Tax refund regulation issued to target better business climate

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The Hanoitimes - The Ministry of Finance has asked local tax authorities to refund value-added tax (VAT) to enterprises if the amount of tax they default on is less than the amount of tax refund that they will receive, so that it will step up tax reforms to improve the business environment. The ministry’s decision is in response to complaints about tax refund delays caused by tax agencies, which causes shortage in businesses capital sources. Deputy Minister Do Hoang Anh Tuan said that 287 businesses across the country were waiting for tax refunds but there are both objective and subjective reasons for the delay. One of the reasons is that some enterprises owe the State budget but the State budget must also refund tax to these enterprises. However, under current regulations, the two debts are not allowed to be offset, so enterprises are required to settle debts with the State budget before receiving tax refund. According to Tuan, there are 20 enterprises facing this … [Read more...]

Finance Ministry eases regulation for tax refund

Hanoi, March 18 (VNA) - The Ministry of Finance has asked local tax authorities to refund value-added tax (VAT) to enterprises if the amount of tax they default on is less than the amount of tax refund that they will receive. The ministry’s decision is in response to complaints about tax refund delays caused by tax agencies, which causes shortage in businesses capital sources. Deputy Minister Do Hoang Anh Tuan said that 287 businesses across the country were waiting for tax refunds but there are both objective and subjective reasons for the delay. One of the reasons is that some enterprises owe the State budget but the State budget must also refund tax to these enterprises. However, under current regulations, the two debts are not allowed to be offset, so enterprises are required to settle debts with the State budget before receiving tax refund. According to Tuan, there are 20 enterprises facing this situation. The ministry officially abolished the regulation via a … [Read more...]

MOF eases regulations for VAT tax refunds

HA NOI (Biz Hub) — The Ministry of Finance has asked local tax authorities to refund value-added tax (VAT) to enterprises if the amount of tax they default on is less than the amount of tax refund that they will receive. The ministry's decision is in response to complaints about tax refund delays caused by tax agencies, which is blamed for the shortage in businesses capital sources. Deputy Minister Do Hoang Anh Tuan said that 287 businesses across the country were waiting for tax refunds but there are both objective and subjective reasons for the delay. One of the reasons is that some enterprises owe the State budget but the State budget must also refund tax to these enterprises. However, under regulations previously issued, the two debts are not allowed to be offset, so enterprises are required to settle debts with the State budget before receiving tax refund. According to Tuan, there are 20 enterprises facing this situation. The ministry officially abolished the regulation … [Read more...]

Businesses bemoan slow VAT refunds

Minh Tam Speaking at the event, a representative of Tan Nhat Huong Co Ltd based in HCMC’s District 3 asked whether the company could get a VAT refund of VND21 billion (around US$945,000) this week though a relevant decision on the refund was issued on February 2. However, Do Quoc Tuan, deputy head of the supporting division for taxpayers at the HCMC Department of Tax, could not answer the question. Tuan was the highest representative of the department at the dialogue with hundreds of businesses in the city. The representative of Tan Nhat Huong raised the question after the department reportedly got money for VAT refunds from the General Department of Taxation. The agency is expected to sign decisions for enterprises to get VAT refunds this week. Tuan said the General Department of Taxation said it would transfer money to the agency for VAT refunds. He acknowledged that slow VAT refunds have rattled businesses but requested them to sympathize with the agency. However, a … [Read more...]

Claiming tax refunds a hassle for Vietnamese businesses

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Businesses in Vietnam are disadvantaged when it comes to both paying taxes and getting refunds. While businesses are fined for settling their taxes even one day late, tax authorities seem to enjoy impunity by delaying tax refunds to the same firms for long periods of time. In Vietnam, businesses that have greater input value added tax (VAT) than output tax for 12 consecutive months can file a request to claim a tax refund. Input tax is the VAT a firm is charged when buying goods or services from another supplier. Output tax is the VAT at the same rate that same company charges its customers when selling its own goods or services. Businesses calculate their VAT balance every 12 months to see if they are eligible for a refund. However, while tax authorities immediately receive tax payments from businesses, they tend not to reciprocate in paying VAT refunds to eligible companies. Tuoi Tre Do Phuoc Tong, chairman of the Ho Chi Minh City Mechanics Association, said late … [Read more...]

