Simplify VAT refund to boost foreign tourists' spending: expert

By Lan Huong   April 1, 2022 | 04:45 pm PT
Simplify VAT refund to boost foreign tourists' spending: expert
Foreign tourists at Ben Thanh Market in downtown HCMC, March 2020. Photo by VnExpress/Tam Linh
Vietnam should simplify procedures for foreigners and overseas Vietnamese to get value-added tax (VAT) refunds so that they increase their spending, an expert says.

Nguyen Thi Cuc, head of Vietnam Tax Consultant Association, said at a tourism conference Friday that the average per capita expenditure of foreigners visiting Vietnam remained low and the government should take appropriate measures to boost their spending.

The average spending of international tourists in Vietnam in 2018 was $1,065, according to the Vietnam Tourism Report prepared by the Vietnam National Administration of Tourism.

Cuc said one of the most effective measures is to help foreign tourists easily receive VAT refunds when they leave the country.

Foreign tourists and overseas Vietnamese currently receive VAT refunds on purchases made in Vietnam under a circular that took effect in 2014.

They are entitled to obtain a refund of 85 percent of VAT on eligible goods bought from eligible shops during their travel in Vietnam. The remaining 15 percent will be counted as service fees.

The refund can be collected at airports and ports before tourists leave the country. They will have to shop at designated stores that sell VAT refundable goods. After purchasing goods, the store staff will issue invoices and a VAT refund declaration form.

At airports or ports, visitors must submit invoices along with their VAT declaration form to the refund customs inspection office for checking and stamping before taking them to the payment counter to get their refund.

Cuc said such requirements were inconvenient for foreign tourists. In some cases, because they were afraid of not being able to get to the aircraft on time, they have not bothered about the scheme, so this has affected their spending in Vietnam, she added.

She proposed that tourists be able to get their VAT refunds right where they shop like in many other countries including Japan.

After purchasing goods, visitors should be able to take their invoices to the tax refund counter inside the shopping centers and supermarkets.

After checking the purchased goods and immigration documents, the tax refund counter can pay visitors in cash or to their credit cards. They can stamp relevant documents for custom officials to check when tourists leave the country.

The proposal to simplify VAT refund procedures is the latest measure proposed to boost tourism revenues. Other experts have proposed that the government considers granting visa exemptions to more countries with longer stays.

The government resumed its unilateral visa exemption policy for citizens from 13 countries as Vietnam reopened inbound tourism a fortnight ago after nearly two years.

Citizens from Belarus, Denmark, Finland, France, Germany, Italy, Japan, Norway, Russia, South Korea, Spain, Sweden, and the U.K. are allowed to visit Vietnam for up to 15 days without a visa regardless of passport type and entry purpose.

The country also has bilateral visa exemption policy for ASEAN co-members, Chile and Kyrgyzstan.

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