Korean groups call for tax processes to be timely ironed out

Korean groups call for tax processes to be timely ironed out

Ho Chi Minh City authorities are rushing to solve obstacles related to tax and land for on-site export goods, as well as standards for applying port infrastructure fees to foreign investors.

In a dialogue with South Korean enterprises event held last week in Ho Chi Minh City, Vo Van Hoan, Vice Chairman of Ho Chi Minh City People’s Committee, said that the city deeply considers the success of businesses as a driving force to continuously improve the investment environment in the area.

“Ho Chi Minh City sees great potential in comprehensive cooperation with South Korea, and hopes that through this conference and other forums, the business community in localities will work together to build new models and methods of cooperation in investment, trade and tourism, suitable to the needs and strengths of each side,” Hoan said.

According to Kim Nyoun Ho, chairman of the Korean Chamber of Commerce in Vietnam, although some businesses have received VAT refunds, there are also cases where large exporting businesses are still experiencing delays.

“However, the delay in VAT refunds related to on-site export activities is putting domestic supporting businesses at a disadvantage when competing on price with foreign importers. This could affect the development of Vietnam’s manufacturing industry,” said Ho.

“A quick tax refund policy is an important factor for businesses to be able to flexibly rotate capital and expand investment,” Ho added.

South Korean businesses also said that companies that temporarily import packaging materials for production and then export are charged higher fees for using seaport infrastructure than in the past, even having to pay compensation to make up for the previous difference.

“This causes a great burden on business production and investment plans, and leads to concerns about reduced competitiveness due to increased export costs,” explained Ho.

Therefore, the impacted businesses have suggested Ho Chi Minh City improve the tax refund process and review the fees for using seaport infrastructure to reduce the burden on exporting businesses.

To simplify investment licensing procedures, South Korean enterprises have also proposed the establishment of an integrated administrative management system for foreign investors to shorten the procedural process and improve the efficiency of attracting investment.

Kim Se Won, general director of CJ Foods Vietnam, complained that the company had not been granted a certificate of land use rights, building ownership, and assets attached to the land for its Hiep Phuoc factory, although the company signed a land lease contract with Hiep Phuoc Industrial Park in 2017.

CJ Foods Vietnam invested over $100 million to build the factory and completed and put it into operation in 2018. However, because it has not been granted a certificate of land use rights, the company has not yet received a VAT refund for its investment in building the factory.

Furthermore, in 2020, the factory was completely burned down and CJ Foods had difficulties in rebuilding the factory because it did not have a certificate of land use rights.

“We hope that Ho Chi Minh City People’s Committee will support the issuance of the relveant documentation as soon as possible so that we can receive a VAT refund, ensure the rights of investors and improve capital flow for business operations and expand investment,” said Won.

Receiving the recommendations of South Korean enterprises, Vice Chairman Hoan asked local departments of finance, tax, customs, and natural resources to actively review all outstanding issues of enterprises and to inform them of the progress of solving them.

“All issues must be thoroughly resolved at once, and not delayed until the next dialogue session,” Hoan said.

VIR