-owned enterprises, and the business environment.

Read more

Bank bad debt is the biggest challenge faced by Vietnam: ADB Country Director Tomoyuki Kimura

Tomoyuki Kimura, ADB Country DirectorFeb 1, 2013. Nonperforming loans remain a critical issue for the banking sector this year, and have reinforced the need to carry out comprehensive reforms of the sector, Tomoyuki Kimura, the Asian Development Bank’s country director for Vietnam, tells Vietweek.
The banking sector is the biggest challenge. Nonperforming loans are one of the most critical issues for the financial and banking sector in Vietnam this year. The ratio of nonperforming loans to total loans increased to an estimated 4.5 percent in May and the central bank acknowledged that the figure could be close to 8.6 percent.

HSBC: Inflationary pressure keeps building, core inflation 12.6% in January

Inflationary pressures are on the rise. HSBC: Vietnam at a glance, Feb 1, 2013HCMC, Feb 1, 2013. Vietnam must practice prudence if it is to maintain inflation at the single-digit level as the inflationary pressure keeps rising while response policies are not enough, say HSBC economists in their monthly publication, Vietnam at a glance.

Core inflation remains sticky at 12.6% y-o-y in January, up from 12.2% in December. The significantly higher core inflation, coupled with rising oil prices, means that headline inflation could increase significantly should food inflation accelerate. With China on track for a recovery, global commodity prices may rise, which means that Vietnam would have to be vigilant should it want to maintain single-digit inflation. Read more

VCCI Chairman: Reduce corporate income taxes and have a stable wage adjustment roadmap

vu-tien-loc-sAround 100,000 businesses are forecast to close between 2011 and 2012. The figure is equal to half of the figures over the entire past two decades since Vietnam adopted the Law on Enterprises, Chairman of the Vietnam Chamber of Industry and Commerce (VCCI), Vu Tien Loc forecast.

Loc further said the enterprises that were still in business were meeting difficulties such as incomprehensive policies, lack of capital and especially a lack of transparency in the business environment.

He said there are two key points in order not to increase the difficulties that businesses face: (1) corporate income tax (CIT) and (2) workers’ wages.

Corporate Income Tax
In Vietnam, CIT is higher then neighboring countries. Thailand recently lowered the CIT from 30% to 23%. Japan, Korea, Thailand have 17% CIT for small and medium enterprises, while in Vietnam it is 25%. It should be reduced immediately to 20%. Some say it wouldn’t help to reduce CIT now, since companies aren’t making profits, but it would help those companies that are surviving, and lay the groundwork for investment in the future.

Minimum Wage Adjustment
As for workers’ wages, VCCI and a number of industry associations recently sent a letter to the Prime Minister and government agencies regarding the road map for minimum wage adjustments. We agree that it is necessary to increase wages to improve workers livelihoods. However, this has a big impact on companies, so it is necessary to plan carefully, with an agreed roadmap, rather than decide on random increases every year. Also, wage increases need to be based on labour productivity increases, which, in Vietnam, average around 4.5 – 5% per year, while the average in ASEAN is around 10%. Accordingly, VCCI and industry associations have proposed that the minimum wage adjustment be about 15% per year for the next three years, 2013 – 2015. A stable minimum wage adjustment road map like this will allow companies to plan their budgets, their production, and their overall business development.

Read more … .

State Sector Minimum Wage Adjustment
Govt says can’t afford state sector minimum wage increase in 2013, Oct 10, 2012
State sector minimum wage increase “will fuel domestic demand and consumption,” Oct 23, 2012
Cut expenses, eliminate waste to increase State sector minimum wage, Oct 24, 2012
State sector minimum wage increase, Oct 25, 2012
National Assembly may postpone state sector minimum wage increase, Oct 29, 2012
State sector minimum wage increase reduced from 24% to 9.5%, delayed two months, Nov 1, 2012
State sector minimum wage hike of 100,000 vnd (to 1.15 million vnd/month) to be effective July 1, 2013, VIR, Nov 6, 2012

Private Sector Minimum Wage Adjustment
Minimum Wage Adjustment for 2013, Aug 21, 2012
Minimum Wage adjustment (increase) spooks many enterprises, Aug 27, 2012
Private Sector Minimum Wage Adjustment Option #3, Oct 16, 2013
Cost Impact: New Labour Code, New Union Law, and Draft Employment Law
VBF Dialogue with MOLISA and MPI re Labour-related issues, Nov 2, 2012
VCCI: 15% Annual Private Sector Minimum Wage Hike 2013-2015, Nov 5, 2012

Vậy theo ông, cần phải làm thêm gì để hỗ trợ doanh nghiệp?

– Tôi cho rằng cần làm 2 việc: không tạo thêm khó khăn và đưa doanh nghiệp tiến mạnh hơn vào quá trình tái cấu trúc. Để không tạo thêm khó khăn, tôi đồng ý là phải hỗ trợ chi phí, nhất là trong các khoản thuế và chính sách lương.

Thuế thu nhập doanh nghiệp tại Việt Nam hiện cao hơn so với các nước trong khu vực. Như Thái Lan, họ vừa giảm từ 30% xuống 23%. Nhật Bản, Hàn Quốc và Đài Loan (Trung Quốc) đều đang áp thuế với khu vực vừa và nhỏ là 17%, trong khi ở Việt Nam hiện vẫn là 25%.

Tôi nghĩ cần phải giảm ngay mức thu này. Cụ thể bao nhiêu còn tuy thuộc vào ngân sách nhưng nếu có thể, nên đưa ngay xuống 20%. Vừa qua cũng có ý kiến cho rằng giảm thuế vào lúc này không có nhiều ý nghĩa, bởi thực tế đâu có nhiều doanh nghiệp có lợi nhuận để đánh thuế. Tuy nhiên tôi cho rằng đây mới chính là lúc cần hỗ trợ số ít các doanh nghiệp đang có lãi, để họ có cơ hội tích lũy, đầu tư trong tương lai.

Về lương, VCCI cùng một số hiệp hội ngành nghề lớn vừa có văn bản kiến nghị lên các cơ quan chức năng về lộ trình tăng lương tối thiểu. Chúng tôi đồng ý cần tăng lương để cải thiện đời sống người lao động. Tuy nhiên, đây là việc ảnh hưởng rất lớn đến doanh nghiệp nên cần tính toán kỹ, có lộ trình cụ thể cho trung hạn, thay vì cứ mỗi năm lại có mức tăng khác nhau.

Cũng cần lưu ý rằng, tăng lương phải gắn với tăng năng suất lao động. Tốc độ tăng năng suất bình quân ở Việt Nam hiện là 4,5% ~ 5% một năm, trong khi trung bình ASEAN là 10%. Do vậy, sau khi cân nhắc, chúng tôi đề xuất mức tăng lương 15% một năm, trong vòng 3 năm tới. Tăng ổn định như vậy thì doanh nghiệp mới tính toán, đưa vào kế hoạch sản xuất, kinh doanh được. Cuối cùng, như đã nói ở trên, tôi cho rằng cần đẩy mạnh hơn nữa quá trính tái cơ cấu, tăng cường tính minh bạch trong cả chính sách lẫn tại doanh nghiệp. Một doanh nghiệp có thể giữ kín bí mật kinh doanh, nhưng tài chính thì phải công khai, rõ ràng.

Read more …