For many years, electric vehicles, used for transportation inside golf courses, were free of import tax and special consumption tax (SCT). However, after 2006, they incurred both import duties and SCT, although they were not imported for traffic use. Therefore, Foreign Investors Association organised a meeting for golf course companies and State management authorities, namely Ministry of Science and Technology, Taxation Department under Ministry of Finance, and General Department of Customs to solve this issue.
Hurt by unclear regulations
"Foreign-invested companies are very annoyed. They hear about easier and more open policies, but what is open here?” Nguyen Quy Thang, head of Golf Course Branch, said.
Under the previous Circular 18/2005/TT-BTC dated March 8, 2005, on implementing government Decree 149/2003/ND-CP dated December 4, 2003 with detailed provisions on the Law on Special Consumption Tax, passenger-carrying vehicles used in entertainment and sports areas, and out of traffic as stipulated by the Traffic Law, were exempt from special consumption tax. Therefore, golf course operators imported golf-cars without paying import duties and special consumption tax. Most golf-cars run on batteries and a small proportion on gasoline. They were not used in the public traffic system.
However since 2006, Decree 149 dated December 6, 2005 on implementing the Import and Export Tax Law stated that “Transporting vehicles for special purposes in production lines verified by the Ministry of Science and Technology are exempt from import tax.” Based on this regulation, customs authorities required importing companies to have testimonials from the Ministry of Science and Technology stating “the vehicles belong to production lines,” then they would be free from import tax and SCT. Otherwise, the tax rates on these vehicles are similar to those imposed on four-seat cars.
Golf course operators said Decree 149 ND-CP/2005 did not specify which kinds of transport vehicles are for special purposes or for technological lines and are exempt from taxes, but only that transport means used for production lines verified by Ministry of Science and Technology are exempt from import duties and SCT. Many companies applied for testimonials at the Ministry of Science and Technology, but were rejected because “electric vehicles (from 4-8 seats) used on golf courses are not specialised transport means for technological lines.”
Disparity between ministries
Mr Do Hoai Nam, Deputy Director of Appraisal Department under the Ministry of Science and Technology, said the issue was debated many times. At the department, two deputies approved golf-cars as “vehicles for production lines” and one disagreed. Golf-cars are not common vehicles and are used in certain areas; therefore, it is better to calculate other tax rates, not the same rates as on imported automobiles. However, it is inappropriate to put golf-cars with vehicles used for production lines to exempt them from import tax and SCT.
Competent authorities in the agency are in conflict about solutions, and this worries enterprises. Golf course operators have to wait for their golf-cars to pass through customs. One company said Vietnam has joined the WTO, its policy should follow international practice. Lawmaking agencies should carefully study the regulations and collect ideas from companies to create necessary amendments to address the situation. In this way, they can avoid varying implementations by different authorities. Otherwise, companies will continue waiting for settlement and wasting their money and limiting business efficiency.
Mr Do Hoai Nam presented “We have no idea about tax, finance and customs, but are concerned about technology. The tax policy is carried out by the Ministry of Finance, not us. We asked the tax authorities but they turned us down.” Nam admitted that the method of approach in Decree 149ND-CP/2005 was not good. He added that his Appraisal Department sent a document covering enterprises’ complaints to the Minister of Science and Technology. However, enterprises must wait. “We want a consensus in resolving this issue,” he added.
In short, golf course operator difficulties have yet to be satisfactorily resolved by competent bodies.
Thu Hang-Thi Van
Vietnamese
