INGO Forum

The VUFO-NGO Resource Centre organises and hosts the quarterly INGO Forum Meeting, where international NGO representatives can discuss issues relevant to their work, share experiences and better coordinate common activities. The INGO Forum began as informal meetings of international NGOs in around 1990. The Resource Centre has acted as the secretariat for them since 1993.

The INGO Forum are also the mechanism for international NGOs to select representatives to serve on the Resource Centre Steering Committee, and to represent them at other forums such as the annual Consultative Group meeting of the Government of Vietnam and international donors.

INGO Forum 2010

INGO Forum 2009

Organisation of the INGO Forum

The NGO Resource Centre, as the secretariat for the INGO Forum, sets the agenda for each meeting in consultation with the Resource Centre Steering Committee, prepares and distributes minutes and other meeting documents, and follows up on discussions from meetings as required.

The INGO Forum is open to representatives of member organisations of the Resource Centre, who are notified by email. The Centre welcomes visitors wishing to attend or make presentations, but arrangements should be made in advance with the Centre. This meeting is, generally speaking, not an appropriate venue for private sector presentations or for those seeking employment opportunities.

For more information, please contact the Managing Co-Director of the VUFO-NGO Resource Centre.

INGO Forum Meetings

Click on the links below to read about INGO Forums.

INGO Forum Meetings 2005

Avian Influenza and Pandemic Preparedness briefing -17 October 2005

Presenters:
Dr. Peter Horby, Epidemiologist/Avian Influenza Response, World Health Organisation
Dr. Patrick Michaudel, Medical Director, International SOS

Meeting notes

Informal INGO Consultation on the draft Revised Regulations for Management and Utilisation of INGO Assistance - 13 October 2005

Background: The Ministry of Planning and Investment (MPI) has been collaborating with Government Agencies and VUFO to revise the existing regulations on the management and utilisation of the assistance from INGOs. They provided a copy of the draft Revised Regulations to the NGO Resource Centre, and requested us to give comments.

Copies of the draft Revised Regulations and our consolidated INGO comments are available from the NGO Resource Centre.

INGO Forum on pandemic preparedness in the context of avian influenza and other business - 30 September 2005

Topics included: introduction of newly arrived representatives; election for Steering Committee and Consultative Group representatives; an update and discussion on Avian influenza and pandemic preparedness; and an update on the Government plan to revise the legal framework for international NGOs.

Minutes

Software Freedom Day - 9 September 2005

On the occasion of international Software Freedom Day, the Resource Centre organised a special event in our new meeting room, giving NGOs in Vietnam with an opportunity to learn about useful computer software for NGOs running on Windows, Linux and Mac systems.

More than 40 people attended this event, where they were able to:

see demonstrations
ask questions to IT specialists (French, English and Vietnamese speakers)
try Free and Open Source Software on Windows, Linux, Mac
try programs designed specially for NGO needs
receive free CDs of free and open source (FOSS) software for Windows, linux distributions and software

Informal INGO Consultation on Vietnam's draft 5-Year Socio-Economic Development Plan 2006-2010 - 25 August 2005

More than 60 participants from over 30 INGOs participated in our informal INGO consultation on the draft Socio-Economic Development Plan 2006-2010 in late August. Based on this we prepared written contributions that were presented to the national consultation workshop
on the SEDP on 7-8 September, organised by MPI and World Bank.

For more information, please refer to our page on Vietnam's Socio-Economic Development Plan 2006-2010.

Briefing for International NGOs on the recent National Assembly session - 28 June 2005
Presenter: Mr. Vu Xuan Hong, National Assembly member and VUFO President

Meeting notes

Managing change: CIDSE's transformation to 2 Vietnamese development organisations - 16 June 2005

Presenters:
Mr. Frank de Caires, Country Representative, CIDSE
Ms. Tran Thi Chung, CIDSE / Community Development Cooperation (CDC)
Ms. Vu Thi Bich Hop, CIDSE / Livelihoods Upland Agriculture (LUA)
Mr. David Purnell, Country Director, World Vision

Meeting Notes

INGO Forum Meetings 2006

INGO Forum Meeting - 27 October 2006

This meeting had four main items:

Bill Tod, SNV, did a presentation on the VDR 2007 NGO-consultation process.
Andy Wehkamp, on behalf of the 4 INGO representatives at the CG-meeting 2006 did a short presentation about the meetings, and then oppened the floor for comments from the forum.
The Forum accepted the two candidates who had submitted text's for consideration for becoming INGO-representatives in Health Partnership Group and MARD-ISG respectively.
NGO RC Co-Director Trine Glue Doan Provided an update on news since last meeting in regards to PIT, Permits, Audits, Social Insurance and Decree 64.

Meeting minutes

Background documents

Minutes from PIT Meeting 16 October 2006

INGO Forum Meeting - 8 September 2006

Co-Director Trine Glue Doan, continue provided an update on subject of PIT and present some selection Group Guidelines and other activities relevant to GCAP and SEDP consultation.

Meeting minutes

INGO Forum Meeting - 23 June 2006

Co-Director, Trine Glue Doan, provided an update on what has happened since the last INGO forum meeting on 5 May 2006. As announced in an email to the Members, it was mentioned that PACCOM facilitated a meeting between COMINGO, INGOs, the General Department of Taxation, and MOF regarding Personal Income Tax issues on Tuesday 23 May 2006. The NGO RC will invite the selected INGO PIT group to a meeting in order to formulate a written statement from the INGO community and propose different possible strategies for moving ahead.

INGO Forum Meeting - 5 May 2006

This first INGO Forum of 2006 introduced the new Co-Director, Ms. Trine Glue Doan, to our Members. It was also an important opportunity for INGOs to comment on the National Programme for the Promotion of INGOs and provide collective feedback to PACCOM. Mr. Phong, from PACCOM, was present at the meeting and assured INGOs that their comments were highly valued.

A second issue discussed was the continued problems that INGOs are having with the tax authorities over the payment of PIT and the ensuing auditing of INGOs. Members selected a group of INGO representatives to attend discussions with PACCOM and the tax authorities in the coming weeks.

INGO Forum Meetings 2007

INGO Forum Meeting - Friday, February 28, 2008

“The Changing Development Context, Donors Presence, Aid Effectiveness
and INGOs”

Friday, February 28 from 15.00 – 17.00 hours,
218 Doi Can, La Thanh Hotel, Building. F1, Hanoi

Background:
Since Doi Moi, when Vietnam first began to introduce market reforms, the country has had a very impressive economic growth record, and the overall achievements in tackling poverty issues have been remarkable. The poverty rate has been dramatically reduced from 53 per cent in 1993 to below 19.6 per cent in 2006.

