CURRENCY MANIPULATION PROBLEM - LEARNINGS FOR VIETNAM
5. POLICY IMPLICATIONS OF IMPLEMENTING ASEAN SINGLE WINDOW TO IMPROVE LPI OF VIETNAM
To improve Vietnam’s LPI in the 2021-2025 period, raising it to the range of 5-10 levels, actively contributing to the improvement of business environment, cutting costs, and enhancing competitiveness in service provision (Ministry of Industry and Trade, 2019a), It is necessary to implement the following solutions:
Firstly, the Ministry of Finance and the General Department of Vietnam Customs should prepare necessary conditions to effectively implement the content: Decree No. 85/2019/ND-CP of the government, dated November 14, 2019, regulating the implementation, administrative procedures following National Single Window, ASEAN Single Window and specialized inspection for imported and exported goods; Decision No. 1254/2018/QD-TTg of the Prime Minister, September 26, 2018 approving the action plan to promote NSW and ASW, reforming of specialized inspection for goods for export, import and trade facilitation in the period 2018 - 2020 and the decision to amend and supplement Decision No. 1254/2018/QD-TTg. On that basis, it is necessary to implement level 4 online public administrative procedures through NSW with a focus such as:
Implement all administrative procedures for exported, imported and transited goods; people and means of transport leaving, entering and transiting through NSW thereby improving the clearance time of international transport vehicles; Continuing to hold the same position as the group of 4 leading countries in the ASEAN region in terms of clearance time and release of goods, people and vehicles related to single-window administrative procedures; 100% of administrative procedures in NSW are collected fees and charges electronically by 2020.
Implement the Master Plan on developing information technology systems for NSW and ASW deployment in the direction of centralized processing, coordinating with relevant units to prepare technical conditions to be ready for exchange electronic ASEAN customs declarations (for Indonesia and Thailand) and phytosanitary certificates (for Indonesia), further official connection with the Philippines and improvement of exchanging of origin certificates. import and export goods with ASEAN member countries.
Secondly, in the specialized inspection of import and export goods, it is necessary to focus on developing and effectively implementing the Project on reforming specialized inspection in the direction of assigning the customs office to be the focal point to carry out the inspection.
specialized agencies at the border gate (except for items related to security, defense, quarantine...), the specialized management ministry shall carry out post-inspection. In addition, it is necessary to review the system of legal documents to define the functions and tasks for the customs authority to perform unified specialized management at the border gate; review and abolish and simplify unnecessary administrative procedures; carry out risk assessment, gradually change from pre-inspection at border gates to post-pre-inspection; have a mechanism for coordination, recognition of quality certification and specialized inspection of goods between countries that have trade agreements with Vietnam.
CONCLUSION
In the context of regional and global economic integration, creating favorable conditions for trade and investment is inevitable not only for the ASEAN region but also for most countries in the world. On the basis of the selected research objectives and methods, the study found a positive relationship between the two criteria of customs clearance and the quality of logistics services with the LPI index. Thereby, the study analyzed and pointed out that the ASEAN Single Window (ASW) has a positive impact on two criteria of customs clearance and quality of logistics services in order to improve the national capacity in logistics of 10 members of ASEAN. The study also proposed a group of common solutions for ASEAN member countries and a group of solutions for Vietnam. However, due to the wide scope of research, the in-depth analysis of the LPI of each country is still limited. These contents will be further studied by the author in the near future.
REFERENCE
1. ASEAN Secretariat. (11/2019). ASEAN Key Figures 2019, Jakarta.
2. ASEAN Secretariat. (2019). ASEAN integration report 2019
3. ASEAN Secretariat. (2008). ASEAN Economic Community Blueprint, Jakarta.
4. ASEAN Secretariat. (2015). Roadmap for an ASEAN Community 2009-2015.
5. ASEAN-US Technical Assistance and Training Facility. (2018) Toward a Roadmap for Integration of the ASEAN Logistics Sector: Rapid Assessment & Concept Paper Executive Summary
6. Ban chỉ đạo Thông tin tuyên truyền ASEAN. (2017), Sổ tay truyền thông ASEAN hiện thực hóa tầm nhìn ASEAN 2025.
7. (ASEAN Information and Propaganda Steering Committee. (2017), ASEAN Communication Manual to realize ASEAN Vision 2025)
8. Bộ Công thương. (2019a), Quyết định số 708/QĐ-BCT ngày 26/3/2019 phê duyệt Kế hoạch cải thiện chỉ số Hiệu quả Logistics của Việt Nam.
