Taxes, fees squeezing out businesses’ strength

Taxes, fees squeezing out businesses’ strength

 A lot of kinds of taxes make businesses suffocate, while tens of different types of fees make them exhausted.

It is estimated that there are over 10 types of fees that import-export companies have to bear. Pham Xuan Hong, General Director of the Saigon 3 Garment Company, said he cannot remember all the types of fees, adding that the company’s total spending on fees of different types has increased by 20 percent in comparison with 2011. Especially, some kinds of fees have increased by 50 percent.

Billions of dong spent on fees

Foreign shipping firms, which are dominating the domestic shipping market, have eased the freights, but have imposed a lot of new fees and additional charges.

Head of the Import-Export Division of a garment company said his company has to pay more than 10 types of regular fees when exporting a 20 feet container. Besides, it can also be imposed with some unexpected kinds of fees, including the fire prevent charge, monetary surcharge, or strike fee which is imposed when carrying goods to the territory where strikes occur regularly.

In case enterprises are late in paying fee to shipping firms, they would have to pay the storage fee additionally. In total, the company would have to pay some 300 dollars in fees to export or import a 20 feet container.

As such, the company has to pay 288,000 dollars a year, or 24,000 dollars a month in fees alone, if noting that it imports and exports 80 containers a month.

In many cases, businesses feel as if they have their pockets picked as they have to pay a lot of unreasonable fees. Seafood exporters, for example, complain that the management agencies take samples for testing as a condition for granting export certificate.

Meanwhile, according to the Vietnam Association of Seafood Exporters and Producers (VASEP), if every consignment is examined, enterprises would have to pay 5-15 million dong for testing fee for every container of seafood exports.

VASEP’s Secretary General Truong Dinh Hoe has affirmed that the 100 percent examination is not necessary. Hoe said instead of inspecting every consignment, the watchdog agency should monitor the production process to help businesses minimize spending.

Meanwhile, enterprises have been requested to have sample tested in more and more categories, with the fees between tens of thousands of dong and 600,000-700,000 dong.

Besides the official fees made public by state management agencies, enterprises also have to pay many other nameless kinds of fees, especially for advertisements.

For example, in order to obtain the license to install a billboard, ad firms have to get the nods from some 10 state management agencies. And in order to “go through” the 10 “doors”, they have to give “envelops” with money inside to the “door security guards.”

Director of an ad firm in HCM City said that in order to install a billboard (2x2.5 meters) on Le Loi Road in district 1, enterprises would have to spend 25,000 dollars a year, 50 percent of which is “unofficial expenses.”

When enterprises have to pay high input costs, they would set up high sale prices to ensure their profits. As a result, consumers have to pay high for products, and the demand turns weak because of the expenses goods.

Vo Tri Thanh, Deputy Head of the Central Institute for Economic Management CIEM, said the government is considering all kinds of taxes and fees, and that it is very likely that the corporate income tax would be lowered first.

Thanh said it would be better to ease the tax by five percent to 20 percent, and ease the VAT from 10 percent to 7-8 percent.

vietnamnet