Continued high economic growth remains a top priority for the Government of Vietnam (GOV), the aim is to accelerate the annual GDP to between 8.5 to 9% in 2008 (Prime Ministers speech at Consultative Group Meeting in December 2007), and for Vietnam to become a middle-income country (MIC) by 2010, and industrialised country in 2020.

However, pockets of poverty throughout the country still present significant challenges, with higher rates occurring in the north-west and central highland region, where high concentrations of ethnic minority groups live. But also other and new groups of poor and vulnerable groups are faced with challenges including children, women, people with disabilities (PWD), people living with HIV and/or AIDS (PLWA), migrants, disaster-prone communities, and communities impacted by environmental pollution and degradation etc. Meanwhile, governance issues and environmental challenges are becoming increasingly critical in ensuring sustainable development.

It is likely that Vietnam will achieve it's goal of becoming a MIC by 2010, two years from now. This will lead to changes in the presence of donors and the ODA support to Vietnam. Sweden, is the first donor to have announced that it will enter into a phase out program from 2009 and beyond.

Meanwhile, donors and the GOV have been upscaling the aid effectiveness agenda in Vietnam during the past years through the Partnership Group on Aid Effectiveness (PGAE). These efforts resulted in the Hanoi Core Statement (HCS), a localised statement of the Paris Declaration,e ndorsed in 2005 by GOV and the donor community. The HCS was developed by the PGAE, and was endorsed at the Mid-term CG Meeting in 2005, and approved by the GOV in September 2005. The HCS comprises 28 Partnership Commitments, 14 indicators and 5 guiding principles, the HCS calls for changes in the behaviour of both donors and government towards aid effectiveness agenda.

The changes in the development context, donors presence, and the increasing GOV and donor aid effectiveness efforts raises a number of issues for INGOs, how will the focus and role of INGOs change, how will the funding for INGOs changes, and what how does aid effectiveness relate to INGOs.

Up to 2007, the INGO support to poverty reduction and development has continued to grow. In 2007, there were up to between 500-600 INGOs, implementing a variety of development programmes in all sectors and provinces of the country, with a total contribution of US$220 million (PACCOM figures). The total budget is expected to raise up further to US$250 in 2008.

Some INGOs have started to revise their strategies for Vietnam taking the changing context into consideration. Some INGOs and Vietnamese NGOs have started to pay increasing attention to the issue of aid effectiveness in general. This resulted in the establishment of the Aid Monitoring Group (AMG) in 20071.

However, the question of how aid effectiveness relates to INGOs is still to be discussed more broadly in the INGO community.

This INGO forum aims to address some of the issues and questions relating to “The Changing Development Context, Donors Presence, Aid Effectiveness and INGOs”

The meeting agenda:

1) NGO RC UPDATE - by the Co-Director(s)
UN-EU Cost Norms
PIT
INGO representatives to the Steering Committee

2) BEYOND 2010 – Perspectives on the Changing Development Context, Donor Presence, and relation between the World Bank and INGOs by Martin Rama, Lead Economist, World Bank Vietnam.
Followed by discussion on perspectives for changing donor presence and INGOs.

3) AID EFFECTIVENESS, Government, DONORs and INGOs – Introduction to the Partnership Group for Aid Effectiveness (PGAE), Government and Donor aid effectiveness efforts and preparations for the Third High Level Forum on Aid Effectiveness. (HLF 3), to be held in Accra, Ghana in September 2008 by Cao Manh Cuong (MPI), Coordinator for the PGAE.
Followed by discussion on perspectives for Aid Effectiveness and INGOs

4) AOB

INGO Forum Meeting - Friday, September 28

1. WELCOME – by the Managing Co-Director
2. DEVELOPMENT REPORTS & AID MONITORING

Briefing on the Aid Monitoring Group (AMG) initiative and the 'Consultation meeting on World Bank (WB) conditionality' organised by the AMG on September 12
Brief presentation of the 'Evaluation of NGO involvement in the Vietnam Development Report (VDR 2007) and Poverty Reduction Strategy Credits (PRSC 2006-10)'
NGO involvement in the Vietnam Development Report 2008 lead by the World Bank
NGO involvement in the Poverty Assessment 2008 carried out by VASS

3. NEW INGO REPRESENTATIVES for the STEERING COMMITTEE & to the CG MEETING

Formal confirmation of the new INGO representative candidates and self-introduction by them on their background and focus in the NGO RC Steering Committee and to the Consultative Group Meeting respectively.

4. AOB

Meeting minutes

INGO Forum Meeting - Friday, May 25

WELCOME – by Managing Co-Director Trine Glue Doan
ONE UN REFORM INITIATIVE – Introduction and progress update on One UN Reform Initiative, and perspectives for INGO relations with the UN, by UN Resident Coordinator Mr. John Hendra, followed by discussion.
MID-TERM CONSULTATIVE GROUP MEETING – discussion of INGO statements on this CG meeting's agenda including: Monitoring and Evaluation framework for the SEDP, Results of anti-corruption efforts, WTO, Off-track MDGs and emerging development challenges: water and sanitation, HIV/AIDS and Road Safety, and Aid Effectiveness/Harmonization.
CALL FOR INGO NOMINATIONS – call for INGO 2 nominations for the NGO Resource Centre Steering Committee
AOB

Meeting Minutes

Presentations

INGO Forum Meeting - Friday, March 2

NGO RC UPDATE: a. Briefing on the NGO RC plan for 2007 by Trine Glue Doan, including comments on options for funding b. INGO participation in the PRSC
AVIAN INFLUENZA UPDATE: UNDP's Avian Influenza Donor Coordination Specialist David Payne will provide an update on the AI Partnership Agreement, the AI Green Book and recent outbreaks.
GCAP VIETNAM: The Fatherland Front and the GCAP team will provide a brief on GCAP Vietnam 2006 and discuss plans for GCAP 2007, followed by a discussion of INGO involvement in GCAP 2007.

Meeting minutes

Background documents

INGO Forum Meetings 2008

INGO Forum Meeting on “Vietnam’s Macro-economic Turbulence” and "Consultation for the Mid-term Consultative Group Meeting”
Friday, May 30 from 15.00 – 17.00,
NGO Resource Centre, 218 Doi Can, La Thanh Hotel, Building. F1, Hanoi
Background
In extension of the February INGO Forum meeting, which focused on Vietnam's changing development context and the presence and aid effectiveness of donors and INGOs, the May INGO Forum meeting focussed on changes in Vietnam's macro-economic situation and the implications for Vietnam's future development. UNDP Senior Country Economist Jonathan Pincus made a presentation on 'Vietnam’s Macroeconomic Turbulence: Causes & Challenges,' which related to his contribution to the recent study: 'Choosing Success: The Lessons of East and Southeast Asia and Vietnam’s Future - A Policy Framework for Vietnam’s Socioeconomic Development, 2011-2020', under the Harvard University, Harvard Vietnam Program.