9. (Ministry of Industry and Trade. (2019a), Decision No. 708/QD-BCT dated March 26, 2019 approving the Plan improving Vietnam’s Logistics Performance Index.)
10. Bộ Công thương. (2019b), Tài liệu hướng dẫn về chỉ số hiệu quả logistics (LPI).
11. Ministry of Industry and Trade. (2019b), A Guide related to the Logistics Performance Index (LPI).
12. Chính phủ. (2019). Nghị định số 85/2019/NĐ-CP ngày 14 tháng 11 năm 2019 quy định về thực hiện thủ tục hành chính theo cơ chế một cửa quốc gia, cơ chế một cửa ASEAN và kiểm tra chuyên ngành đối với hàng hóa xuất khẩu, nhập khẩu.
13. (Government. (2019). Decree No. 85/2019/ND-CP dated November 14, 2019 stipulating the implementation of administrative procedures under the National single window, the ASEAN single window and specialized inspection for exported and imported goods.)
14. Joann Peterson. (2017). An Overview of Customs Reforms to Facilitate Trade, Journal of
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15. Jose Tongzona and Inkyo Cheong. ( 2013). The challenges of developing a competitive logistics industry in ASEAN countries, International Journal of Logistics: Research and Applications, 2013.
16. Martí and et... (2014). The importance of the Logistics Performance Index in international trade, Applied Economics 46(24), May 2014.
17. Nguyễn Tương. (2018). Cần có sự hiểu biết đúng về logistics performance index (LPI).
18. (Nguyen Tuong. (2018). It is important for proper understanding of the Logistics performance index.)
19. Ponciano INTAL Jr. (2015). AEC Blueprint Implementation Performance and Challenges:
Trade Facilitation, Economic Research Institute for ASEAN and East Asia.
20. Sanchita Basu Das. (2017). ASEAN Single Window: Advancing Trade Facilitation for Regional Integration, SEAN Studies Centre of ISEAS – Yusof Ishak Institute, Singapore.
21. Thủ tương chính phủ. (2017). Quyết định số 200/2017/QĐ-TTg của Thủ tướng Chính phủ:
Về việc phê duyệt Kế hoạch hành động nâng cao năng lực cạnh tranh và phát triển dịch vụ logistics Việt Nam đến năm 2025.
22. (Prime Minister of Government. (2017). Decision No. 200/2017/QD-TTg of the Prime Minister: On approving the Action Plan to improve competitiveness and develop logistics services in Vietnam to 2025.)
23. Thuy Nguyen, Tu Anh Nguyen, Hoang Truong Giang. (2014). Trade Facilitation in ASEAN Members - A Focus on Logistics Policies Toward ASEAN Economic Community.
24. Ủy ban chỉ đạo về cơ chế một cửa ASEAN. (2017). Cẩm nang về cơ chế một cửa quốc gia và cơ chế một cửa ASEAN.
25. (Steering Committee on ASEAN Single Window. (2017). Handbook on National Single Window and ASEAN Single Window.)
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PhD. Nguyen Dao Tung1, PhD. Hy Thi Hai Yen1
Abstract: In the context of renovating the operation of public non-business units as orientation of improving the quality and efficiency of public service supply, a lot of mechanisms and policies need to be improved, including Accounting, an effective financial management tool. Fixed assets are one of the key sources in the public non-business unit and there are certainly many changes in this time. Therefore, with this article, the authors want to emphasize that it is definitely necessary to apply the principles of public accounting standards to the accounting of fixed assets in public non-business units in Vietnam, which defines more clearly the position and role of accountants in financial management in general and in asset management in particular in order to adapt to new requirements.
