Vietnam businesses plan legal action for delayed tax refunds

By Hong Suong, Thanh Nien News

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Representatives of businesses at a tax office in Hanoi. Photo: Ngoc Thang Representatives of businesses at a tax office in Hanoi. Photo: Ngoc Thang

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At least one company in Vietnam has said it is finishing procedures to take legal action against a local tax office, while many others have said they too will take the tax authorities to court if they fail to pay them as promised recently by the finance ministry.
Speaking to Thanh Nien, a spokesperson for Nghe Thang wood processing company in the southern province of Binh Duong said the firm plans to file a lawsuit against the tax office in Thuan An town, which owes it tax refunds of around VND4 billion (US$179,400).
The office rejected Nghe Thang's refund demand at the end of 2014, claiming the company operates in the wood processing industry, which is not allowed in Binh Duong.
But the spokesperson said the company is licensed and has never been punished by local authorities for operating in a prohibited sector. He said his company has done everything to prove that it runs a legitimate business, but has still been refused the refund.
"We only want to do business without getting into any trouble, but the tax office has been forcing us to take legal action," he said. "If we do not take it to court, we will lose all the tax refunds unjustly."
Many other businesses, on the other hand, are waiting to see how their tax offices are going to handle their cases after the Ministry of Finance promised last week to eliminate "shortcomings" in existing rules so that businesses can get their money as soon as possible.
Dinh Cong Khuong, director of Ho Chi Minh City-based steel company Khuong Mai, said if authorities again fail to pay, a lawsuit would be the next option.
Khuong said his company's tax refunds have piled up to VND200 billion ($8.97 million) over the past five years after its requests for payment were rejected for "ridiculous" reasons such as incorrect information about transport vehicles and excessive stockpiles.
Since procedures for claiming tax refunds are "hellish," Khuong Mai has recently stopped exports and now focuses on selling domestically instead, he said.
Speaking at a press conference Friday, Deputy Finance Minister Do Hoang Anh Tuan said 287 businesses around the country are still waiting for their tax refunds.
While the businesses are at fault for failing to complete necessary paperwork for claiming the refunds, the delays are also caused by shortcomings in existing rules, he said.
The laws do not allow businesses that default on tax payments to get tax refunds though they could have used the refunds to set off their back taxes, he said.
The policy would be revised soon, possibly this week, and it would benefit more than 20 businesses, he said.
The deputy minister also promised to review the distribution of funds for tax refunds, as many local governments lack funds for them while others have surpluses.
He assured that his ministry has enough resources to make all refunds.

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