Following the presentation by Jonathan Pincus, there was a discussion relating to input for the INGO statements for this year's Mid-term CG meeting, including: recent socio-economic developments (macro-economic developments, revised plan priorities and impacts on poor and disadvantage people, including corruption, recent food price surge etc.), Vietnam Business Forum, climate change issues (national action plan, coordination across government etc.), and northern mountain provincial development and aid effectiveness. The draft ideas on INGO interventions were sent out to members on May 28.

The meeting finished with a brief update by the NGO RC on: i) the recent Member and User Survey; and ii) recent developments in relation to Personal Income Tax (PIT).

Agenda

SPECIAL PRESENTATION - Vietnam’s Macroeconomic Turbulence: Causes & Challenges
Jonathan Pincus, UNDP Senior Country Economis.
MID-TERM CONSULTATIVE GROUP MEETING – Discussion of INGO statements on this CG meeting's agenda including
NGO RC UPDATE
NGO RC SURVEY – Feedback on the survey recently conducted by the NGO RC and responses to recommendations and suggestions by members and users of the centre.
PERSONAL INCOME TAX (PIT) - Update on latest developments
AOB

INGO Forum Meeting - Friday, February 28, 2008
“The Changing Development Context, Donors Presence, Aid Effectiveness and INGOs”
Friday, February 28 from 15.00 – 17.00 hours, 218 Doi Can, La Thanh Hotel, Building. F1, Hanoi

Background
Since Doi Moi, when Vietnam first began to introduce market reforms, the country has had a very impressive economic growth record, and the overall achievements in tackling poverty issues have been remarkable. The poverty rate has been dramatically reduced from 53 per cent in 1993 to below 19.6 per cent in 2006.

However, the question of how aid effectiveness relates to INGOs is still to be discussed more broadly in the INGO community.

This INGO forum aims to address some of the issues and questions relating to “The Changing Development Context, Donors Presence, Aid Effectiveness and INGOs”

Meeting agenda
1) NGO RC UPDATE - by the Co-Director(s)

UN-EU Cost Norms
PIT
INGO representatives to the Steering Committee

4) AOB

INGO Forum Meetings 2009

INGO Forum Meeting - PIT Discussion

Friday, 11 December 2009, 09:00 – 11:00 am

Chairs:
Don Tuan Phong, PACCOM Director General
Marko Lovrekovic, VUFO-NGO Resource Centre Managing Co-Director

Venue:
VUFO-NGO Resource Centre Meeting Room
218 Doi Can, La Thanh Hotel, Building F1, Hanoi

The meeting was initiated following INGOs' questions regarding the letter which many of them received from the Hanoi Tax Department during November 2009. The letter requested lists of names of INGO expatriates eligible for Personal Income Tax (PIT) exemption. During the meeting Mr. Don Tuan Phong, Director General of PACCOM, provided clarification regarding some questions related to PIT exemption for INGOs' expatriates. However, he said that some questions can only be answered by competent tax authorities. Prior to the meeting Mr. Marko Lovrekovic, Managing Co-Director of VUFO-NGO Resource Centre, prepared a letter on behalf of the INGO community in Vietnam and sent it to the Hanoi Tax Department. Please find a copy of this letter at the bottom of the page. The VUFO-NGO Resource Centre will inform it members as soon as we receive any response from the Hanoi Tax Department.

In his introduction Mr. Phong briefed the participants on the latest discussions regarding the PIT exemption and relevant legislation. He emphasised that PACCOM has been working hard on the broader legal framework and PIT exemption. The Prime Minister has approved a new decree which will have clear provisions regarding PIT exemption. This decree has been approved by 16 members of the Cabinet (out of 32 members) to date. The Government should make the final decision before the end of 2009 and a new decree should come into force in early 2010. In the meantime, Mr. Phong clarified the current situation with respect to PIT exemption for the following categories:

REPRESENTATIVE OFFICE
Expatriate staff in INGOs that have 'Representative Office' status are eligible for PIT exemption provided that they have a PIT-Exemption-Clause included in their Memoranda of Understanding (MOUs) with the Committee for Foreign NGO Affairs (COMINGO). However, about 25 INGOs with 'Representative Office' status do not have a PIT-Exemption-Clause in their (old) MOUs, and about 10 have (new) MOUs pending. PACCOM will amend old MOUs (without the clause) and introduce the clause in all new pending MOUs early next year. In the meantime, COMINGO will send certification to the General Department of Taxation and Tax Offices in major cities for the period that is not covered in current MOUs. Mr. Phong promised to release this certification in the week of 14 - 20 December 2009.

PROJECT OFFICE
Long-term expatriate project specialists in INGOs that have 'Project Office' status are eligible for PIT exemption provided that their Terms of References (TORs) are included in the project documentation and approved by competent authorities. In most cases project documentation is approved at the provincial level by People's Committees but it can also be approved by ministries, departments, branches, central agencies and mass organisations. This kind of PIT exemption is defined by the Ministry of Finance's Circular 55 (from 2007). Please note that MOUs have never been signed with INGOs that have 'Project Office' status under the Decision 340 (from 1996). A new decree, which will replace the old Decision 340, will have clear provisions regarding PIT exemption and MOUs between COMINGO and both Representative Offices and Project Offices. However, it is not certain when this decree will come into force. Most probably it will come into force in February 2010. If the Ministry of Finance will insist on MOUs for 130 INGOs with 'Project Office' status in the next two months - COMINGO will issue a statement to the General Department of Taxation and Tax Offices in major cities, explaining that MOUs did not exist under the old Decision 340.

OPERATING PERMITS
Expatriate staff in INGOs that have 'operating permits' are not eligible for PIT exemption, unless they are classified as project specialists in the INGOs project documentation approved by competent authorities. Around 500 (out of 670 in total) INGOs working in Vietnam have 'operating permits'. However the intention of the new Decree 93, which replaced the old Decision 64 (from 2001), is that long-term INGOs with 'operating permits' become representative offices. It will also decentralise the project approval process and enable local and provincial authorities to approve 90% of projects. Please note that the Decree 93 will come into force on 1st January 2010. A hard copy of the Decree 93 in English is available for reading at the VUFO-NGO Resource Centre. PACCOM will provide an electronic version of the official translation, which will be shared with INGOs.

EXPATRIATE CONSULTANTS
Expatriate consultants are not eligible for PIT exemption. They are liable to pay PIT.

VOLUNTEERS
Volunteers with INGOs who are paid an allowance are not permanent staff members. Such INGOs should sign MOUs in order to make their volunteers eligible for PIT exemption. MOUs should be signed with competent authorities, such as a Government Ministry or the local People's Committee. Without MOUs volunteers are liable to pay PIT.

