Vietnam’s timber industry is targeting $16.9 billion in export value in 2025. Photo: Le Toan

The Vietnam Timber and Forest Products Association (VIFOREST) ​​has petitioned the Ministry of Finance and relevant agencies to eliminate VAT on primary wood products and recognise them as agricultural outputs exempt from VAT. It has also called for consistent application of Decree 209/2013/ND-CP, which clearly stipulates that ordinarily processed plantation timber should not be subject to VAT.

According to the association, this proposal would allow processing and exporting firms to avoid burdensome deductions and refund procedures, reducing compliance costs and freeing up working capital. “Our goal is to ease administrative bottlenecks, mitigate legal risks, and prevent losses to the state budget from invoice fraud,” VIFOREST stated in its report. The move, it argued, would also protect the incomes of millions of rural household engaged in afforestation.

The sector’s achievements underscore what is at stake. Vietnam today maintains more than 4.6 million hectares of planted forests, producing an annual harvest of 35-40 million cubic meters of timber, sufficient to meet 75–80 per cent of processing demand. Export turnover of wood and wooden products is forecast to reach $16.9 billion in 2025, ranking sixth among Vietnam’s export categories. The industry provides direct jobs for over 500,000 workers and sustains millions of smallholder tree growers.

These numbers point to an acute liquidity challenge. Preliminary figures from VIFOREST indicate that timber enterprises are still waiting for VAT refunds worth around VND6.1 trillion ($250 million). The delay is linked to current procedures that require refunds to be processed only after thorough review.

On paper, the system is meant to secure the state budget. In practice, it has stalled refund approvals for compliant businesses. “Many companies have complete and legitimate dossiers, yet they are still asked to provide additional clarifications over and over again,” noted Cao Xuan Thanh, chief of office at VIFOREST. He stressed that refund processing often exceeded the statutory deadline, causing serious cash flow disruption.

Thanh pointed out that the requirement to trace raw material origins back to individual households is especially unrealistic. “A single export shipment may be sourced from dozens of growers across multiple provinces,” he explained. “The verification process becomes unworkable, and that is where enterprises get stuck.”

The consequences are immediate. Exporters are forced to advance 10 per cent VAT on input materials while awaiting refunds, eroding their capacity to rotate capital. This hits small- and medium-sized firms the hardest. With industry-wide profit margins averaging only 5-7 per cent, the sector loses an estimated VND500-600 billion ($20-25 million) annually due to refund delays, equivalent to 2-3 per cent of total profit.

Delayed refunds also damage Vietnam’s standing abroad. Foreign clients experience late deliveries and deferred payments, eroding confidence. More dangerously, exporters risk sanctions under the EU’s regulation on deforestation-free products (EUDR). “If traceability obligations are not properly met, the EU could issue yellow or red cards, which would severely hurt our market access,” VIFOREST warned.

Nguyen Liem, vice chairman of VIFOREST, added that product classification is another barrier. He observed that plantation timber after harvest, such aslogs, sawn timber, peeled veneer, or woodchips, has not been clearly recognised as “primary processed” goods. “Because of this ambiguity, exporters accumulate large VAT credits that cannot be refunded in time,” he said.

Liem further noted that both enterprises and small traders are still obliged to declare and pay VAT even on minimally processed timber, increasing costs and paperwork. In his words, “These procedures consume enormous time and resources, but the refunds remain out of reach. This has paralysed business cash flows and put many companies at risk.”

The risks extend beyond liquidity. Several exporters waiting on refund larges have been accused of enjoying state subsidies in trade defence investigations overseas. Domestically, extended refund disputes can push legitimate businesses into legal jeopardy. Meanwhile, the “request-and-grant” nature of the current system leaves room for arbitrary delays and even corruption.

These obstacles are driving a troubling shift: some companies now prefer to import timber rather than purchase from domestic plantations, simply to avoid VAT refund complications. This undermines demand for local wood, stripping millions of farmers of stable buyers and disincentivising reforestation. Thanh cautioned that the government might ultimately face the paradox of bailing out commercial plantation forests, a scenario entirely at odds with Vietnam’s sustainable forestry goals.

VIFOREST’s message is clear: resolving VAT refund issues is not merely about tax administration. It is about preserving national reputation, protecting farmers’ livelihoods, and securing the industry’s competitiveness in a global market increasingly focused on sustainability. “If these obstructions are not lifted, we risk losing both domestic and international trust,” Thanh emphasized.

In its petition, the association stresses that timely VAT reform will immediately free up liquidity, reduce exposure to legal risks, and enhance compliance with international traceability standards. More broadly, it would help solidify Vietnam’s position as a reliable, responsible supplier of timber products. “Unlocking these refunds is not a privilege, it is a necessity,” Liem underlined. “Without it, the industry cannot play its intended role as a pillar of the green, circular economy.”