Fuel supply forecast to outpace demand in 2018

A view of Dung Quat Oil Refi nery in Quang Ngai Province. Vietnam National Oil and Gas Group has predicted that oil and gas supply could exceed demand in 2018 - PHOTO: LE ANH

Ngoc Lan Dung Quat in Quang Ngai Province can satisfy some 30% of local demand and fuel trading companies import the remainder. Oil and gas import prices have fallen due to tariff cuts given the free trade agreements Vietnam has signed. Furthermore, the global price has slumped due to the oil glut. According to PVN, when Nghi Son oil refinery begins commercial operation in 2017 and reaches its maximum capacity in 2018, annual local supply would amount to around 17.6 million cubic meters, with 7.27 million cubic meters from Dung Quat and 9.62 million cubic meters from Nghi Son. The figure does not include the projects using condensate. Meanwhile, the market is estimated to need around 17.33 million cubic meters of gasoline, diesel and jet fuel in 2018 based on domestic demand growth of 3% a year. Therefore, the combined supply from the two refineries and other sources would meet domestic demand while diesel would be redundant. If Dung Quat and Nghi Son ran at full tilt, … [Read more...]

Vietnam businesses plan legal action for delayed tax refunds

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Representatives of businesses at a tax office in Hanoi. Photo: Ngoc Thang At least one company in Vietnam has said it is finishing procedures to take legal action against a local tax office, while many others have said they too will take the tax authorities to court if they fail to pay them as promised recently by the finance ministry. Speaking to Thanh Nien, a spokesperson for Nghe Thang wood processing company in the southern province of Binh Duong said the firm plans to file a lawsuit against the tax office in Thuan An town, which owes it tax refunds of around VND4 billion (US$179,400). The office rejected Nghe Thang's refund demand at the end of 2014, claiming the company operates in the wood processing industry, which is not allowed in Binh Duong. But the spokesperson said the company is licensed and has never been punished by local authorities for operating in a prohibited sector. He said his company has done everything to prove that it runs a legitimate business, but has … [Read more...]

Finance ministry backs PetroVietnam demand for tax break for Dung Quat refinery

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An undated photo of Dung Quat oil refinery in the central province of Quang Ngai. Photo: Hien Cu The finance ministry has backed state-owned oil giant PetroVietnam's controversial demand for the country's sole refinery Dung Quat to be given further tax breaks to compete with cheap imports, local media reported Monday. The proposal is "absolutely necessary and reasonable," considering that oil products from South Korea have been taxed at 10 percent this year compared to 20 percent earlier, Deputy Minister of Finance Do Hoang Anh Tuan was quoted as saying. He said his ministry would recommend a new tax policy for Dung Quat to guarantee "equality" between local and imported products. Last month PetroVietnam and its subsidiary Binh Son Refining and Petrochemical Company, which operates the US$5-billion refinery in the central province of Quang Ngai, had asked the government to reduce its 20 percent import tax on crude oil. Without tax breaks, they said, Dung Quat would shut down in … [Read more...]

PVN continues to beg for Dung Quat Refinery import tax cut

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Vietnam National Oil and Gas Group (PVN) has proposed to cut fuel tax rate to reduce losses due to decreasing world fuel prices. PVN is seeking yet more preferential tax treatment PVN has asked the Ministry of Finance to adjust the fuel tax rate to aid their member company and manager of Dung Quat Refinery, Binh Son Refining and Petrochemical Company. A representative of Binh Son Company said a textile or food processing company can halt operations for a few days if they had to incur high tax rate or large inventory, however, a big oil refinery is different because it will take two weeks to halt refinery operations and 10 days to restart. It is also emphasised that the refinery provides 35 percent of the country's yield of oil and claimed the shutdown would threaten the national energy security. In last November, PVN also sought approval to lower tax rates at Dung Quat Oil Refinery because of poor competitiveness in relation to imported fuels. Diesel import taxes for products … [Read more...]

Dung Quat refinery seeks tax relief

A view of Dung Quat Oil Refinery. — Photo bsr.com.vn

HA NOI (Biz Hub) — The tax reduction for Dung Quat Oil Refinery is necessary and reasonable to ensure equal principles between local and imported products, Do Hoang Anh Tuan, the deputy minister of finance, said. "The reduction would also follow the reasonable protection level under international commitments when Viet Nam joins the trade pacts," Tuan said. Previously, the Binh Son Refining and Petrochemical Co (BSR), which operates and manages Dung Quat, was seeking approval to lower tax rates because of a lack of competitiveness against imported fuels as well as untie its difficulties. The diesel and mazut import taxes from ASEAN countries were cut from 20 per cent to 10 per cent since the beginning of this year in accordance with the ASEAN Trade in Goods Agreement (ATIGA). However, products from Dung Quat are still subject to an import tax of 20 per cent, forcing a number of local businesses that bought petroleum from Dung Quat to choose other imported sources. The deputy … [Read more...]