In closing Mr. Phong said that the new decrees will introduce change in terminology: INGOs will be 'registered' rather than 'receiving permits'. COMINGO will inform the Ministry of Finance about the position of INGOs regarding PIT and share other concerns regarding the issue. PACCOM, on behalf of INGOs, will meet with the Hanoi Tax Department and the Ministry of Finance to share INGOs' concerns. There will be a dissemination meeting for INGOs before Tet to share the achievements of the past year and plans for next year. Mr. Phong also announced that this year PACCOM celebrates its 20th anniversary.

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INGO Forum Meeting 13 November 2009

Friday, 13 November 2009, 14:00 – 16:30
Forty-nine individuals representing 35 organisations attended.

Chair:
Marko Lovrekovic, VUFO-NGO Resource Centre Managing Co-Director

Venue:
VUFO-NGO Resource Centre Meeting Room
La Thanh Hotel, Building F1, 218 Doi Can, Hanoi

Agenda:
1. Welcome and introduction
2. VUFO-NGO Resource Centre update on activities
3. Update on new decrees replacing Decree 340 and Decree 64
4. 2009 Salary Survey briefing
5. Five years of cooperation between PACCOM and INGOs
6. Key messages for Consultative Group meeting on 3-4 December 2009

1. Welcome and introduction

Marko Lovrekovic welcomed participants and announced that a representative of PACCOM was unable to join the meeting due to other commitments. Forty-nine participants from 35 organisations briefly introduced themselves.

2. VUFO-NGO Resource Centre update on activities

During the INGO Forum in May 2009 three major obstacles to normal functioning of the Centre were presented: a) old or non-existent technical resources; b) insufficient human resources; and c) insufficient financial resources. Of these the first two have been overcome. Technical resources have been fully upgraded, including computers, servers, printers and other office infrastructure. New team members have been recruited: Ethnic Minorities Working Group Coordinator, IT Advisor, Communications Advisor, two international volunteers, two Vietnamese volunteers, and a new part-time accountant. Also, there is a new face on the VUFO-NGO Resource Centre Steering Committee: Ms. Yasmin Subhash Madan, Country Representative for Population Services International, who replaced Mr. Dario Gentili from Voluntary Service Overseas. Dario has been transferred to another country program unexpectedly. However, there is still a way to go when it comes to the third obstacle before the Centre can enjoy sustainable financial resources.

Core Services have been carried out regularly including: 12 e-newsletters, management of 26 mailing lists, 25 Newsbrief service letters, update of the library with new titles and support for 44 meetings related to 17 active Working Groups. The content of the old website has now been fully transferred to the new website. The 2009 INGO Directory in Vietnamese was published and distribution is ongoing.

Some of the most significant activities carried out by the Working Groups were: finalisation of the Complementary Child Rights Report, preparation for the Climate Change Forum in the Mekong Delta, participation in several emergency meetings regarding typhoons Ketsana and Mirinae, a workshop on implementation of Phase 2 of Program 135 in close cooperation with the the Committee for Ethic Minorities Affairs (CEMA) and the Ministry of Labour, War Invalids and Social Affairs (MOLISA), the Annual Partnership Forum of 62 Districts, and comments and inputs for the Ministry of Health's (MoH) Circular 2009 on compulsory testing of HIV in necessary cases.

Ms. Tran Thi Thu Thuy from PACCOM was formally appointed to the position of Co-Director and continued a productive working relationship between the Resource Centre's team and PACCOM as a counterpart. The Centre also participated in the mid-year Dissemination of Information Meeting at PACCOM. Other activities included consolidation of inputs for INGOs’ participation at the mid-year Consultative Group meeting; and briefings of two foreign delegations from Ministries of Home Affairs in Laos and Bhutan. Both delegations were interested in the Centre as a mechanism for cooperation between INGOs and the Government. The Centre submitted the Vietnamese contribution to the 2009 Social Watch Report published by the Social Watch International Network. Preliminary discussions occurred regarding two new potential working groups: a) Capacity Development Working Group (working title), and b) Fair Trade Working Group. The Centre's work was promoted in two media reports – an interview for Thanh Nien and a short piece for Global Citizen, a new show on VTV3. The first coordination meeting between the Ministry of Health and INGOs took place in October. The International Support Group of the Ministry of Agriculture and Rural Development organised a conference to evaluate support for the Ministry of Agriculture and Rural Development from 1993 until 2008; and to discuss the plan for the period 2011-2015.

For more details on the VUFO-NGO Resource Centre's activities update, please scroll down to the bottom of this page and open the attachment titled INGO Forum November 2009 Presentation.

3. Update on new decrees replacing Decree 340 and Decree 64

In the absence of the PACCOM representative, Marko Lovrekovic informed the participants about the new decree that will replace Decree 64. The new decree has been finalised, but is not expected to come into effect before January 2010. The English-language translation is not yet available. Another decree that will replace Decree 340 has not been approved yet, but is expected to come into force in 2010.

A discussion followed regarding the issue of personal income tax (PIT) for expatriate INGO staff. Many INGOs had just received a letter from the Hanoi Tax Department, requesting that INGOs submit a list of expatriate INGO staff eligible for PIT exemption according to the criteria set out in a previous letter from the Ministry of Finance. The letter said that the Hanoi Taxation Department would assume there were no PIT-exempt expatriates if they did not receive a list by 30 November.

Several issues were raised among participants regarding PIT:

Staff whose salary is paid from abroad are exempt from personal income tax, but what is the tax status of staff whose salary or allowances are paid from project funds and not from a source abroad?
Foreign staff are exempt from paying income tax so long as their Memorandum of Understanding has an exemption clause. INGOs need to ensure that their next MOUs have that clause.
However, project offices don't have MOUs – could project office staff be exempted from income tax? What is the situation for staff where an INGO has not signed a new MOU yet?

These questions were not answered since PACCOM representative was not present. However, the Centre's Managing Co-Director committed to clarify all questions with PACCOM and inform INGOs before the 30th November deadline.

4. 2009 Salary Survey briefing

Marko Lovrekovic gave a preview of the 2009 Salary and Benefits Survey of National Staff in International NGOs, which has been completed but not yet published. For logistical reasons not all member organisations were invited to take part. Fifty were contacted , 40 agreed to take part, and 33 actually filled out the online survey.

However the 33 were a representative sample, and their combined budgets equalled approximately half of the combined budgets for all INGOs in Vietnam. Fifty-two per cent of participating INGOs have a budget of less than $US1 million; 33% have budgets between $US1million and $US10 million; while 15% have budgets of more than $US10 million. Thirty INGOs are Hanoi based and three are from Ho Chi Minh City. Due to such a small number of INGOs based outside Hanoi that participated in the survey there will be no comparison analysis based on their location. However, the reported salaries were very similar between the cities and - generally speaking - there was more consistency between INGOs in salary scales, benefits and working hours than in the 2004 Salary Survey. For more details about the 2009 Salary Survey, please scroll down to the bottom of this page and open the attachment titled 2009 Salary Survey Summary.

