The Vietnam Chamber of Commerce and Industry (VCCI) recently coordinated with the Ministry of Finance’s General Department of Vietnam Customs and General Department of Taxation to organise dialogues on tax and customs policies with enterprises in 2013. The events took place in Hanoi and Ho Chi Minh City.
Easing administrative difficulties
This annual meeting aimed to provide the business community with latest information on tax and customs issues such as the Corporate Income Tax Law, the amended VAT Law, digital signature and automated clearance system. This was the opportunity for enterprises to have direct dialogue with the leaders of the Ministry of Finance, customs and taxation administrators. This event drew the participation of a large number of companies and was considered the most open meetings between State officials and enterprises concerning solutions to problems and difficulties against enterprises.
Hoang Quang Phong, Director of Membership and Training Department, VCCI, said, according to results of quick survey conducted by VCCI, a majority of enterprises have seen a significant progress in tax administration reform in recent years which has helped ease burdens on enterprises. In assessing the enforcement of laws on customs, an average of 60 per cent of respondents said “easy to implement” while 37 per cent said “relatively difficult to implement”. Just a small proportion of companies participating in the survey said “very hard to get it done.”
In receiving, examining and registering declaration documents, the survey showed that 69 per cent of respondents still need to wait more than half an hour to receive the reply to declaration documents from customs officers when they use conventional customs procedures. Electronic customs seemed to be a superior form as just 39 per cent complained about it (this service is available during official working hours).
Based on recommendations of businesses, VCCI put forth proposals on tax administrative procedure reform. Particularly, the tax sector needs to reform procedures and processes of receiving and settling documents and refunding taxes, facilitate taxpayers to complete tax payment papers, allow more forms of internet-based tax declaration and payment. The sector should also consider combining appropriate business support policies, especially for small and medium businesses; and enhance training, instruction and information of taxes and tax laws. Concerning customs, VCCI recommended that the customs sector improve customs procedures and processes; enhance professional training for customs officials; and upgrade information technology infrastructure, machinery and other equipment.
Specific examples
During the dialogue, leaders of the Ministry of Finance, tax and customs authorities specifically answered questions from the business community. Nguyen Hong Khoai, deputy director of Tax and Accounting Consulting Co., Ltd, proposed that the Ministry of Finance reconsider regulations on temporary import for re-export. He said that invoice printing and online tax declaration belong to public administration. Hence, the Ministry of Finance should grant licences to this activity in order to eradicate the opinion that this is the backyard of the Ministry of Finance and reduce costs as well. He added that the Circular 66 confuse businesses while Circular 35 add troubles to enterprises.
With respect to temporary import for re-export, the Ministry of Finance noted that enterprises should keep closer track of this issue because the Government already issued the Directive 23 to manage this kind of goods, resulting to a drop in the volume of goods temporarily imported for re-export. The Ministry of Finance also promulgated regulations on gathering of goods temporarily imported for re-export.
The State controls invoice printing, invoice pricing, digital signature pricing. Hence, these prices are governed by the laws and the Ministry of Finance is an invoice issuer. Similarly, digital signature is administered by the Ministry of Information and Communications and this instrument will be popularised and has helped reduced a lot of expenses in recent years.
Hoang Thi Minh Tam, deputy general director of Haiphong Manpower Supply and Trading Company, said that her company was transformed from a State-owned business entity into a joint stock entity in March 2003 in accordance with the Decision 416/QD-UB of Haiphong People’s Committee. Shortly after going public, the company was guided by the Haiphong Taxation Department to register corporate income tax preference applicable to newly equitised companies as stated by the Decree 64/ND-CP of the Government. The company was exempted from taxes in two years after the equitisation ((2005 and 2006) and granted a 50 per cent discount in the next two years (2007 and 2008). All balance sheet reports were submitted to the State Capital Investment Corporation (SCIC) which held 51 per cent of the stake at that time before divesting in 2010.
But, in November 2011, the Haiphong Taxation Department inspected the company’s tax payment in the 2006 – 2010 period and issued a decision saying that the company was not given tax exemption and reduction applicable to newly equitised companies as stipulated by the Decree 64. The tax administrator decided to collect taxes in arrears and imposed fines on the company. The company sent documents on this matter to the Haiphong Taxation Department, the General Department of Taxation, the Corporate Finance Department, and the Ministry of Finance and received the answer: The company was given corporate income tax preference as stated by the Decree 64/ND-CP but the Haiphong Taxation Department and the General Department of Taxation turned down the decision. So, the company very much expected to receive the final answer of the tax authority. The company’s tax in arrears was over VND1 billion.
Deputy Finance Minister Do Hoang Anh Tuan said he will answer the company in writing before November 10, 2013 and will seriously warn the Haiphong Taxation Department of this issue.
Remarking on difficulties in mergers and acquisitions (M&A) business, Man Ngoc Anh, CEO of Hanaka Group, based in Bac Ninh province, mentioned tax application specified by the Circular 123/2012 at the Dong Nai Taxation Department. He said his company bought a company in Dong Nai province. At the time of takeover, the acquired company had a registered capital of VND88 billion and it was then supplemented VND80 billion to raise its share capital to VND168 billion. But, it suffered operating loss of over VND200 billion. Hanaka Group took over it and restored its business operation, thus creating jobs for many workers and paying a huge sum of taxes to the local State Budget. However, the Dong Nai Taxation Department still collected taxes of the acquired company. “It is extremely unfair to collect taxes of a company suffers losses trebling its registered capital,” he bemoaned.
Deputy Finance Minister Anh Tuan said the tax collection performed by the Dong Nai Taxation Department in this context is perfectly lawful. In law, the old company registered to supplement VND80 billion to its capital but this was not accounted into expenses. In this case, the subject to be collected is the buying company, not the sold company. Indeed, he said new legal documents should be clearly defined as M&A business is very active now.
This dialogue was highly appreciated by enterprises for its effectiveness. However, they expected their recommendations be handled thoroughly.
VCCI Vice President Pham Gia Tuc affirmed that the finance sector in general and the tax – customs sectors in particular always regard enterprises as their partners, introduce support policies for enterprises, and apply modern technologies and equipment to provide the best conditions for enterprises to develop sustainably and courage them to contribute more to the State Budget and to the development of Vietnamese economy.
Le Hien
Đăng ký: VietNam News