Hanoi Tax Authorities Hold Dialogue with Businesses

Mr Phi Van Tuan, Director of the Hanoi Department of Taxation, said: The event helps businesses to learn more about tax policy implementation and difficulties in implementation, propose amendments and supplements to current policies, and correct mistakes and wrongdoings. Besides, in the context of current economic difficulties, many companies are undergoing stagnant production and business operations, and this dialogue with the tax authorities aims to actively support businesses.

 

The conference received nearly 100 pages of more than 170 questions, mainly concerning problems in implementation of tax policies and administrative procedures. These questions were answered by the General Department of Taxation and the Hanoi Department of Taxation.

 

Many questions related to the Government’s Resolution 13 issued on May 10, 2012 which included value-added tax deferral, corporate income tax reduction, and land rent reduction. Representatives of the Hanoi Department of Taxation provided more information about this new resolution. Remarkably, VAT payment will be deferred three months. This can be considered a form of indirect lending interest support for companies. Given the popular lending rate of 15 percent per annum, their interest expenses will be slashed by over VND902 billion. According to the resolution, VAT arising in April, May and June will be delayed six months. Beneficiaries are small and medium-sized enterprises (SMEs) not operating in lottery, securities, finance, banking, insurance and luxury business sectors.

 

The Hanoi tax authorities said the definition of SMEs is provided in Circular 154 of the Ministry of Finance. The ministry will issue a circular to detail instructions for the implementation of the Government Resolution on a number of measures to ease the difficulties of businesses and support the market.

 

However, businesses do not really understand these criteria for policy preferences. Vu Dinh Nhiem, Director of Z179 Engineering Co., Ltd, said tax policies still need to be amended. He posed as an example, “Why is a piece of equipment or tool that serves rice harvesting - a field of agriculture - levied 10-percent VAT when it is sold to farmers? Meanwhile, according to Circular 129/2008/TT-BTC of the Ministry of Finance, machinery and equipment exclusively used for agricultural production, including plows, harrows, seeders and rice threshers, are imposed 5-percent VAT. This difference forces producers to maintain selling prices and farmers will be at a loss at that time. Thus, tax authorities need to have quick adjustments. At present, the agricultural equipment market is fiercely competitive. If tax policies are not quickly amended, domestic producers will give up this market to Chinese products.”

 

Mr Phi Van Tuan, Director of Hanoi Department of Taxation, said: The department will send an official report on businesses enjoying tax relief to the General Department of Taxation. The department will report land rent reduction to the Hanoi People’s Committee for determination, with expected payment deferment of 12 months.