Requirements in the management, usage, calculation of depreciation and amortization of fixed assets when public non-business units promote transformation of operating models towards improving quality and efficiency.
Firstly, in the past, most of activities in public non-business units in Vietnam have been performing political tasks, ensuring social security with operating funds guaranteed by the state budget. Therefore, most ouf the assets in public non-business units are formed from the state budget. Besides, monitoring the increase and decrease of these assets, accountants also monitor, calculate and account the depreciation instead of amortization of fixed assets is also a matter of concern and is considered relatively simple for the accountant at the entity. However, since the self-control mechanism, especially financial autonomy at the units was promulgated, implemented more and more widely in reality, the activities of public non-business units have been much more diversified, which can be divi0ded into main activities such as administrative, production and business activities and service provision, capital construction investment activities, financial activities and other activities. Therefore, fixed assets in public non-business units are formed not only from the state budget but also from various sources such as the unit fund, business capital, loan capital, capital contribution, joint venture, association, etc. Therefore, accounting for fixed assets needs to be adjusted to fit the diversity of these activities. Along with that, an important content of the autonomy mechanism is the price mechanism for public administrative services.
According to the roadmap for calculating public administrative service prices, one of the factors that will be included in the service price structure is the cost of depreciation of fixed assets. This
1 Email: nguyendao tung@hvtc.edu.vn Academy of Finance
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is the last factor included in the roadmap, not only because of its great impact on service prices, but also because of the complexity when depreciating fixed assets in the public non-business units.
Therefore, this is also a problem that accounting for fixed assets needs to complete.
Secondly, in the past, public service provision at public non-business units could be considered a unique feature in Vietnam, which was separated from production, business and service provision in the private sector. Multiplied with the view that all revenues from this activity are included in the state budget revenue stream in the form of fees and charges. Now, with the amendment of the State Budget Law, the Law on Fees and Charges, separating this non-business revenue source from the list of fees - fees and state budget revenues, this activity has had a large asymmetry with the private sector. Therefore, the mechanism of management and accounting of fixed assets in public non-business units also needs to be shortened, together with eliminating the gap between these two public and private sectors.
Thirdly, the process of renovating the operation mechanism of public non-business units to improve the quality and efficiency of service provision has led to many expanded activities such as capital contribution, joint venture investment, association, public cooperation, and transformation of forms of units in further, etc. Then, agencies will have to determine their own entire value of the state’s capital, which represents most of the state’s property value at public non-business units. Especially, in case the ownership is owned by the entity as the representative of the state’s capital in the unit, they must be responsible for preserving and developing this capital, along with clearly defining the functions, responsibilities, duties of each department to preserve and develop state capital at the unit. The task of the accountant will be reflecting and providing clear information about the value of equity and the change of equity at the entity during the operation as well as the implementation of the mechanism.
Some current differences between accounting for fixed assets at public non-business and public accounting standards1
Firstly, regarding the scope of fixed assets regulation
Basically, the scope of regulations on fixed assets in public non-business units in Vietnam according to Circular 45/2018/TT-BTC is relatively consistent with international public accounting standards in general and public accounting standards in Vietnam. private. However, regarding items such as spare parts, backup equipment and maintenance equipment of fixed assets or individual assets will constitute an item of real estate, plant, and equipment. The recognition of these items is specified in IPSAS & VPSAS as follows: “Items such as spare parts, backup equipment and maintenance equipment are recognized in accordance with this standard if they meet the requirements of the standards for the recognition of property, plant, and equipment. If the definition and recognition criteria for real estate, plant, and equipment are not met, these items are classified as inventory. This standard does not set for the identification of the individual assets constituting an item of real estate, plant and equipment upon recognition.
1 The authors make a simultaneous comparison between IPSAS - international public accounting standard, VPSAS - Vietnamese public accounting standard and documents related to fixed asset accounting at public non-business unit:
(1) Circular 45/2018/TT-BTC stipulating the management, use and calculation of depreciation and amortization of fixed assets in state agencies and public non-business units.
