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Business Beat
Business Beat. . Scandalous frauds in value-added tax VAT refunds have resulted in an easy solution from tax authorities: a temporary halt of the refund for businesses trading agricultural products, including foods and fisheries. Previously, companies could buy products from farmers, without invoices, and claim refunds for their declared purchases. This has been a big loophole for tax frauds – bogus companies were set up and claimed refunds for non-existing purchases. In the past three-and-a-half years, tax authorities have discovered illegal refunds worth VND432 billion, or 3.2 per cent of all refunds. In a proposal, the General Tax Department suggested either this kind of refund is abolished or the amount is reduced to 1 instead of 2 per cent. The VAT law passed by the National Assembly says refunds should be between 1 and 5 per cent. Therefore, any attempt to remove it should be approved by the National Assembly, and not the Government. Pending a final decision, tax authorities are designing measures to fight tax frauds. Refunds are only issued after all documents have been verified and not before. Also, the time limit tax agencies have to complete refunds will be lengthened, without penalty for delayed refunds. It would be a shame if several swindlers could derail a tax system and bring unnecessary difficulties to law-abiding companies. A simple requirement could thwart any fraud attempts – asking exporters to channel payments through banks, including border trade.. ***. ...

09/08/2002

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