The full report on the 2009 Salary Survey will include detailed statistics on salary scales, annual leave, public holidays, sick leave and maternity leave, study leave and training opportunities, insurance and tax calculation, travel allowances, types of contracts, bonuses, working hours and overtime. In order to preserve confidentiality only hard copies of the report will be distributed to members free of charge. Non-members will be able to obtain a copy for a moderate fee.

5. Five years of cooperation between PACCOM and INGOs

PACCOM is planning to undertake a survey on their cooperation with INGOs during the past five years. A similar survey was undertaken in 2000-01 but Vietnam has experienced many rapid changes in the INGO sector since then. PACCOM envisages field trips taking place from December 2009; compiling information in spring 2010; and finalising the report, followed by a conference to present results of the survey in May 2010. PACCOM is seeking an expatriate volunteer to conduct the research. If you would like to read a report from the previous survey, please scroll down to the bottom of this page and open the attachment titled INGO Study 2000-2001.

6. Key messages for Consultative Group meeting on 3-4 December 2009

The Consultative Group meeting is the highest-level forum of the development sector in Vietnam, involving the Government of Vietnam at the ministerial level, international donors at the ambassadorial level and other relevant partners. There are two meetings each year: an informal CG meeting in June and a formal one in December. The VUFO-NGO Resource Centre facilitates representation of international NGOs in close cooperation with four democratically elected INGO representatives. This is a unique opportunity for the INGO community to raise concerns and put important issues on the agenda. The following CG representatives from the INGO community will attend the Consultative Group meeting together with the VUFO-NGO Resource Centre's Managing Co-Director:

Ms. Ninh Ngoc Bao Kim (Country Representative at Asia Foundation)
Mr. Phan Van Ngoc (Country Director at ActionAid)
Mr. Steve Price-Thomas (Country Director at Oxfam Great Britain)
Mr. Peter Newsum (Country Director at CARE International)

The meeting broke up into four working groups to discuss key messages under four broad themes from the Consultative Group meeting agenda. For the preliminary recommendations and key messages, please scroll down to the bottom of this page and open the attachment titled Key Messages for INGO Statement 2009. Please note that the conclusions will be used by the four CG representatives; combined with inputs from various Working Groups and consolidated into the INGO Statement report, which will be shared with all participants at the Consultative Group meeting on 3-4 December 2009.

The Forum closed at 16:30 hours.
Forty-nine individuals representing 35 organisations attended.

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INGO Forum Meeting 22 May 2009

Friday, 22 May 2009, 14:00 – 17:00

Chairs:
Don Tuan Phong, VUFO-NGO Resource Centre Co-Director (PACCOM)
Marko Lovrekovic, VUFO-NGO Resource Centre Managing Co-Director

Venue:
VUFO-NGO Resource Centre Meeting Room
218 Doi Can, La Thanh Hotel, Building F1, Hanoi

Agenda:
1. Welcome and Introduction
2. VUFO-NGO Resource Centre Activities Update
3. New Decree on Foreign NGOs Registration and Operation in Vietnam
4. New Consultative Group Representatives
5. New Steering Committee Member
6. Mid-Term Consultative Group Meeting Preparation

1. Welcome and Introduction

Mr. Don Tuan Phong, the Resource Centre's Co-Director from PACCOM introduced the new Managing Co-Director Mr. Marko Lovrekovic (MCD), who talked about his background and professional experience. Marko comes from Croatia, having spent the last 10 years of his career managing country programmes in the Balkans (Croatia, Bosnia, Kosovo, Macedonia) for several INGOs (Catholic Relief Services, International Rescue Committee, Search for Common Ground and Danish Refugee Council). He moved in Hanoi last year and spent time travelling around the country, learning its culture and getting to know the people of Vietnam.

2. VUFO-NGO Resource Centre Activities Update

MCD reported on the activities since the last INGO Forum in November 2008, the current situation in the Resource Centre and plans for 2009. The former MCD Ms. Trine Glue Doan resigned in October 2008. Although she remained actively involved in resolving many issues until the end of 2008 -and partially after this date- there has been a significant gap in leadership between January and April 2009. Most core functions of the Resource Centre have continued, but the lack of MCD delayed a number of activities, postponed some projects and affected the quality of services.

Core Services have been carried out according to the schedule: e-newsletter, mailing lists, Newsbrief, INGO Directory distribution (in English), upgrade of the website (still ongoing), election of the new Steering Committee member, election of the representatives for the Consultative Group (CG) meeting and facilitation of 14 active Working Groups (WG).

Other Activities during the reporting period included submission of the INGO Statement at the End-Year CG meeting in December 2008; publishing and distribution of the report 'Forms of Engagement Between State Agencies and Civil Society' (in English); active involvement in activities of the People’s Participation WG, and submission of a letter to the Ministry of Finance regarding Personal Income Tax (PIT) exemption on behalf of INGOs.

Current Activities include a number of initiatives which have been idle for a while or delayed, such as distribution of the INGO Directory in Vietnamese, consolidation of the library, inactivity of four WGs, finalizing of the 'Complementary Report on Convention on Rights of the Child' (CRC), launching of the new INGO Salary Survey, contribution for the Social Watch Report 2009, publishing of the Vietnamese version of the 'Forms of Engagement Between State Agencies and Civil Society' report, a follow-up stakeholders' workshop for policy recommendations, revision of the new draft 'Decree on Foreign NGOs Registration and Operation in Vietnam', preparing inputs for the Mid-Term CG meeting, and developing Budget and Work Plan for 2009.

Current Obstacles to the efficient functioning of the Resource Centre may have been caused by the lack of clarity when it comes to the Resource Centre's mission and main objectives. We need to step back and reflect on the importance of the Resource Centre's initial 'core' functions in comparison to its involvement in advocacy and policy dialogue. There are discrepancies between available resources and desired goals. In order to achieve long-term goals, the Resource Centre has to improve Human Resources management; start planning on replacing international volunteers with permanent local staff; adjust inadequate salary scales; upgrade the essential equipment; secure sustainable funding through increased membership fees; and identify alternative funding sources.

MCD suggested immediate steps and long-term actions, which will be implemented after consultations and discussions with the Steering Committee. Mr. Don Tuan Phong supported MCD's suggestions and emphasized the importance of strategic planning and necessity for quick action. For more details on MCD's update please refer to the following link:

VUFO-NGO Resource Centre Activities Update November 2008 - May 2009

3. New Decree on Foreign NGOs Registration and Operation in Vietnam

Mr. Don Tuan Phong introduced Ms. Nguyen Thi Thanh Huong, Second Secretary at the office of the Prime Minister (PM) and thanked her for joining the Forum. Ms. Nguyen was invited to hear INGOs' comments and convey the main INGO's points to the Government.