Vietnam, Switzerland boost financial cooperation

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(VOVworld) – A delegation of Vietnamese finance, customs and taxation officials visited Switzerland and met with officials of the World Trade Organization (WTO) and the Swiss Federal Customs Administration and Federal Department of Finance from March 5 – 8. The visiting delegation, led by Deputy Minister of Finance Do Hoang Anh Tuan, included representatives of the General Department of Customs and the General Department of Taxation. At a working session with WTO Director-General Roberto Azevêdo on Monday, the two sides discussed the implementation of the WTO Trade Facilitation Agreement (TFA) in Vietnam, which ratified the pact in November 2015. As the head of the negotiation group on the agreement, the customs general department actively sought technical assistance to prepare for the TFA implementation and engaged in bilateral and international forums on trade facilitation. Deputy Minister Tuan thanked WTO officials for helping Vietnam during negotiations and in … [Read more...]

Vietnam meets with WTO, Swiss customs-finance officials

Geneva, March 8 (VNA) – A delegation of Vietnamese finance, customs and taxation officials visited Switzerland and met with officials of the World Trade Organisation (WTO) and the Swiss Federal Customs Administration and Federal Department of Finance from March 5 – 8. The visiting delegation, led by Deputy Minister of Finance Do Hoang Anh Tuan, included representatives of the General Department of Customs and the General Department of Taxation. At a working session with WTO Director-General Roberto Azevêdo on March 7, the two sides discussed the implementation of the WTO Trade Facilitation Agreement (TFA) in Vietnam, which ratified the pact in November 2015. As the head of the negotiation group on the agreement, the customs general department actively sought technical assistance to prepare for the TFA implementation and engaged in bilateral and international forums on trade facilitation. Deputy Minister Tuan thanked WTO officials for helping Vietnam during … [Read more...]

Finance Ministry plans to boost domestic revenues

An employee is at work at a domestic enterprise. The Ministry of Finance wants domestic tax collections to go up in 2016-2020 to help realize budget revenue targets - PHOTO: QUOC HUNG

Tu Hoang Speaking at a meeting in Hanoi last week, Tuan told cities and provinces to draw up plans with higher domestic revenue than 8% as in previous years so that tax and fee revenues from domestic sources could account for over 80% of the total, up from 70% in the past five years. To realize the target, Tuan told cities and provinces not to set the domestic revenue increase target of only 8% in their reports to be submitted to the ministry in 2016. Tuan called on tax authorities to make sure that revenues will account for at least 21-22% of gross domestic product (GDP) this year, with taxes and fees making up 20-21% of the total. On top of that, budget deficit must be kept at below 4% of GDP and public debt at below 65% of GDP. He urged provinces and cities to try to meet the Prime Minister’s requirement that their budget collection rise is equivalent to the combined economic and consumer price index (CPI) growth. For example, the People’s Council of Dong Nai … [Read more...]

Taxpayer database to stop payment evasion

HA NOI (VNS) — The development of a taxpayers' database is necessary to improve the management of tax agencies and prevent tax evasions, such as transfer pricing, according to Deputy Minister of Finance Do Hoang Anh Tuan. However, developing a taxpayer database would require the coordination of many organisations in different industries, such as garment, textile, footwear and beverages, he said at an online meeting last Friday, held by the General Department of Taxation. Tuan noted that simplifying tax administrative procedures, coupled with applying information technology, were first steps in developing a reliable database for better management. With a taxpayer database containing transparent financial indicators, the quality of forecasts of budget collections would be improved, said Tran Van Phu, Deputy General Director of the taxation department. At the conference, tax authorities also raised concerns about difficulties in collecting tax debts and slow tax refunds. Nguyen … [Read more...]

Tax revenues beat estimates for 10.2 percent rise

Total tax revenues reached VND806,378 billion (US$35.96 billion) last year accounting for 110.2 percent of estimates, reported the General Department of Taxation on February 26. Of the total revenues, crude oil brought VND67,510 billion accounting for 72.6 percent estimates. Domestic revenues hit VND738,868 billion accounting for 115.7 percent estimates. Sixty one out of 63 provinces and cities in the country obtained their ordinance estimates. Quang Ngai and Ba Ria-Vung Tau provinces failed to complete the assigned norms because of the global drop of oil and gas prices. Tax agencies inspected 79,297 businesses, reduced their declared losses by VND23 trillion and reclaimed tax arrears of over VND12,350 billion. They also inspected 4,751 enterprises reporting losses, showing signs of transfer pricing and conducting related party transactions, which result in a loss reduction of VND10,050 billion and the collection of VND1,063 billion arrears and penalties. This year the tax … [Read more...]

