Local firms complain about tax refund delays

By Van Pham   November 27, 2019 | 05:00 pm PT
A recent conference on tax policies and procedures in Hanoi saw many complaints from businesses about tax policies.

Do Anh Tuan, General Director of Vinahankook Medical Equipment Joint Stock Company (Vinahankook), said tax authorities’ failure to pay VND12.5 billion ($543,000) in value added tax has brought his business to a standstill.

Tuan claimed his company, which manufactures medical equipment, has not received VAT refunds for long.

The VAT rate for the kind of products his company makes is 5 percent, and it had always used to receive tax refunds. But after Circular 130 was issued by the Ministry of Finance in August 2016 to guide a number of articles in the laws governing value-added tax, special consumption tax and tax administration, Vinahankook was no longer entitled to refunds due to its "failure to meet export conditions," he said.

"Vinahankook's chartered capital is VND55 billion ($2.39 million). So the unpaid VAT refund accounts for 22 percent of the charter capital. This delay has brought the business to a standstill making it unable to attract more investment."

Nguyen Quoc Hung, deputy head of the Ministry of Finance’s tax policy department, said unpaid tax refunds are a problem not only for Vinahankook but also for many other companies.

An official from the General Department of Taxation said: "Currently VAT refunds only apply to exporters and investment projects. The Ministry of Finance has studied and proposed a change to higher authorities."

Of the more than 400 enterprises represented at the conference, most shared problems in fulfilling tax obligations. Some claimed that different branches of the tax office require businesses to submit different types of declarations and documents for the same procedures.

An executive from Vard Vung Tau Co., Ltd., which involves designing and shipbuilding of offshore and specialized vessels, proposed that authorities should consider scrapping sub-licenses for goods imported for processing. "It will help create an open business environment and improve enterprises' competitiveness in the international market."

More than 400 enterprises attended the tax conference.

More than 400 enterprises attended the tax conference.

Hoang Quang Phong, Vice President of the Vietnam Chamber of Commerce and Industry (VCCI), said taxes and customs compliance are extremely important for the production and business, for the government’s revenues and for creating an open and favorable business environment.

According to an assessment of reforms in tax administrative and business satisfaction in 2019 released by VCCI on November 18, Vietnam's tax regime is still complicated. The problem businesses complain about the most is that many tax policy documents are difficult to understand. Besides, tax policies are constantly changed, and if businesses do not follow them closely they would not be able to adapt to new policies in time.

The constant changes in policies are time-consuming and costly since it means additional costs for legal advice, software upgrades and printing new forms. Enterprises also face the risk of being penalized for not fully understanding the changes in tax policies and procedures, it added.

go to top