On-bet88 kèo-spot import-export mechanism to be revived

Since its introduction way back in 1998, Vietnam’s on-bet88 kèo-spot (OTS) export and import scheme, allowing for export and import processes to occur in-country, has become a key component of its annual trade turnover, benefiting both foreign and domestic enterprises.

bet88 kèo Ministry of Finance (MoF) and bet88 kèo General Department of Vietnam Customs have recently been revising Decree No. 59/2018/ND-CP, which amends provisions of Decree No. 08/2015/ND-CP concerning customs procedures. One major change being proposed is bet88 kèo removal of bet88 kèo OTS export and import regulation outlined in Article 35 of Decree No. 08. This has, however, raised significant concerns among businesses involved in foreign trade in Vietnam.

Speaking at bet88 kèo “On-bet88 kèo-spot exports and imports: Opportunities and challenges” seminar, held on January 8 in Hanoi, former Deputy Minister of Industry and Trade Tran Quoc Khanh pointed out that bet88 kèo scheme, introduced in late 1998, was designed to boost bet88 kèo competitiveness of domestic enterprises in bet88 kèo export supply chain. While bet88 kèo government has set ambitious growth targets for bet88 kèo future, this mechanism not only supports export growth but also creates added domestic value, raising questions as to why it isn’t being fully leveraged.

Building domestic supply chains

Mr. Nguyen Hai Minh, Vice Chairman of EuroCham Vietnam, said OTS exports and imports accounted for more than 18.8 per cent of Vietnam’s annual trade turnover in 2022, reflecting its significant contribution to bet88 kèo country’s trade activities.

bet88 kèo mechanism has also notably helped businesses save substantial sums on logistics costs. Instead of transporting individual product components overseas for assembly or importing raw materials for production, parts used to assemble an export product can be manufactured and moved within a closed domestic supply chain to various local businesses before being shipped overseas. This approach not only enhances national competitiveness but also facilitates seamless supply chain management for foreign traders by consolidating bet88 kèo process from raw materials to finished goods within a single country.

Another critical advantage of bet88 kèo OTS scheme is that it does not impose additional tax burdens on any of bet88 kèo parties involved in bet88 kèo transaction. This further underscores its importance in fostering cost efficiency and supporting both domestic and foreign enterprises engaged in Vietnam’s supply chain.

Mr. Truong Van Cam, Vice Chairman and General Secretary of bet88 kèo Vietnam Textile and Apparel Association (VITAS), emphasized that bet88 kèo OTS mechanism has been crucial in developing Vietnam’s textile and garment industry. He noted that new-generation free trade agreements (FTAs), such as bet88 kèo Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), require production processes from yarn to fabric to garment manufacturing to qualify for a 0 per cent tax rate on exports to member markets. Similarly, bet88 kèo EU-Vietnam FTA (EUVFTA) mandates domestic production from fabric to garment to access preferential tax rates. “If materials are imported and only garment manufacturing is done domestically, bet88 kèo added value remains minimal, and Vietnam loses bet88 kèo advantages in FTAs it has negotiated,” Mr. Cam said.

bet88 kèo mechanism has also fostered bet88 kèo growth of supporting industries for raw material production in bet88 kèo textile sector. While Vietnam once relied heavily on fabric imports, it now produces 3 billion sq m of fabric annually, with 2.6 billion sq m exported in 2024, generating .6 billion. Additionally, over 50 per cent of bet88 kèo 4 million tons of yarn produced annually is exported, yielding .4 billion in revenue.

Adding to this, Ms. Phan Thi Thanh Xuan, Vice Chairwoman and General Secretary of bet88 kèo Vietnam Leather, Footwear, and Handbag Association (LEFASO), emphasized that thanks to mechanisms encouraging bet88 kèo development of domestic supply chains, bet88 kèo leather and footwear industry has significantly reduced its reliance on imports, from 70 per cent of raw materials in bet88 kèo past to only billion in imports compared to total export turnover of approximately billion in 2024. Domestic material supply now meets 55 per cent of bet88 kèo industry’s demand, equivalent to a value of around .8-5 billion.

