Customs and Tax Policies Dialogue 2011: Helping Businesses Deal with Difficulties

 

 Promoting reform of administrative procedures

The Ministry of Finance has been appointed by the Government to amend 132 documents in a bid to streamline 708 administrative procedures including 223 ones of taxation and 135 ones of customs. According to statistics of the tax and customs sectors, respectively 199 outs of 233 administrative procedures and 126 out of 135 ones have been rechecked, supplemented and amended. This is really a huge effort of the finance authority to meet practical requirements of the country’s economy. Regarding enterprises, lots of them have recognized the positive results of administrative reform to the reduction of printing, travelling cost and time. Under the General Department of Customs’ preliminary report, the reform of administrative procedures has helped to save VND703 billion annually for the state budget and businesses. In parallel, e-customs has been so far applied over 20 out of 33 provincial and municipal departments of customs with more than one million customs declarations, accounting for 68 per cent of total declarations and getting turnover of nearly US$100 million. The number of enterprises having registered to attend e-customs is over 42,000. 

 

In terms of the tax sector, by the end of August, there had about 40,000 enterprises who registered to use tax return software. The project on Modernization in state budget collection for taxation-customs-treasury-finance have been carried out in 53 provinces and cities, helping to decrease transport and transaction costs for enterprises and ensure accuracy and convenience for tax payers via banking system.

 

Another example of administrative reform is Decree No. 51 of the Government on self-printed invoices. All efforts are aimed to give enterprises self-autonomy, facilitating them to be active in production and business, 

 

During the dialogue, the ministry offered a number of main documents to collect opinions from enterprises such as Decree 123/2008ND –CP on added value tax, Decree 26/2009/ND-CP on special consumption tax, Decree 124/2008/ND-CP on Corporate Income Tax. The ministry also presented amended contents of the law on tax, new policies and administrative procedures of the customs sector. These are considered to be documents directly concerning enterprises’ operation. For example, to Decree 123/2008ND –CP on added value tax, the ministry collected opinions on supplementing the item of trading goods and services outside Vietnam into items exempted added value tax. In fact, because of the economic integration lots of enterprises have arisen trading transactions outside Vietnam. With such transactions, contract can be signed outside or inside Vietnam but goods don’t come in or out the country’s territory. They, thus, will not be taxed.     

For Decree 124/2008/ND-CP on Corporate Income Tax, the ministry proposed to supplement an item which allows enterprises to deduct costs relating to bonus and life insurance for workers if they get enough legal papers. The ministry also collected opinions on reducing corporate income tax from 28 per cent to 10 per cent to press agencies in order to support newspaper offices as well as their employees in the context that most of newspapers and magazines are balancing their budget by themselves currently. 

 

During the dialogue, the representative of Hanoi Footwear Joint Stock Company said the corporate income tax of 25 per cent was relatively higher than that of regional countries and proposed a reduction to raise Vietnamese enterprises’ competition. Answering the query, leader of the General Department of Taxation said the current tax was suitable, equaling to those of some regional countries like China, Singapore and Thailand. In fact, the corporate income tax was adjusted from 28 per cent to 25 per cent under Circular130/2008/TT- BTC. 

 

Representative of Soc Trang province’s taxation department quoted opinions of some local enterprises as saying that whether or not transfer payment for the bill of VND20 million and above is low. The tax officer proposed to raise the figure to VND20 million. Deputy Minister of Finance said the stipulation is a method to boost the Government’s policy in payment without cash.

 

Many enterprises question the ministry at the workshop about the issue of basic construction works using state budget. For example, vice head of Nam Dinh province’s association of contractors said his company got a work valued VND40 billion from the budget. So far the company received only VND8 billion due to the reduction of budget but it must still pay tax based on the figure of VND40 billion. He proposed a stipulation that enterprise will pay tax based on the sum they disburse in order to ensure harmonized interests of all economic parties.

 

Other difficulties mentioned by enterprises at the dialogue were added value tax, export-import tax, investment priority on tax, corporate income tax, special consumption tax, e-customs. The community of enterprises expected that after the dialogue, the finance authority should speed up the implementation of commitments.

 

Mr Pham Gia Tuc- VCCI Vice President 

More than 90 per cent of enterprises surveyed highly appreciated the effort of tax and customs procedure reform. The number as well as complication of difficulties facing enterprises also reduced against the previous years. However, tax and customs officers need more efforts to improve the legal environment and procedures in order to share difficulties with enterprises.

The Government appreciates the administrative procedures reform of the tax and customs sectors under Project 30. The sectors need to take lead in the field in order to maximally facilitate enterprises, boost the country’s trading activities and create a fair business environment. The Government is aiming to build a scheme on coordination between customs and relevant authorities to settle customs clearance procedures at sea, by air and road, towards ensuring comprehensive process of national and ASEAN one door mechanism by 2012.

 

It is necessary to build a coordination mechanism of collecting personal income tax, health insurance, unemployment insurance and to share information between the tax agency and social insurance agency. According to enterprises, the ministry of finance’s progress in reforming has helped enterprises a lot in production and business.