State budget restructuring heats up Party Congress

Hanoi, January 22 (VNA) –Delegates to the ongoing 12 th National Party Congress continued debating documents in the afternoon of January 22, under the chair of Politburo member and President Truong Tan Sang. The Congress heard 11 reports, focusing on how to apply socialist theory to national construction and defence, growth model reform, economic restructuring and business environment improvement. They also discussed the application of the ‘three strategic breakthroughs’ to building a health sector geared towards equality and efficiency, along with judicial reform, high-quality personnel training, cultural development, the perfection of the political system and external relations. Deputy Finance Minister Do Hoang Anh Tuan said the Congress’s Resolution should place more importance on State budget development and restructuring during 2016-2020. He outlined a structure for the State budget, of which 80 percent should come from domestic income. Income from … [Read more...]

Party Congress continues with documents discussion

Delegates to the 12th National Party Congress continued to discuss a number of documents in Hanoi on January 22 under the chair of Politburo member and President Truong Tan Sang. Delegates to the 12th National Party Congress continued to discuss a number of documents in Hanoi on January 22 under the chair of Politburo member and President Truong Tan Sang. Regarding growth model renovation and economic restructuring, Secretary of the Hai Phong municipal Party Committee Le Van Thanh suggested considering the combination of extensive and intensive development and the possible application of one common growth model for the whole country. Localities that have economic difficulties should focus on extensive development to attract investment, create jobs for locals and boosting economic restructure. Meanwhile, cities and provinces with rapid industrialisation should focus on quality growth to increase productivity and competitiveness for their economies, he recommended. President of … [Read more...]

Vietnam premier calls for ways to cope with tumbling oil price

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Prime Minister Nguyen Tan Dung has asked a government body and state-run Vietnam National Oil And Gas Group to come up with the best solutions to falling oil prices, which will cause a negative effect on the national coffers this year. The requirement of the Vietnamese premier was set out at a meeting chaired by the Ministry of Industry and Trade in Hanoi on Thursday. A drop in world oil prices last year resulted in a loss of tens of trillions of Vietnamese dong [VND1 trillion = US$44 million], though overall tax collection rose 12 percent year on year, Prime Minister Dung said. Oil prices pared on Thursday ended 2015 sharply lower as the "black gold" was battered by prolonged global oversupply and a slowdown in energy-hungry China's economy, according to AFP. Brent crude settled up 82 cents at $37.28 a barrel, rebounding from a near 11-year low of $36.10 hit earlier in the Thursday session, Reuters reported. Meanwhile, the U.S. benchmark West Texas Intermediate (WTI) rose … [Read more...]

MOF plans heavier taxation, aims at big businesses

Within the last several months, plans on raising tax rates have been designed.

VietNamNet Bridge - Within the last several months, plans on raising tax rates have been designed. However, businesses have been reassured that heavier taxation is aimed at big corporations. Proposals on raising taxes on many products have been made. The Ministry of Finance (MOF) plans to tax more heavily on car imports under the mode of complete built units (CBU). The import tax on some input materials for dairy production will also be raised. Besides, higher tax rates will be imposed on iron exports, while luxury and import taxes will be applied to many beverage products, both domestically made and imports. The tax increase plans have worried domestic businesses which still have not fully recovered from the economic downturn. In most cases, the tax increases commence at the end of the year, while some kinds of taxes would take effect early next year. The tax increase plans have worried domestic businesses which still have not fully recovered from the economic downturn. Many … [Read more...]

Oil won’t affect Vietnam’s 2015 budget

Central Technology Platform No 2 at Bach Ho (White Tiger) oil field of Vietsovpetro Joint Venture. Plunging oil price would not affect budget revenue this year.

Do Hoang Anh Tuan, deputy minister of finance, said reduction in the world crude price to US$36 per barrel in future transactions would not affect budget revenue this year. The budget revenue this year has exceeded the target to reach between VND65 trillion and VND66 trillion ($2.9 billion), including 6 per cent from tax revenue of the crude oil exports, he said. The tax revenue from the crude oil exports at present does not account for a large segment of the total tax revenue unlike five to ten years earlier. The finance ministry has forecast economic development for each case that the crude oil price is $60, $50, $45, or $40 or even $35, or $30 per barrel, he said. In 2016, Viet Nam would import 12.5 million tonnes to 13 million tonnes of petrol and oil and if the world crude oil price still remains at $36 per barrel, the nation would save between $2 billion and $2.1 billion. The reduction in oil prices would bring down the input price of production, so production and … [Read more...]