Int'l Tourists Complain about Vietnam's Tax

One of the things that foreign visitors dislike in Vietnam is they have to pay value added tax (VAT) of 10 per cent for goods they buy. The fact has made tourists unlikely to come back to Vietnam.

 

The Vietnam National Administration of Tourism (VNAT) recently organized a seminar entitled “Policy to encourage on-the-spot export through tourism” to seek answers for the above issue.

 

According to Do Minh Tuan, Vice Head of the VNAT’s Planning and Finance Department, Vietnam currently has three VAT rates, 0 per cent, 5 per cent and 10 per cent. VAT rate in tourism in Vietnam is 10 per cent, except for transport service with 5 per cent. 0 per cent is only applied for export goods.

 

Many said that international visitors purchasing goods in Vietnam is an effective form of on-the-spot export. VNAT’s surveys show foreign visitors stay in Vietnam for an average of nine day/visitor and they spend US$72.5/day. Thus, turnover from foreign tourists in 2006 was US$2.85 billion.

 

According to the State Bank of Vietnam, tourism service export grew at the highest speed among other service fields in recent years, and it only ranks after transport, financial, insurance and post - telecommunication.

 

However, Vietnam doesn’t have any regulations on on-the-spot tourism export. The current VAT regulations still contain some points that affect the competitiveness of Vietnam’s tourism industry.

 

At VNAT’s seminar, many participants said that, like VAT, the luxury tax also makes the price of goods with this kind of tax higher, which lowers international visitors’ spending.

 

“It is necessary to adjust VAT rates so foreign tourists can enjoy preferences like exporters to ensure equality in the tax policy and encourage tourists to purchase more goods in Vietnam. The adjustment of VAT is more urgent when Vietnam has become a member of WTO,” said Nguyen Thinh Lam, Vice Head of the Planning and Investment Department of the Ministry of Trade.

 

“We can do it. We ought to have done it long ago, but it is better late than never,” he added.