On October 10, the Vietnam Association of Motorcycle Manufacturers (VAMM) reported that combined sales from its five members – Honda, Yamaha, Piaggio, Suzuki, and SYM – totalled just under 622,000 units between July and September 2025, down almost 9.4 per cent on-year. Despite Vietnam remaining one of Southeast Asia’s largest motorcycle markets, the decline signals a pause after two decades of strong growth.

With around 80 per cent of market share, Honda continues to dominate, but has not been spared from the downturn. In September alone, Honda sold almost 164,000 motorcycles, down 11.4 per cent on-year. From April to September, its total sales amounted to just over 1 million units, a slight fall compared with the previous year.

Dealers report sharper drops in recent months, particularly in mid-range scooters, as consumers adopt a wait-and-see approach. “People are wondering whether buying a petrol bike now could restrict them later, or if it’s better to wait until EVs become more affordable. This hesitation is putting the entire market on pause,” a major distributor explained.

In contrast, non-VAMM players such as VinFast, Yadea, and Dat Bike are gaining traction in the two-wheeler EV segment, forcing traditional giants like Honda and Yamaha to accelerate their electrification strategies.

The policy landscape is also reshaping expectations. Under a directive issued by the Prime Minister in July, Hanoi authorities must implement measures to restrict fossil-fuelled motorbikes from operating within Ring Road 1 by July 2026. The following stages will limit petrol-powered private cars inside Ring Roads 1 and 2 by 2028, extending to Ring Road 3 by 2030.

In response, VAMM has petitioned the government, warning that the 2026 restrictions in Hanoi could impose significant burdens on both consumers and industry. The association argues that low-income households and families reliant on multiple petrol bikes would face steep costs in switching vehicles. For businesses, the abrupt shift risks disrupting the entire motorcycle ecosystem – from production and distribution to after-sales services.

“Manufacturers will be forced to make substantial investments in restructuring production lines, upgrading technology, and developing new products, without sufficient time or financial support. This could result in heavy losses, production disruptions, and even bankruptcies,” VAMM noted. Nearly 2,000 dealerships and 200 component suppliers tied to internal combustion engines are expected to bear the brunt of declining revenues, with supply chain fractures a likely consequence.

VAMM also pointed out that companies have already invested hundreds of thousands of dollars in new technology and equipment to meet forthcoming regulations effective from 2027, such as EURO4 emission standards and fuel consumption limits. A sudden pivot to EVs could render these efforts wasteful and undermine the effectiveness of recently enacted environmental policies.

To avoid a disorderly transition, VAMM has proposed a more phased approach with a minimum preparation window of two to three years, giving households, businesses, and regulators time to adapt and mitigate risks.

The association further explained that infrastructure remains a critical barrier. Public charging stations are still insufficient, while concerns over fire safety – particularly in ageing apartment buildings with degraded electrical systems – are rising. “Addressing these issues is essential for consumer confidence, business investment, and the safe, effective rollout of electric mobility,” the association stressed.

In addition, VAMM urged policymakers to introduce supportive incentives, such as tax breaks and preferential credit, to encourage consumer adoption of electric two-wheelers.

The motorcycle market is shifting from sheer volume growth to structural transformation. While 2025 has been a challenging year, analysts predict stabilisation from the second half of 2026 as economic growth resumes, incomes rise, and the green consumption trend strengthens.

The interplay of electrification, technological renewal, and consumer appetite for sustainable mobility is expected to shape the next growth cycle. In the long term, Vietnam will remain a pivotal two-wheeler market in ASEAN, not only for domestic consumption but also for its export potential.

At a national conference in Hanoi on October 9, held ahead of Vietnam Entrepreneurs’ Day, Hoa Phat Group chairman Tran Dinh Long urged the government to streamline decision-making, enhance transparency in public procurement, and prioritise Vietnamese products. He explained that clearer and more responsive policies are crucial to helping local industries remain competitive amid international headwinds.

Reflecting on nearly three decades since Vietnam joined ASEAN, Hoa Phat Group chairman Tran Dinh Long said, “The steel sector has evolved from a peripheral player to a pillar of regional manufacturing. From an output of just over one million tonnes in 1995, Vietnam has become Southeast Asia’s largest steel producer and now ranks 11th globally, reflecting the strength of our industry as well as Vietnam’s success in economic integration.”

He called for faster and more decisive implementation of the Politburo’s Resolution No.68-NQ/TW on private-sector development, stressing that bureaucracy remains a brake on enterprise growth. “Time is life in business. Every delay means missed opportunities,” he said. “Enterprises need ministries and local authorities to respond faster and act with conviction.”

