Firms busted for tax fraud

Multi-level marketing companies have been discovered indulging in tax fraud worth several billion Vietnamese dong and the sale of fake goods, the Ministry of Industry and Trade’s Competitive Management Department said.

After three months of investigations, the department on July 11 officially announced the inspection results at four companies including Lien ket tri thuc Company, Thang Long Franchise Company, Lien minh tieu dung Vietnam Company, and Lien ket Vietnam Company.

The inspection team, managed by the Ministry of Industry and Trade (MoIT) and police forces, uncovered several tax violations at the companies.

The team found that the Thang Long Franchise Company allowed their distribution agencies to receiving benefits which were not stipulated under the promotion campaigns. This violated regulations of multi-level trading.

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In addition, several distribution agencies which received commissions from the company had not been mentioned in the list submitted to the team.

“The company reported turnover lower than data from their agencies at VND34 billion. This indicates violation of tax laws,” the ministry said.

The inspection at Lien minh tieu dung Vietnam Company in northern Bac Ninh Province revealed that the company also violated tax regulations in calculating personal income tax for their staff. They did not report turnover of some distributors into the company’s total incomes.

The ministry added that the company had committed violations by not reporting turnover, invoice usage and use of incorrect accounting documents.

It also revealed that there were some unclear regulations on turnover calculations, resulting in misunderstanding and wrong applications at companies. The inspection team suggested that management agencies should have made suitable adjustments to ensure united applications at multi-level marketing firms.

Selling unchecked products

The ministry also revealed that the Thang Long Franchise Company advertised two functional foods including Thymo-Zin and Thymo Plus which have not been approved by management agencies. In addition, the two products have some incorrect ingredients and functions which do not match the certification granted by the Ministry of Health.

Its other eight functional products have labels which differ from their certifications.

“These violated regulations on advertisement of functional foods,” the ministry said.

The same situation has been seen at the Lien minh tieu dung Vietnam Company.

The ministry would provide the inspection results to relevant agencies for further investigations or punishment. The ministry asked the department to quickly resolve the violations relating to multi-level management.

However, the team has not conducted inspection results at three companies including Amway Vietnam Company, Unicity Marketing Company and Thien Ngoc Minh Uy which are considered big multi-level marketing firms in Vietnam.

The ministry said they have received several complaints from participants at the Thiên Ngọc Minh Uy Company. They established a team to conduct inspections while resolving each complaint. The ministry would announce the results soon.

They also planned to conduct a check-up team at the Amway Vietnam Company on July 18.

It added that the Unicity Marketing Vietnam Company is no longer under the inspection list as the ministry imposed a fine of VND110 million on the company.

The formation of the inspection team is the latest move by authorities to manage pyramid-type businesses in Vietnam after the Lien Ket Viet multi-level marketing firm was caught swindling about 60,000 people in more than 27 cities and provinces nationwide, appropriating a total of VND1.9 trillion since 2014.

VNS

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