Tax from coffee has greatly contributed to budget revenue in Central Highlands provinces of Vietnam in recent years. Currently, tax evasion and maintaining tax liability of companies purchasing coffee have decreased budget revenue. The first step for collecting taxes from these companies has been carried out by tax authority to create equality for every company and implement its duty on budget revenues.
With the tax evasion (including coffee tax in Central Highlands provinces), Ministry of Finance published document No. 7527/BTC-TCT dated 12th June 2013 regulating to rearrange enterprises of high tax risk. By that, they are newly established under 24 months, with total capital of under VND10 billion, annual revenue of over VND200 billion, value added tax (VAT) contribution of under 2 percent compared to total revenue, tax refund of over VND20 billion, as well as have used invoice from enterprises located in areas with little resources. Since then, tax inspector authority has possessed particular reason to deal with these enterprises and discover their misbehaviour.
The Central Highlands provinces and tax authorities have recently carried out some solutions to gradually prevent tax evasion raised from key valuable coffee plant. Some solutions have been taken into account like: Verifying input invoices of business facilities from out of the province, identifying cases of appropriating VAT, organising tax check points in circulation and supervision. Especially, in Di Linh district has implemented the Scheme of “Supporting High qualified and sustainable development coffee plant, linking with tax collection management at the source”.
However, some companies still collude with others to make circulations of buying and selling, intermediaries, and many provinces involved, so when inspection is made in one stage, other stages will be alarmed to run away, causing a lot of difficulties. Specifically, on – site tax collection management is less effective than expected, because activities to identify areas, output, household consumption, and purchased products of each enterprise are not up to date.
Searching for sustainable solution, tax authority has advised and discovered new solution of coffee tax since July 2013 in coffee plant areas. Regarding actual data, over 90 percent of coffee sold to foreign companies from domestic ones is exported. Some companies collecting coffee in Lam Dong have realised tax duties for coffee trading agents. Most of them possess 100 percent of foreign capital, and situate in Di Linh coffee area and Loc Son industrial zone (Bao Loc). These companies appreciate and well implement tax liabilities for coffee agents, because export companies will quickly have tax refund for around six months by method of first tax refund and after examination. Deals among export companies and coffee trading agents will be showed clearly in trading invoices for discounting tax.
For tax management authority, by this method, State management authority may gather statistics, and temporarily manage coffee trading agents dealing with export companies and all tax showed on trading invoices. Solution of ensuring 100 percent of refunded VAT contributed to State budget revenue, restricting trading circulations and trading frauds. Lam Dong Vietnam Olam Company paid tax with amount of VND3.3 billion for five cases. Vietnam Atlantic Commodities Company paid tax with amount of nearly VND5.4 billion for 16 cases and as well as other trading coffee agents in Gia Lai province.
After period of deploying and implementing this method, some export coffee companies have suggested this paying tax method, so actively contributing to collecting tax activities and budget revenue in the province and key coffee plant area.