Long also warned that rising global protectionism is compounding challenges for Vietnamese exporters, citing the EU’s recent move to double steel import duties from 25 to 50 per cent. “This will hit our exports directly,” he said. “The government needs flexible, timely countermeasures to safeguard domestic production while keeping trade fair and rules-based.”

For state-funded projects, Long urged ministries and agencies to prioritise Vietnamese materials that meet technical standards, arguing that national procurement policies should directly support local manufacturing. “The message is simple: if Vietnamese producers can deliver, they should have the first chance,” he said. Transparent bidding and fair competition, he added, must guide all major public schemes, from social and worker housing to national infrastructure.

“Domestic enterprises have invested heavily in capacity and technology,” Long concluded. “We’re ready to drive the country’s development, but that requires a level playing field and clear, consistent rules.”

Hoa Phat’s recent performance underscores its leading position. In the third quarter of 2025, the group produced 2.8 million tonnes of crude steel, up 14 per cent on-quarter and 35 per cent on-year. Sales of hot-rolled coil (HRC), construction steel, high-quality steel and billets reached 2.5 million tonnes, an increase of 21 per cent compared to the same period last year.

Construction steel and rolled steel sales fell 17 per cent from the second quarter to just over one million tonnes, affected by the low building season and adverse weather. In contrast, HRC sales climbed 8 per cent from the previous quarter and 71 per cent on-year to over 1.2 million tonnes. September alone saw a record 477,000 tonnes sold.

Downstream HRC products also expanded steadily, with coated steel sheets reaching 120,000 tonnes and steel pipes 225,000 tonnes in the quarter.

Over the first nine months of 2025, Hoa Phat produced 7.9 million tonnes of crude steel, up 23 per cent on-year. Total steel sales reached 7.4 million tonnes, up 22 per cent, maintaining its 37 per cent market share in construction steel.

HRC output surged 51 per cent to 3.43 million tonnes, accounting for more than 56 per cent of Vietnam’s total, according to the Vietnam Steel Association. Coated steel output reached 320,000 tonnes (down 7 per cent), steel pipes 627,000 tonnes (up 25 per cent), and pre-stressed and wire-drawn steel 116,000 tonnes (up 25 per cent), with exports contributing 42 per cent.

The completion of blast furnaces No.1 and No.2 at the Hoa Phat Dung Quat 2 complex during the second and third quarters marked a strategic milestone. The fully operational project will significantly expand national HRC capacity, reinforcing Vietnam’s steel independence amid rising protectionism in global markets.

The MoC announced this finding at a meeting held on October 3 to review the nine-month performance and set tasks for the upcoming months.

The ministry has submitted and received approval from the prime minister for the plan to reduce 181 business investment conditions and simplify 12 more business investment conditions, exceeding the target set in Resolution No.66/NQ-CP.

The MoC’s meeting on October 3 in Hanoi. Photo: Ministry of Science and Technology

Minister of Construction Tran Hong Minh assessed that the work of building and perfecting institutions continues to be implemented strongly and effectively. The ministry focused on completing, submitting and having the National Assembly approve the Railway Law and six resolutions. It also had nine decrees, one resolution and 32 circulars issued.

They have many new contents, contributing to creating motivation for the country in investment and development of construction infrastructure, strengthen decentralisation, in accordance with the two-level local government model, reform and simplify administrative procedures and investment and business conditions.

However, Minister Minh pointed out that there are still many problems after the two-level local government model came into operation, such as provincial planning and urban planning. Therefore, the work of building institutions must be more substantial and truly creative to help remove obstacles and create conditions for people, localities, and businesses to thrive.

He also admitted that the application of science, technology and digital transformation in its agencies and units is still slow, not really meeting the requirements of the practical situation.

Minister Minh asked heads of units to focus on strictly implementing the tasks assigned in Notice No.372 dated September 16 and Notice No.425 dated September 30 on the development of standards and regulations.

Minister of Construction Tran Hong Minh chaired the meeting. Photo: Ministry of Science and Technology

The minister assigned the Department of Science, Technology, Environment, and Construction Materials and the Information Technology Centre to actively work with research facilities and enterprises to promote innovation and national digital transformation in the fields of construction and transport.

“Heads of units, especially specialised departments, need to closely coordinate with the Information Technology Centre to urgently build a construction industry database to ensure completion in 2025,” he directed.

The minister requested that in the last quarter of 2025, the Legal Department and agencies and units must organise the effective implementation of the strategic resolutions of the Politburo. At the same time, they should focus on completing legal documents and schemes to submit to the 13^th Party Central Committee Conference and the 10^th session of the 15^th National Assembly. These include the Aviation Law, Urban and Rural Planning Law, and Construction Law (amended) for consideration and approval; as well as 10 draft decrees in accordance with the plan.