Mr. Don Tuan Phong briefed the Forum's participants on the drafting process of the new decree. PM has tasked the Committee for Foreign Non-Governmental Organization Affairs (COMINGO) to draft a decree. First consultations with INGOs started two years ago and were followed by a more wider general review. It was decided that only non-government organisations and institutions will be involved in the consultations process - not the individuals. The new decree will replace the previous regulation from 1996. All relevant Government offices and ministries are involved in the process, including MOF, MPI, MOHA, MOPS and MOJ. There are 15 members of the Drafting Committee, representing different departments and expressing different points of view. It took nearly a year for the Drafting Committee to reach consensus on the latest (fourth) draft. At the moment, the decree consists of 6 chapters and 32 articles covering different aspects of INGOs' operations. This is the INGOs' last opportunity to provide input before the draft is finalized. It will be submitted to the Government in mid-June 2009 and it is expected that the Government will respond within 2-4 weeks upon submission.

New Key Points in the decree include a concept of 'registration' instead of 'permit' and 'licence'. The procedure for INGOs' registration or extension will be simpler and faster. The current 'permit for operations' is valid for one year, while the proposed 'registration' will allow up to three years of operations. 'Project office' will be changed into 'regional office'. The new proposed maximum for operations of 'representative office' will be five years. The extended period of 'registration' validity will reduce PACCOM's workload; improve the quality of work and efficiency.

Support from the Ministry of Finance (MOF) regarding Personal Income Tax Exemption has improved. The new decree has a separate article proposing the exemption status for INGO expatriates. So far, there were no strong objections to this proposal. PACCOM anticipates three possible scenarios: a) MOF and PM office may agree with the article fully and immediately; b) MOF and PM may decide to take the proposal into further consideration, including some changes; c) MOF and PM may reject the proposal, but agree to consider it later. Overall, it appears that the perception of many officials in concerned ministries has changed in favour of INGOs. However, there are no guarantees that the decree will be approved in its current form. We have to wait and see.

The Consultation Process regarding the new decree has been done in two ways: a) in direct consultations with relevant people; b) through written comments. The draft document was posted on the website; people could read it and submit comments. So far, PACCOM received comments from 20 different organisations, including Oxfam GB, Oxfam Belgium, Oxfam Quebec, Oxfam Hong Kong, Oxfam Australia, Oxfam USA, TDH, ADRA and others. The deadline for comments expired on May 2, however, INGOs were encouraged to send final comments next week.

Comments, Questions and Answers:

What are the next steps in the process? What is the timetable? How likely is that the key parts of the decree will remain unchanged? What else INGOs can do to help the process? The Drafting Committee has reached the final stage of the process. Following these last consultations, the Drafting Committee will incorporate INGOs comments and invite relevant ministries to provide their final feedback. That will include Ministry of Justice and up to 10 other ministries, represented through the Drafting Committee. The final draft will be submitted to the Government for consideration.

Is it possible for PACCOM to encourage new INGOs to apply for membership with the VUFO-NGO Resource Centre when they register with PACCOM? The VUFO-NGO Resource Centre is membership-based, for those INGOs who share the same vision, mission and objectives. The membership is voluntary and INGOs are free to decide on their membership, based on the scope and quality of services provided.

Who will be responsible for drafting a guiding circular of the new decree? The competent authority, as stipulated in Article 18, is COMINGO.

How sufficient is PACCOM's capacity to implement the new decree when it gets approved? Is there enough capacity and Human Resources to implement all stipulations of the new decree within deadlines? PACCOM will not be in a position to make decisions on each individual case. Some cases will depend on many relevant ministries and their capacity. When the new decree gets approved, especially the article about extended period of 'registration' - PACCOM will have reduced workload and more time to deal with individual cases, thus improving the efficiency and quality of work.

Article 4: Clarification of 'profit making' and 'religious' activities? The question of 'profit making' is a complex issue and the Drafting Committee already received a number of questions regarding this article. There will be further discussion within the Drafting Committee and more clarification will be provided in the final document. The same applies for 'religious activities'. For example, religious organisations are welcome to work on any aspect of humanitarian aid and non-profit development, but the decree will not support missionary activities.

Article 8: Distinction between 'regional office' , 'sub-office in provinces' and 'area office'? Definition of a long-term commitments and long-term plans? The term 'regional office' is used temporarily. We understand that it may be confused with 'regional' as in 'South-East Asia Regional Office' which is not intended. It has the same meaning like the previous 'project office' or 'programme management office' which run projects in locality. INGOs are invited to suggest new creative and descriptive terms. As for the definition of long-term commitment, three years of 'registration' was a maximum in the past. The Drafting Committee would like to extend that period to five years, which is considered 'mid-term' by several ministries.

Article 17: When INGO decides to voluntary terminate operations, how can they provide financial and audit reports 60 days prior to the termination? These reports are usually finalized after the termination? Normally INGOs know when they will leave and plan for it. Financial reports and audit reports must be done regularly. This question will be further discussed with the Drafting Committee.

Article 22: What is new regarding the office rent? It should not be considered new that 'registered' INGOs become entitled to rent an office. However, in the past some INGOs opened offices even without being 'registered'. We would like to emphasize that those INGOs who want to have an office must formalize their status.

Article 24: VAT exemption in relation to imported goods and commodities? Imported goods and commodities under the INGOs' registered and approved projects or programmes may become eligible for retroactive VAT reimbursement.

Article 25: What will be distinction between consultants; permanent full-time staff; and permanent part-time staff? Especially in terms of PIT exemption? In the current 'permits' for Project Office and Representative Office, the maximum number of staff (including expatriate staff) is limited for each organization. In the new 'registration' there will be equivalent limit for the total number of staff. It is at INGOs' discretion to decide who will be employed as permanent staff within this number. Since INGO are employing and paying salaries they can define working hours for its permanent staff. However, the total number of permanent expatriate staff (which is eligible for PIT exemption) must not exceed the approved maximum. The consultants who are contracted for particular assignments over limited periods will not be eligible for PIT exemption. INGO may decided to employ these people as permanent staff, but this will count towards the INGOs approved 'expatriate quota'.

Mr. Don Tuan Phong concluded the session and expressed his thanks to everyone who asked questions or provided comments. He noted that INGOs still have a few days to comment.

