Foreign investors suggest improvements to Vietnamese taxation policy
Foreign investors suggest improvements to Vietnamese taxation policy
In the framework of Vietnam Business Forum (VBF) 2017, representatives of foreign investors complained that they still face difficulties in investing and manufacturing in Vietnam due to the lackluster taxation policies.
According to Natasha Ansell, chairwoman of American Chamber of Commerce in Vietnam (Amcham), importing products into Vietnam remains more costly and complicated given Vietnam’s $32-billion trade surplus towards the US last year, thus, it is particularly important for Vietnam to be seen as seriously addressing the numerous non-tariff technical barriers and the so-called behind-the-border barriers which restrict the activities of companies and hamper the flow of US exports into Vietnam.
Regarding the Ministry of Industry and Trade (MoIT)’s proposal to apply a special consumption taxation (SCT) of 10 or 20 per cent on soft drinks, the representative of Amcham expressed concerns about its impact on enterprises’ revenue and profit.
“If MoIT’s proposal comes true, the selling price of soft drinks will increase by 12 per cent due to the increased manufacturing expenditure, leading decreasing sales. In this case, small- and medium-d enterprises will see the largest impact because of their weaker financial potential. They may even face bankruptcy,” Ansell stated.
Based on comments from European enterprises, vice chairman of European Chamber of Commerce in Vietnam (Eurocham) Tomaso Andreatta expressed that the responses from tax authorities (both local and central tax offices) to written requests for clarification have been very general and do not provide specific guidance to enterprises.
As a result, after receiving the responses from the tax authorities, the enterprises are still be confused and unsure about applying the regulations. Enterprises are growing disappointed about the transparency of the tax authorities’ implementation of the regulation. Thus, it is important to improve the quality of responses from the tax authorities, especially the ones addressing concerns over tax policies.
