Vietnam’s power monopoly evades $85 mln tax bill by declaring false income: inspectors

By Thanh Lan, Hoai Thu   December 29, 2017 | 04:41 pm GMT+7
Vietnam’s power monopoly evades $85 mln tax bill by declaring false income: inspectors
EVN, which also invests in power facilities, finance and labor training, often claims losses when asking for permission to raise prices. Photo by Reuters

Vietnam Electricity failed to list massive profits made on the forex market.

Vietnam’s finance ministry is demanding more than VND1.9 trillion ($85 million) in tax arrears from the state-owned Vietnam Electricity after inspectors discovered the monopoly had been falsely reporting its costs and profits.

The company, better known as EVN, failed to declare a profit of more than VND4.8 trillion ($213.7 million) it made on the forex market in 2016, the ministry’s inspection found.

It also listed a $60 million pipeline project in its 2015 expenses, despite the fact the trade ministry had instructed the company to divide the cost over at least two years.

The ministry said the cost allocation has affected power prices, without specifying.

EVN, which also invests in power facilities, finance and labor training, often claims losses when asking for permission to raise prices.

On December 1, the company raised retail power prices by 6 percent, a decision that came amid the peak year-end production season with little advanced notice. It also raised retail prices by 7.5 percent in March 2015 and wholesale prices by 2-5 percent in May 2016.

Nguyen Manh Hung, deputy head of Vietnam's consumer rights group Vinastas, called the latest price hike a "surprise" that consumers were completely unprepared for.

"It's not fair that the supplier gets to dictate the prices and the customer doesn't get a say," Hung said.

EVN is also Vietnam’s biggest debtor, owing early VND487 trillion ($21.5 billion) at the end of 2016, according to a government report issued in October.

 
 
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