4. New Consultative Group Representatives

Although the deadline for nominations and expressions of interest for the new INGO Representatives at the CG meeting has been extended, the Resource Centre received only two expressions of interest: Steve Price Thomas (Oxfam) and Peter Newsum (CARE). Considering the fact that only two representatives were needed and only two candidates were available, the Steering Committee decided that there was no need for voting. MCD announced that Mr. Steve Price Thomas is re-elected INGO Representative and Mr. Peter Newsum is newly elected INGO Representative at the Consultative Group Meeting.

5. New Steering Committee Member

The Resource Centre received a total of 18 electronic votes for the new Steering Committee member prior to the Forum. Forty five participants from 33 organizations arrived to attend the Forum. They were given voting forms during the Forum and those participants whose organizations have not voted earlier were able to give their vote. After the counting, MCD announced the final result: Mr. Dario Gentili from Voluntary Service Overseas is the new member of the VUFO-NGO Resource Centre's Steering Committee.

6. Mid-Term Consultative Group Meeting Preparation

Mr. Steve Price-Thomas from Oxfam GB was invited to chair the session. He explained that the Consultative Group meeting serves as a forum for discussion between the Vietnamese Government and donor agencies on development policies and donor pledges. There are two meetings every year: an informal meeting in June and a formal one in December. Steve explained the mechanisms for discussion and the protocol during the meeting. INGOs have four representatives who share only one seat at the meeting. They usually divide different sessions of the meeting between them and put their comments forward when relevant. The VUFO-NGO Resource Centre's MCD is also present at the meeting. The agenda for this year's mid-term CG meeting includes the following:

1. Assessment of the Macroeconomic Situation;
2. Social Impact of Economic Slowdown and Policy Response;
3. Governance and Anti-Corruption;
4. Climate Change - Adaptation and Mitigation;
5. Harmonization and Aid Effectiveness.

The participants at the Forum were asked to split into five groups; each group discussed a different theme from the above agenda; and they prepared short statements regarding the themes which will be delivered by the CG representatives at the Mid-Term CG meeting. In addition, relevant working groups and INGOs have been asked to provide input for the Mid-Term CG meeting prior to the Forum. The CG representatives will communicate directly with these people and consolidate messages to be delivered at the Mid-Term CG meeting. INGOs with additional comments may contact MCD directly and provide their input.

The Forum closed at 17:00 hours.

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Attachment
INGO_Forum_November_2009_Presentation.pdf
2009_Salary_Survey_Summary.pdf
INGO_Study_2000-2001.pdf
Key_Messages_for_INGO_Statement_2009.pdf
letter_to_tax_office_-_pit_clarification_eng.pdf

INGO Forum Meetings 2010

INGO Forum Meeting

Friday, November 26, 2010, 15:00 - 17:00 hours

Venue: VUFO-NGO Resource Centre meeting room

Read the minutes of the meeting.

Read the presentation Health Partnership Group and 5-Year Health Plan by Ton van der Velden, Pathfinder International.

INGO Forum Meeting - Financial Situation and Next Steps

Thursday, 22 April 2010, 15:00 – 17:00 hours

Chairs:

Don Tuan Phong, PACCOM Director General (from 15:30)

Marko Lovrekovic, VUFO-NGO Resource Centre Managing Co-Director

Diana Measham, Country Representative, PACT Vietnam

Venue:

Meeting Room 3

La Thanh Hotel, 218 Doi Can, Hanoi

51 individuals from 46 organisations attended the meeting

1. Strategic discussion on the VUFO-NGO Resource Centre's future

Marko Lovrekovic briefed participants on the financial situation of the Centre, referring to a PowerPoint presentation. The main points were:

The NGO Resource Centre has been experiencing a financial deficit – to various degrees – since its establishment in 1993. The current ‘crisis’ came about when the bank balance of the Centre dropped to less than US$10,000 as a result of several different factors. However the ‘crisis’ is not really a crisis in the sense of being a one-off situation; it has only revealed an underlying problem of insufficient income from membership fees. These have only ever covered between 30% and 80% of operating expenses, depending on the year, but never the full cost of operations. Historically, these deficits were covered by donations from individual members and through financial support from multi-lateral donors.

The problem of a permanent budget deficit has been dealt with on a year-by-year basis, sometimes in the past by tapping into a surplus of funds, which had remained from an initial generous financial donation at the time the Centre was established. Additional income was secured sporadically from development agencies, through projects involving deliverables that have themselves always put a strain on the Centre’s limited human resources and have removed the focus away from the Centre’s core services – rather than enabling the staff to improve and to expand core activities for the benefit of all INGO members.

The short-term nature of this approach made a negative impact in 2009. This was worsened by the impact of the Global Financial Crisis on the Centre and all its members. Several other factors further influenced the financial health of the Centre, including: the long gap in leadership before the new director was hired; a decrease in the number of members; an abrupt reduction in financial support from external donors and supporters due to the Global Financial Crisis (e.g. the Ford Foundation closed its office in Vietnam); operating cost of the Centre increased. Together, these exhausted the remaining surplus of funds.

The only permanent solution for securing sustainable operations of the Centre was to introduce fees that will support 90% of the operating expenses - in contrast to the current 50% support - and this was decided by the Steering Committee on 15 April 2010. The remaining 10% will be covered by introducing charges for advertising on the Centre's website for non-members. Before the new membership fees structure comes into force and the new practice of charging non-members is implemented, there was an immediate need for ‘emergency funding’ that would bridge the gap during the ‘crisis’ - hence the request sent to all members for financial assistance. At the same time the Centre is continuing its fundraising efforts and working on recruiting new INGO members.

Members have responded generously to the request for emergency funding and so far have made grants totaling US$12,000.

However, beyond the short term, if the financial situation does not improve the following services will be at risk: maintenance of the NGO Resource Centre’s website (jobs, events, news, downloads); facilitation of 17 sectoral working groups; moderation of 28 mailing lists (with over 9,000 subscribers); publishing of the annual INGO Directory; finalisation of a new online INGO database; regular INGO Forum meetings; dialogues with the People’s Aid Coordinating Committee (PACCOM) regarding the policies and legislative issues that affect all INGOs operating in Vietnam; the library, several publications; representation at the Consultative Group meetings; participation in other development forums in Vietnam; connection with regional and global networks; and other ongoing support to over 100 INGO members.

