HCM City businesses cry foul as tax refunds take unconscionably long

He issued the order at a recent meeting after many businesses complained of being greatly vexed by tax offices' continued failure to refund taxes.

Vu Thi Hoai Son, CEO of food company Tan Nhat Huong, said her company has been waiting for more than two months for VND21 billion (US$928,000) worth tax refunds, and her almost daily visits to the local tax office have been in vain.

In response to Son's question about the delay, a manager from the tax office reportedly said the city's revenues were lower than expected this year due to the sharp decline in crude oil prices.

The finance ministry would provide VND1.7 trillion ($75.15 million) to the city, but since approved tax refunds totaled VND1.8 trillion, the city has prioritized projects of national importance and producers who export 100 % of their goods first, the manager was quoted as saying further.

An executive from farm producer and exporter Uniexport Co.,Ltd. also said his company’s refund of more than VND20 billion ($884,000) has been delayed since the beginning of this year.

Tuan assured businesses that the city still has over VND900 billion ($39.78 million) earmarked for tax refunds and that his ministry would protect their rights.

He said some businesses had to wait long to get their refunds possibly because they operate in sectors that require more scrutiny than others.

Some might have failed to furnish all the necessary documents to get the refunds, he speculated.

But he did not deny the possibility that some tax officials deliberately delayed payments to extract bribes, and promised that wrongdoers would be punished.

He said the General Department of Taxation is working to make public all applications for tax refunds by January 1 next year to keep businesses updated about their status and thus head off corruption.

'A lot of locks'

At the meeting, Ho Chi Minh City businesses also complained about inconsistent and unclear tax regulations.

Nguyen Van Be, chairman of the association for businesses in Ho Chi Minh City's economic zones, said while it is "progress" that tax authorities have begun to accept tax declarations online, businesses do not know how to make the declaration correctly, and the huge number of related legal documents and officials are of no help at all.

Businesses cannot run the gauntlet of possible mistakes in declarations, since that would entail huge fines even if they are detected many years later, he added.

Be also pointed to a "huge" failing in customs' recently-launched program to reduce red tape, the "national single window."

It aims to reduce customs clearance times through online paperwork, but it is still often time-consuming because businesses still have to get certificates from other agencies to clear shipments, he said.

For instance, it takes businesses one week to get a chemical test certificate in Hanoi, he said.

"It is a single window that has a lot of locks, and businesses have to run around to get keys."