Struggling Vietnamese companies that have failed to pay taxes want to put a stop to penal interest rates for missed tax payments.
Chairwoman Pham Thi Loan of the Viet A Group Holdings Co, which has businesses ranging from machinery to real estate, told Thanh Nien that she had never seen tax authorities this “aggressive” in collecting revenues.
She said tax payment extensions would not benefit struggling businesses because they were simply not making profits.
On the other hand, high interest rate charges as punishment for overdue tax payments were killing businesses, she warned.
Tax authorities impose an interest rate of 0.05 percent per day for the first 90 days on tax payments due from this year’s July 1, and the rate will rise to 0.07 afterwards.
Loan called it “miserable” for firms who are unable to pay income taxes and will even face higher payments, and said the penalty on tax payment failures should be done away with, or at least cut by halve.
Nguyen Van Duc, deputy general director of the Dat Lanh Real Estate, complained that the penalty was “too high,” and said the government should grant tax payment extensions rather than imposing punishment.
However, Loan and Duc both agreed that the state budget had come under shortfall pressure and suggested the government keep a closer eye on firms to detect those who deliberately delay or evade taxes and force them face heavy punishment.
On the other hand, the government should lend support to firms who genuinely need looser tax policies, they said.
Vietnam puts a 25 percent corporate rate on most firms. It will decrease the tariff to 22 percent starting next year to help businesses operating in a tough economy, which last year grew at the slowest pace in 13 years.
The country collected less than 67 percent of this year’s targeted tax revenues in the first nine months, a slow progress compared to the pace of nearly 80 percent over the past several years.
Finance Deputy Minister Vu Thi Mai said October 10 that collecting taxes was extremely difficult and worried that tax authorities would miss the annual target for the first time this year.
According to General Department of Taxation, less than a third of domestic business still declare monthly VAT tax, which means the rest of the funds are frozen.
Taxation Chief Bui Van Nam said the department was studying measures to extend tax payments and resolve long-overdue tax debts.
He said they were working on proposals to submit to the government soon.
Nam forecast looser policies on tax payments would burden the government further, but said it was a way to nurture the income source for the state budget in the long-term.
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