A representative of the province has recently revealed the possibility of the loss of VND3 trillion in local budget revenue because of the decrease in Thaco sales.
The 100% Vietnamese-owned automobile manufacturers in the first months of the year sold 5,000 cars monthly, but sales have dropped to 3,000 since March.
Meanwhile, analysts warned that sales would continue decreasing towards the end of the year, because buyers tend to delay their purchase plans, hoping that the car prices would be decreasing after January 1, 2018, when Vietnam cuts the import tariff from ASEAN under the framework of AFTA.
As car sales declined, the profit made by Thaco also decreased and the automobile manufacturer only paid VND6.7 trillion in tax in the first half of 2017, equal to 70% of the plan (VND9.6 trillion).
The representative said though the local taxation agency has been trying ways to offset the decrease in the tax payment from Thaco and cut expenditures, the local budget will still lack VND1.6 trillion.
In 2016, the local budget revenue was VND19.45 trillion, of which Thaco alone paid VND14.5 trillion, or 74.6%.
Quang Nam is not the only province which has a local budget heavily dependent on several large conglomerates.
In 2016, Ninh Binh provincial budget revenue reached VND6.6 trillion, the highest so far. Dinh Van Dien, chair of Ninh Binh, stressed that Hyundai Thanh Cong made a big contribution to the budget revenue.
Since its establishment in 2007, Hyundai Thanh Cong has always been among the top taxpayers in the locality. The automobile manufacturer located in Gian Khau Industrial Zone has created 8,000 jobs and paid VND7 trillion to the state budget.
Analysts commented that Thaco and Hyundai Thanh Cong can show the power of private Vietnamese conglomerates.
Pham Chi Lan, an economist, commented that the private sector has been operating effectively, with an impact on the economy. Vingoup, Vinamilk, Masan and Thaco were the companies cited by Lan.
“This is the way private economic groups develop. Vietnam really needs such conglomerates,” she commented.
According to GSO, in 2005-2015, the private sector made a big leap with turnover soaring form VND343.883 trillion in 2005 to VND1,202 trillion.
Meanwhile, Vietnam Report 2016 showed that private businesses made up 30% of VND90 trillion of tax paid by the 1,000 biggest taxpayers.