MoC reviews progress and pushes plans to meet 2025 targets The Ministry of Construction held a critical mid-year evaluation on June 6, analysing the performance over the first five months of the year across all sectors and developing implementation roadmaps to hit 2025’s construction and housing development targets.

MoC could eliminate construction licensing procedures The Ministry of Construction (MoC) will assess the impact of eliminating construction licensing procedures to create better conditions for individuals and businesses.

Ministry of Construction updates draft Water Supply and Sewerage Law A comprehensive legal framework is being prepared for Vietnam’s water sector, with a new law on water supply and sewerage scheduled for completion in 2026.

Vietnam considers model on real estate transaction centre Vietnam is working on a pilot model of real estate and land use rights transaction centre to create a healthy and sustainable real estate market.

The global data centre sector continues to expand at around 15 per cent each year, Photo: Shutterstock

At the Vietnam Digital Infrastructure Development Forum held last week in Hanoi, Nguyen Thi Ngoc Dung, chief of office at the National Data Association, said that Vietnam is entering a decisive phase of its digital transformation and enactment of the Data Law and the Personal Data Protection Law marks a strategic step to turn data into national strength while ensuring security and ethics.

“Data is no longer simply the ‘new oil’ but has become the core means of production across every sector of the economy,” Dung said “We are committed to delivering on seven central missions, with three pillars in particular: standardising the national data architecture, developing technology platforms owned and controlled by Vietnamese entities, and building a high-quality workforce through the launch of the Global Data Expert Network.”

Dung pointed to several issues that could slow progress, ranging from digital and energy infrastructure to macro policy gaps, talent shortages, and a still-nascent data market.

“There will be turning points that determine our destiny. But with the Party’s leadership, and the will of businesses, experts, and people, we will reach the finish line: a Vietnam that masters digital infrastructure, strategic technologies, and its own data future,” Dung added.

Professor Ho Tu Bao of the Vietnam Institute for Advanced Study in Mathematics highlighted that Vietnam’s digital future rests on technology, data, and applications. He observed that progress has been most visible in technical infrastructure, especially in connectivity and hardware, yet the other pillars lag behind.

“Data infrastructure, while advancing with national data centres and sectoral databases, continues to face architectural bottlenecks that slow down integration and prevent the creation of a seamless ecosystem,” he said. “Application infrastructure remains the weakest link as it is still shallow, lacking depth, and not sufficiently tied to core technologies that could move Vietnam from surface-level adoption to genuine innovation.”

Enterprises, both domestic and international, are already responding. VNPT outlined its ambition to lead the way with 5G, the cloud, AI, and blockchain. CMC Telecom presented a dual approach such as CMC Cloud, a Vietnamese platform designed to reinforce digital sovereignty’ and CMC Comprehensive Security Platform, an AI-powered suite intended to shift enterprise defence from reactive to proactive.

Global corporations at last week’s event also offered strategies on AI infrastructure, proposed positioning Vietnam as ASEAN’s next AI hub, introduced Wi-Fi 6 GHz to bridge the digital divide, and highlighted stringent data security requirements for hyperscale data centres.

Behind these opportunities lies a critical question about sustainability. The global data centre sector continues to expand at around 15 per cent annually, yet demand is outpacing this growth. ABB forecasts that data centres already account for 1–2 per cent of global electricity consumption, potentially rising to 3–4 per cent by 2030. The sector also faces scrutiny for high water consumption, CO2 emissions, and e-waste.

Nguyen Xuan Hoa, global market director for Compact Substation Products at ABB said, “Sustainability across the data centre ecosystem is critically important. Data centres must balance energy efficiency and energy costs with growing demand, scalability, and uptime.”

ABB’s response places efficiency and design at the centre of sustainability. The company advises that using the newest and most energy-efficient equipment will support more sustainable operations. Its HiPerGuard MV UPS, for instance, achieves up to 98 per cent efficiency at loads from 50 to 100 per cent, is scalable up to 25MW, and has a 15-year design lifespan with up to 10 years between intrusive maintenance.

As of 2025, Vietnam counts over 80 million internet users. With the deployment rate of Internet Protocol 6.0 exceeding 60 per cent, the country ranks second in ASEAN and ninth globally.

According to the VNCDC 2024 Report, Vietnam’s cloud computing market reached $775 million in 2024, and is projected to grow to $1.24 billion in 2025 and double that by 2029.

In parallel, data centre capacity is making rapid strides, from 45MW in 2024 to an estimated 525MW in 2025 and nearly 1,000MW by 2030. Colocation service revenues are also expected to hit $1.4 billion by the end of the decade.