Loopholes to close

While bet88 kèo OTS export and import mechanism has contributed significantly to Vietnam’s supply chains for key export products, it has also exhibited certain shortcomings. bet88 kèo first is bet88 kèo loss of State budget funds. According to Vietnam Customs, OTS export turnover reached billion in 2022, while imports totaled billion, with a billion surplus remaining untaxed. “Revenue from these activities has contributed about VND10 trillion (3.9 million) to bet88 kèo State budget,” said Mr. Nguyen Bac Hai, Deputy Director of bet88 kèo Customs Control and Supervision Department at Vietnam Customs. “A 20 per cent corporate income tax on bet88 kèo billion surplus could generate approximately VND106 trillion (.2 billion), meaning that over VND95 trillion (.7 billion) is being lost,” This is one reason why Vietnam Customs and bet88 kèo MoF are seeking amendments to Decree No. 08, including removing Article 35.

He also noted that bet88 kèo abolition of bet88 kèo provisions in Article 35 would bring significant benefits to both customs authorities and businesses. For enterprises, for example, it would streamline administrative procedures, reducing time and cost.

Mr. Minh, meanwhile, argued that abolishing Article 35 would have negative impacts on Vietnam’s import and export activities, particularly in bet88 kèo absence of a clear mechanism for invoices and VAT declarations after converting OTS export and import transactions into direct domestic transactions. Additionally, bet88 kèo removal of bet88 kèo mechanism would eliminate bet88 kèo ability of foreign traders to coordinate supply chains, which is a key driver in bet88 kèo formation of these chains in Vietnam.

“Over bet88 kèo past 15 years, thanks to bet88 kèo OTS mechanism, Vietnam has developed a great deal in bet88 kèo production of raw materials, which has given bet88 kèo country a major competitive edge,” according to Ms. Claudia Anselmi, Vice Chairwoman of EuroCham Vietnam and General Manager of bet88 kèo Hung Yen Knitting and Dyeing Co. For example, 95 per cent of Hung Yen Knitting and Dyeing’s products were exported to China 15 years ago, while now, 70 per cent goes to Vietnamese companies working under contract for foreign customers, generating revenue and creating jobs.

“If this mechanism disappears, European companies will be concerned about whether they can continue to do business in Vietnam, as costs will increase, while returning to bet88 kèo model of importing materials from China is no longer viable because bet88 kèo global market is heading towards sustainability, which requires a vertical supply chain to save costs, protect bet88 kèo environment, and expedite bet88 kèo manufacturing process,” she explained.

Nevertheless, she also highlighted certain areas requiring improvement in bet88 kèo implementation of bet88 kèo OTS import and export mechanism, as it can indeed create challenges for businesses. For instance, bet88 kèo current requirement to store goods in bonded warehouses during transit between domestic enterprises disrupts delivery schedules and imposes unnecessary logistics costs.

Improve not replace

Experts and business association representatives unanimously agree that Vietnam should focus on improving implementation instead of abolishing bet88 kèo OTS import and export mechanism. This approach would maintain bet88 kèo State’s role in oversight and revenue collection while fostering an environment for businesses to build domestic supply chains that support exports.

Mr. Hong Sun, Chairman of bet88 kèo Korean Chamber of Commerce and Industry in Vietnam (KOCHAM), said nearly 80 per cent of South Korean businesses in Vietnam operate in bet88 kèo manufacturing sector, with most of their products serving bet88 kèo global market. He suggested that rather than removing bet88 kèo OTS mechanism, bet88 kèo Vietnamese Government should create incentives to encourage use. One necessary solution, he added, is to expedite bet88 kèo tax refund process for businesses engaging in on-bet88 kèo-spot imports and exports, enabling them to access capital to expand their operations in Vietnam.

In addition to improving tax refund procedures to enable businesses to reinvest, experts also suggest that bet88 kèo government amend bet88 kèo Commercial Law to include provisions specifically governing on-bet88 kèo-spot imports and exports. This would facilitate management by customs authorities and bet88 kèo MoF. Furthermore, stricter oversight is necessary to ensure that final products in bet88 kèo supply chain are genuinely exported abroad, preventing businesses from exploiting bet88 kèo on-bet88 kèo-spot import and export mechanism to benefit from preferential tax policies. Businesses also recommend that government agencies remove bet88 kèo clause requiring foreign traders to lack a physical presence in Vietnam to participate in OTS export and import activities.