Businesses suffer heavy losses due to disruption in VAT refund cash flow

Delegate Tran Van Lam ( Bac Giang delegation) discussed.

Speaking at the discussion session, delegate Tran Van Lam (Bac Giang delegation) said that many budget collection policies have shown backwardness and inadequacies but have been slow to be reviewed and adjusted. The delegate said that the current personal income tax with regulations on starting point of taxable income, progressive division, and family deduction levels are not updated according to fluctuations in minimum wage, prices, and inflation, and has content that is decades out of date.

“Although VAT revenue is large, the refund amount is also large. The collection process is complicated and costly, taking place at many intermediate stages; collection, deduction, and refund; collection costs, refund costs, and the budget result is not much. This process also increases the risk of violations, fraud, and budget loss, which needs to be considered and fundamentally resolved,” said delegate Tran Van Lam.

Also interested in and discussing VAT, delegate Nguyen Thi Thu Ha ( Quang Ninh delegation) expressed her agreement with delegate Tran Van Lam's opinion on the issue of VAT refund. The delegate said that recently, the problem of congestion and backlog of VAT refunds has caused businesses and some industry associations to send petitions and calls for help.

“The systematic bottlenecks in tax refunds for some export product groups stem from the General Department of Taxation’s professional guidance documents, which have inappropriate points, lack a solid legal basis, lack feasibility, and lack close coordination with relevant agencies,” said the delegate from the Quang Ninh delegation, adding that in reality, businesses have suffered heavy losses due to the disruption of VAT refund cash flow, affecting workers and the state budget.

From the above reality, delegate Nguyen Thi Thu Ha suggested that the Government pay attention and urgently direct the review and streamlining of administrative procedures; the Ministry of Finance remove obstacles from specialized documents, solve difficulties for businesses by the method of "refund first, check later" VAT for reputable and quality exporting enterprises, accepting the legality of customs declarations...

Minister of Finance Ho Duc Phoc spoke at the meeting.

Regarding VAT refunds, in a clarification speech at the discussion session, Minister of Finance Ho Duc Phoc said that up to now, 92% of VAT has been refunded; 14,857 cases have been resolved, and 534 tax refunds are being processed with a total amount of more than VND9,154 billion. Regarding problems in VAT refunds, the Minister said that the conditions for tax refunds must include invoices and money transfer documents, and for import-export enterprises, there must also be contracts and customs declarations.

“Some of the current problems are due to the Ministry verifying abroad and the tax authorities of the host country said that this enterprise does not exist. Therefore, the contract is invalid, leading to no VAT refund,” said the Minister.

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