(2) Circular 107/2017/TT-BTC guiding the administrative and non-business accounting regime.
Therefore, it is necessary for an entity to evaluate the application of the asset recognition criteria in particular case. An entity may recognize the total value of single assets that are not highly valued, such as library books, computer accessories, and small appliances, rather than recognizing individual assets”. However, in Circular 45/2018/TT-BTC, there are no separate guidelines for asset recognition in these cases.
Secondly, regarding the standards and conditions for recognition of fixed assets
In both public accounting standards and Circular 45/2018/TT-BTC, there are standards on usage time, but if IPSAS and VPSAS give opinions on the possibility of obtaining economic benefits and potential service from assets in future, the current accounting of fixed assets in Vietnam has not mentioned this issue. On the other hand, if IPSAS & VPSAS only show requirements on the reliability of the value of fixed assets (according to initial cost or fair value), then according to Circular 45/2018/TTB, the value of fixed assets is clearly specified from 10 million VND or above (excluding specific assets valued at 5 million VND or above) and have not paid attention to the use of fair value to recognize fixed assets.
This is a big difference between the public sector and the corporate sector in Vietnam, creating many practical problems when the unit determines the object of deduction or not to depreciate fixed assets. The regulation of the initial cost of fixed assets of 10 million VND or above will lead to management of assets, work of depreciation as well as reports which manage that fixed asset, will be cumbersome because the depreciation for periods with the value of small fixed assets is not necessary. Public non-business units must keep track of 2 detailed books of fixed assets according to 2 different standards to calculate depreciation and amortization, in particular, fixed assets with initial cost from VND 30,000,000 used for production and business activities, depreciation must be calculated as enterprises in accordance to current regulations, and keep track of the detailed books of fixed assets according to current regulations (for fixed assets with initial cost of VND 10,000,000 or above) at the same time. This leads to a waste of money of the State in the management of fixed assets, waste of accounting and management human resources.
Thirdly, regarding determining the initial recognition value
In Article 7, Circular No. 45/2018/TT-BTC, regulations on recording the initial value of primary fixed assets cost are determined almost similarly to IPSAS. Particularly, the initial fixed assets cost formed from investment, including the costs of preparation, ground reinforcement, etc., are recorded (as Clause 2, Article 7, Circular No. 45/2018/TT-BTC and Article 3, Clause 3, Article 4, Circular No. 10/2020/TT-BTC dated February 20, 2020). However, according to IPSAS
& VPSAS, the component of the initial cost includes the present value of the cost of dismantling, moving, and restoring the site after finishing using property, in Vietnam, the costs included in the initial cost of the asset are only counted when the fixed asset is used.
Fourthly, regarding depreciation and amortization of fixed assets
Like IPSAS, VPSAS and Vietnam’s depreciation and amortization management regime states that all fixed assets must be depreciated. Depreciation and depreciation expenses are included in expenses and income in a period. However, compared to IPSAS & VPSAS, the regulations on depreciation and amortization at public non-business units in current time also have some differences, including:
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- Assets still calculate depreciation, amortization normally when the recoverable liquidation value of that asset is higher than its residual value, while this case stops calculating depreciation until when the recoverable liquidation value of the asset is equal to its residual value in IPSAS &
VPSAS;
- In case of calculating the depreciation of fixed assets that have just been put into use in the last days of the year or in only a few months, the depreciation will still be sufficient for the first year of recording the increase of that asset. This is not suitable with the accrual basis principle.
- In the regulations of fixed asset accounting in public non-business units in Vietnam, there is a difference in the categories of “depreciation” and “amortization” of fixed assets. “Depreciation” is only used in non-business units are autonomous in terms of recurrent and investment expenditures, non-business units are subject to full depreciation in service prices, public non-business units are allowed to use fixed assets in their business activities, leasing, etc. which do not form a new legal entity. Fixed assets in the rest public non-business units are subject to depreciation.
