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VN firms happy with tax reforms, want further simplification: survey

Reforms in taxation procedures have elicited increased satisfaction from enterprises over the last two years, but they continue to expect further simplification, a survey by the Viet Nam Chamber of Commerce and Industry (VCCI) has found.


VN firms happy with tax reforms, want further simplification: survey

An official explains procedures to taxpayers in Quang Tri Province. 


The survey, which received nearly 3,500 responses, found 75 per cent of the firms were satisfied with tax reforms in 2016, four percentage points higher than 2014, but only eight per cent evaluated the tax procedures to be simple.

Releasing the survey results yesterday, VCCI Chairman Vu Tien Loc said: “There is significant room to hasten tax reforms.”

He said tax authorities must make greater efforts to create favourable conditions for business development and realizing the Government’s goal of doubling the number of “efficient firms” to one million by 2020.

Dau Anh Tuan, head of the VCCI’s Legal Department, said the survey showed that 41 per cent of the firms still felt burdened by administrative procedures. They found the forms being changed too often, that the procedures continued to be time-consuming and cumbersome, demanding too much paperwork, and instructions were inadequate.

He expressed concern that 34 per cent of the firms reported paying “informal charges,” two per cent higher than in 2014. Furthermore, 30 per cent said “yes” when asked whether they felt discriminated against if they did not pay the informal charges.

The survey also revealed that large firms tended to be inspected for tax compliance more regularly than smaller ones, Tuan said.

Among firms with annual revenues of more than VND100 billion, 74 per cent received inspector teams frequently in the past year. This fell to 32 per cent for firms with less revenues.

Tuan said this might discourage firms from expanding their operations.

He also said that tax policies were being changed too many times within a year, causing difficulties for businesses.

Tax authorities must hasten the simplification of tax procedures and promote the application of information technology in tax filing, payment and management, Tuan said. Solutions must also be found to prevent informal charges, he added.

“Greater efforts are required,” Minister of Finance Dinh Tien Dung said at the conference yesterday.

“The tax procedures must be further simplified, application of e-tax system hastened and risk management deployed in inspections to avoid troubling firms,” Dung said.

According to Loc, tax reforms are heading in the right direction but businesses expect them to move faster.

The survey found 81 per cent of firms saying further simplification in tax procedures was needed, 60 per cent saying there must be greater transparency and 43 per cent saying the attitude of tax officials should improve.

Statistics compiled by the Finance Ministry show that the time taken to complete all procedures and pay taxes has been cut by 420 hours in 2013 to the current 117 hours.

Almost all businesses, 99 per cent, are making their tax declarations online and 96 per cent have registered to make e-tax payments, according to the Ministry.

Tax refunds still a problem

The country’s tax administration has undergone many reforms but getting refunds remains a challenge for businesses, a senior HCM City leader has admitted.

Speaking at a meeting on ‘Tax administrative reform and enterprise support’ last Friday, Nguyen Thi Quyet Tam, chairwoman of the city People’s Council, said, “Tax refunds need to be timely and fair to enterprises.”

Chu Tien Dung, chairman of the HCM City Enterprise Association, said the recent reforms in tax administration, especially the automatic tax registration and payment, save companies a lot of expenses and time.

“However, tax policies change frequently and enterprises cannot keep track and often make mistakes, and are fined,” Nguoi Lao Dong (Labourers) newspaper quoted him as saying.

He said tax authorities should know which businesses deliberately file incorrect returns and which ones are merely ignorant.

“Tax agencies pay tax refunds very late and it affects businesses.

“Enterprises are fined if they pay tax late but tax offices face no penalty if they make tax refunds late.”

The law stipulates that the refunds should be made in six to 60 days.

Truong Lam Danh, head of the city People’s Council’s legal department, said: “But in fact enterprises never get tax refunds within this time.”

Vuong Chi Cuong, director of Tuong Phat Garment and Textile, said his company exports goods to Cambodia. The tax authorities demand proof from customs at border gates that his company’s goods have crossed over into Cambodia, and this delays its tax refunds, he said.

Other companies complained that during exports sometimes goods get damaged and buyers pay lower prices. They then have to file amended tax returns, but tax officials refuse to accept them, and refunds are delayed.

“Enterprises try to take advantage of all the financial resources they have and tax refunds are an important one for them,” Nguyen Dang Hien, director of Tan Quang Minh Trade and Production Company, said.

Tran Ngoc Tam, head of the city tax department, said: “Tax refunds are delayed because many enterprises want tax officials to verify their accounts.

“Since early March the tax department has been making electronic tax refunds and hope to reduce the time.”

Tam instructed the department to “speed up work to release tax refunds to enterprises.”

Tran Vinh Tuyen, deputy chairman of the city People’s Committee, said the city Party Committee has a programme to oversee tax administration to stop corruption, he revealed.

“The police are investigating a tax fraud involving VND 8 trillion (US$355 million) abetted by tax officials. Therefore, it is essential to keep an eye on tax officials.” 

VNS