SOEs Are Biggest Taxpayers

The Top 10 taxpayers in 2011 comprised eight state-owned enterprises (SOEs), one joint venture company and one domestic private business. This is the latest information in the ranking of 1,000 biggest taxpayers in Vietnam in 2012 - V1000, released by Vietnam Report Joint Stock Company (Vietnam Report) in collaboration with the Tax Review Magazine, the General Department of Taxation, and online newspaper VietNamNet. The ranking aimed to praise, honour and encourage businesses to increase corporate income tax payments and consciously abide by tax policies and laws.

 

During the economic slowdown, V1000 companies hold the right to be proud of their ability to ride out difficulties in business activities for their recognised contributions to the national and social budget.

 

V1000 was based on survey data provided by competent authorities and further processed and verified independently by Vietnam Report with feedback data from the enterprises surveyed.

 

This V1000 ranking counted the biggest taxpayers from 2008 to 2011. The ranking order was based on the amount of taxes paid in 2011. V1000 excluded companies fraught with tax inspections performed by authorities from 2011 to October 15, 2012.

 

The military-run telecom firm, Viettel Group, was the largest taxpayer, followed by Vietnam Mobile Telecom Services Company (VMS), Vietnam Joint Stock Commercial Bank for Industry and Trade (Vietinbank), Vietnam National Coal, Mineral Industries Holding Corporation Limited (Vinacomin), Vietnam National Oil and Gas Group (PetroVietnam), Bank for Investment and Development of Vietnam (BIDV), Vietnam Bank for Agriculture and Rural Development (Agribank), Asia Commercial Joint Stock Bank (ACB), Vietnam Post and Telecommunications Group (VNPT), and Vietnam Brewery Limited (VBL).

 

While making the V1000 ranking, Vietnam Report also surveyed V1000 companies about the macroeconomic outlook. The surveying team received over 300 responses from the business community. Most companies expressed their pessimism about the economic recovery time. Up to 46 per cent of respondents said the economy was unlikely to recover in 2013. However, up to 44 per cent of businesses said the revival would start from the second half of 2013.

 

The 44 per cent noted that they had not had access to capital sources in 2011. Meanwhile, 39 per cent were lucky enough to borrow more capital than before, but the loan satisfied just a half of business operation demand.

 

V1000 companies are forecast to pay VND54 trillion of taxes 2012. Despite troubles in production and business activities in 2011, SOEs still took the lead in tax payment with 58.44 per cent in the V1000 list, an increase of 1 percentage point from the previous year. This proved that SOEs made a high profit but this was not enough to prove the high profitability of SOEs given many had a fat profit because they held the monopoly in the exploitation of natural resources and consumption markets.

 

Notably, the private business sector contributed 22 per cent of total corporate income tax, a rise of 4 percentage points from the V1000 list a year ago. Among 410 new companies in the V1000 list in 2012, private enterprises accounted for 51.22 per cent. They accounted for 44 per cent of taxes paid by new V1000 faces, up from 31.3 per cent in 2011. This proved that the private sector had a higher sense and responsibility of tax payment.

 

The V1000 ranking list this year also showed that companies in Hanoi and Ho Chi Minh City - the two largest economic centres in the country - continue to be profit engines for the national economy.

 

Companies in the cities made up 60 per cent on the V1000 list. However, this is not the brightest spot but for the amount of taxes. Hanoi-based companies on the list paid more than VND27,044 billion of taxes, or 50 per cent of total taxes paid by V1000 companies, of which up to 77.24 percent came from State-owned enterprises. Corresponding figures of ​​Ho Chi Minh City-based companies were VND13,494 billion and 25 per cent. Nonetheless, this also shows that the economic development is densely concentrated in two major cities.