Besides, although there are different methods of depreciation of fixed assets depending on the characteristics of the unit’s field of operation, depending on the nature and function of the asset, this is clearly specified in IPSAS and VPSAS. However, according to regulations in the current mechanism of management, use and calculation of depreciation and amortization of fixed assets in the public sector in Vietnam, public non-business units use only the straight-line method to depreciate assets depreciation in their unit. This is a big limitation for public non-business units operating in non-business fields that are greatly affected by scientific and technological advances, and need to be applied more appropriate depreciation methods such as declining balance depreciation or amortization according to output.
Fifthly, regarding the residual value of fixed assets formed from the state budget is reflected in account 36611, which is belonging to the group of accounts payable. However, the nature of the operation of the State handing over fixed assets or providing funding for the public non - business units to buy assets is the form that the State allocating capital to the entity, resulting in the value of the fixed assets increasing the owner’s equity, which is not a liability. Because if this is considered as a payable, when it is paid off and this payable is settlement, will the State’s capital and the entities’ responsibilities still exist?
Some recommendations to apply public accounting standards to accounting for fixed assets in public non-business units
It can be seen that most of the contents in the public accounting standards for assets have been reflected in the current regulations on accounting for fixed assets in public non - business units in Vietnam. However, in order to eliminate some of the differences as analyzed above and meet the new development trends of public non-business units in the future, it is necessary to apply the following contents:
- Regarding the time of recognition: at present, determining the time to recognize fixed assets in some cases is still quite difficult (even though they have been put into use), typically fixed assets which are created from many sources (especially sources of socialization), fixed assets in programs, projects, assets which are built, transferred and put into use, or many items have been put into use but
have not been handed over and settled, etc. Therefore, to overcome this ambiguity, it is necessary to uniformly regulate the time and conditions for recognition of fixed assets: Tangible fixed assets must be recognized when the entity considers it likely to receive economic benefits in the future or potential services from the asset, and the initial cost or fair value of the asset can be reliably measured.
- Regarding the initial recognition value: there should not be a hard regulation on the amount to be recognized for the value of fixed assets, as well as the need to remove the difference in the conditions for recognizing fixed assets in the public and private sectors in order to create equality between public service providers serving the people, convenience in the process of management and control
- Regarding asset depreciation: the method of depreciation, the useful life of each fixed asset depends a lot on the type and operation characteristics of each public non-business unit. Therefore, these contents should not be rigidly regulated, but should be left to the unit to be freely chosen and disclosed in its accounting policy.
- Regarding fixed asset accounting: it is necessary to agree on the appropriate method of recording fixed assets formed from different sources, and at the same time, reflect the residual value of fixed assets, especially fixed assets formed from the state budget on an account of net assets/equity instead of the current account of liabilities to ensure the assignment of fixed assets by the State to public non-business units is a form of equity allocation and also a manifestation of responsibility in preservation and growth of State ownership capital in the units.
CONCLUSION
In the context of renovating the operation of public non-business units in the direction of improving the quality and efficiency of public service delivery, a series of mechanisms and policies need to be improved, including accounting - a powerful financial management tool. Fixed assets are one of the key resources in the public non-business units and there is certainly a lot of movement in this context. Therefore, the application of principles in public accounting standards to the accounting of fixed assets in public non-business units in Vietnam is really necessary to further affirm the position and role of accountants. accounting in financial management in general, and in asset management in particular in order to adapt to new requirements.
REFERENCES
1. International Public Accounting Standards on Assets (IPSAS 17 & IPSAS 31)
2. Vietnamese Public Accounting Standards (VPSAS 17 & VPSAS 31) according to Decision 1676/QD-BTC dated September 1, 2021 on announcement of 05 Vietnamese accounting standards phase 1
3. Ngo Thanh Hoang (2020), Research on the application of international public accounting standards in public asset management in Vietnam, ministerial-level project.
4. Circular 107/2017/TT-BTC guiding the administrative and non-business accounting regime.
5. Circular 45/2018/TT-BTC guiding the management, use, calculation of depreciation and amortization of fixed assets in state agencies and public non-business units.