Discussion, Questions and Answers:

Mr Phong from PACCOM said that since its inception the VUFO-NGO Resource Centre had been a crucial vehicle for INGOs and UN partners, collecting and sharing information and practices, linking government agencies with INGOs. PACCOM's position was that the Resource Centre should be maintained and supported, and that in future it may serve not only INGOs, but also government agencies, local NGOs and multilateral organisations. Suggestions from PACCOM were:

encouragement is needed from the Resource Centre and PACCOM for more INGOs to join. Currently 103 out of 700 active INGOs are members. PACCOM will share its list of all INGOs in Vietnam with the NGO Resource Centre, as it does every year;
In the past the NGO Resource Centre received extra core funding from some NGOs, and this needs to be encouraged. PACCOM will encourage NGOs to provide extra funding;
PACCOM supports the increase in membership fees;
Expatriate staff wages take up a large part of annual expenses. Maybe in future there should be more options for volunteer work, even in management positions;
PACCOM can contribute to costs, such as publication of the INGO Directory, and some other publications. PACCOM is limited by regulations from contributing to the cost of expatriate staff;
PACCOM also has office space available for the NGO Resource Centre to relocate to. However INGO staff may not be pleased to visit the centre if it is based at PACCOM. There may also be a perception of less freedom if the Resource Centre is located in an official Vietnamese institution. This issue will be further discussed;
PACCOM can also offer many facilities free of charge to INGOs;

Comments from INGOs included:

The new fees are reasonable, but while volunteer staff can be considered there is also a need for full-time staff. It may be feasible to include in INGO grant requests to donors a line item for a small percentage of the grant for the operations of the NGO Resource Centre;
Several INGOs expressed the view that the new fees were fair. One small INGO said it would be difficult for her organisation to pay the increase;
The new fees need to be expressed in more categories, depending on INGO budgets;
Currently there is little difference between services to members and non-members. Services should be offered to members only, to encourage others to join;
A clear fees scale is needed for new members - more work needs to be done on this before it can be implemented. On the new scales large INGOs are not paying much more than small INGOs, but proportionately have much bigger budgets;
Money could be saved by not printing the INGO Directory, and providing a PDF version that can be individually printed off. There could be a charge for advertising on the website, and for displaying an INGO's logo on the website. Were large NGOs consulted about the new $1500 annual fee - large NGOs are happy to support the Resource Centre, but only up to a point;
Consider sponsorships - paying a higher amount in return for sponsorship recognition;
The Health Partnerships Group is talking about starting working groups. These working groups could be merged with the Resource Centre's;
Also needed is a category for UN agencies to pay - they are heavily involved in the working groups;
Two INGOs said they had not been contacted in several years about paying fees;
The Resource Centre is a public good, but there is a need to restructure the organisation. A small proposal for $200,000 could be used to build the base on a solid footing, by bringing in a consultant, with the help of donors;
The centre is certainly a public good for which there is no incentive to pay, but its important to find the right balance for payment for services. Many of the services offered for free create information that is also valuable for members, such as the Opportunities mailing list. There is a need to find a balance between what we charge for and what we lose access to if we do charge, such as information about events and job vacancies;
The Steering Committee is considering branding, and with more sustainable funding can move in the direction of advertising and sponsorship;
The Resource Centre is already very effective in using volunteer staff, but also needs professional full-time staff. Because of the financial situation Marko Lovrekovic is now himself volunteering his services as Co-Managing Director until the situation becomes more sustainable;

Comments from Marko Lovrekovic

The Resource Centre is small and does not have the time at present to pro-actively recruit new INGO members. However most of the larger INGOs are already members;
The new fees are based on budgets in the existing list, which are now five years out of date;
Regarding Health Partnerships Group working groups, it is up to individual working groups to decide what they do. They are established by INGOs with support from the Resource Centre, but the Resource Centre doesn't tell them what to do. The Centre will strongly support the new Health Working Group;

2. Update on Personal Income Tax (PIT), new decrees and legislative changes by PACCOM (People's Aid Coordinating Committee)

The new decree on INGOs in Vietnam, which will replace Decision 340 from 1996 is still under consideration by the Ministry of Foreign Affairs.

The Ministry of Planning and Investment has issued Circular 7, which will guide the implementation of the new Decree 64, which regulates foreign aid in Vietnam and came into force in January 2010. Decree 64 affects INGOs indirectly and one of the changes in foreign aid regulation is that the authority to approve INGO projects has been decentralised in 95% of cases to the ministerial or provincial level, rather than requiring approval by the Prime Minister, as was the case before. Ministries and provinces will be able to approve any projects up to any value, except for: a) projects involving imported goods such as cars; b) projects with religious, security or national defence aspects. These will still require approval by the Prime Minister. The new decree may be accessed online at the Ministry of Planning and Investment's website.

Personal Income Tax - Expatriate staff working in Representative Offices of INGOs are exempted from paying PIT if they are paid from funds raised outside Vietnam and if this privilege is included in the memorandum of understanding (MOU) between the INGO and the Vietnamese Government;

PACCOM has the authority to amend any MOU that doesn't yet include a clause on PIT exemption.

The Government has for 20 years signed MOUs with INGOs that have Representative Offices, but not with INGOs with Project Offices in Vietnam. There is no authorisation yet for MOUs with Project Offices. Staff in Project Offices are exempt from PIT only if the clause on exemption is included in their terms of reference.

Regarding the letter sent to INGOs last year from the Hanoi Tax Department, the Prime Minister has made a statement that INGOs who are eligible for PIT exemption have maintained their exemption both before and after 1 January 2009. PACCOM will make available to INGOs this statement from the Prime Minister.

Discussion arising from Mr Phong's presentation

INGOs asked if the letter sent to INGOs in August 2009 still applied. The letter said that for staff to be exempt from paying PIT, it must be proven that the funds came from outside Vietnam. The INGOs said that most INGOs were funded from project money, even though the funding came from overseas, and the letter said that project staff were not exempt from PIT.
Mr Phong said that August letter was accurate and that project staff were not exempt from PIT.

INGOs said that the legal definition of a project is an agreement signed between the Vietnamese government and an INGO. So if a project is not part of such an agreement then legally it is not a project.
Mr Phong agreed that this was the case.

INGOs asked about the definition of locally raised funds - for example if an INGO gave money raised externally to an organisation within Vietnam - would the funds now be considered local funds.
Mr Phong said that the money granted to the second organisation would still be considered to have been sourced outside. Outside money included funds raised from foreign institutions operating in Vietnam.

INGOs asked that if a foreign company operating in Vietnam made a grant, would this be considered local funds?
Mr Phong said that money from a foreign company operating in Vietnam would be considered to be sourced from outside. He directed INGOs to a Ministry of Finance circular guiding financial management that arose form Decree 93.
INGOs asked when Mr Phong expected that the Prime Minister might sign the new decree replacing Decision 340.
Mr Phong said there were three scenarios:

1. If everything moved quickly the decree would be signed by July 2010
2. If the current situation continued, the decree would be signed in September or October 2010
3. Past experience showed that the decree might not be signed until after the next congress of the Communist Party of Vietnam in 2011

The forum closed at 17:30 hrs

Attachment
ingo_forum_april_2010_summary.pdf
ingo_forum_april_2010_presentation.pdf