FIEs contribute billions of dollars to state budget

FIEs contribute billions of dollars to state budget, illustration photo

The Department of Corporate Finance (DCF) under the Ministry of Finance last week released a report on foreign-invested enterprises’ (FIEs) business and production for the 2012-2016 period conducted a few months ago.

Results showed that FIEs’ contributions to state coffers rose from $3.7 billion in 2012 to $4.94 billion in 2013, $5.5 billion in 2014, $6.26 billion in 2015, and $7.18 billion in 2016 (excluding contributions from crude oil exports).

Tran Tu Quynh, Chairman the Bac Ninh People’s Committee, reported that South Korean giant Samsung, with its Samsung Electronics and Samsung Display facilities based in the province, has been contributing the most to the provincial budget. “In this year’s first half, these two projects helped the province earn VND480 trillion ($21.33 billion) in production value, up 22 per cent on-year, and reach $16.45 billion in export turnover, up 38 per cent on-year and fulfilling 55 per cent of the plan for the whole year,” Quynh said.

According to the DCF, Samsung Electronics and Samsung Display accounted for 68 per cent of the total revenue of all FIEs in the northern province of Bac Ninh in 2016. Samsung Electronics Thai Nguyen held 92 per cent of the total revenue of all FIEs in the northern province of Thai Nguyen. Last year, Samsung facilities in Vietnam occupied about 25 per cent of the country’s total export turnover of $214 billion, according to the General Statistics Office of Vietnam.

The DCF also reported that the total revenue of total FIEs nationwide in 2016 hit $154.29 billion, up 21.7 per cent against 2015, with the greatest rises seen in the southern provinces of Binh Duong (35.4 per cent) and Dong Nai (22.9 per cent) as well as in Hanoi (15.9 per cent) and Ho Chi Minh City (17.6 per cent).

“This revenue increase was higher than the 18.6-per-cent rise in their assets and also higher than their equity increment of 15.5 per cent. This showed that FIEs’ business and production have been quite strong,” said DCF’s representative Nguyen Ngoc Khanh.

Out of all industrial sectors, the electronics and garment-textile industries have been considered the biggest earners.

Specifically, in 2016, while the electronics industry accounted for 28.1 per cent of the total revenue of all FIEs in Vietnam, the garment-textile sector held 10.4 per cent, followed by the agro-fishery processing industry (7.18 per cent), the automobile industry (5.4 per cent), and the chemical-plastic-cosmetics industry (5.3 per cent). The sectors that witnessed high growth in revenue included telecommunications-software (80.2 per cent), electronic home appliances (35.4 per cent), electronic spare parts and computers (24.8 per cent), agro-fishery processing (29.3 per cent), and garment and textile (22.4 per cent).

As of June 20, Vietnam had 25,953 valid foreign-invested projects registered at $331.24 billion, with the greatest batches going to manufacturing and processing ($189.13 billion), property ($56.2 billion), electricity, gas, and water ($21.92 billion), and accommodation and catering ($12.6 billion).