Removing obstacles to value added tax refund

According to the General Department of Taxation's report, in the first 11 months of this year, tax authorities have issued 17,300 VAT refund decisions with a total refund amount of nearly VND132,000 billion.

About 39,000 billion VND has not been collected yet. VAT refund according to this year's budget. No tax refund when importing raw materials locally. Cannot refund tax because the partner is closed. There are regulations to prevent tax fraud and profiteering from buying and selling invoices. But many legitimate businesses have hundreds of billions of dong in cash flow blocked. Draft Law on Tax Administration It is expected to be amended and supplemented in 2025 with proposals on responsibility and decentralization in tax refunds, and removing obstacles to value-added tax refunds.

The story of slow VAT refunds continues to be the focus of the recent 2024 Conference on Tax and Customs Policy and Procedures. There are businesses whose un-refunded tax amounts to hundreds of billions of VND. Or there are businesses whose tax refunds have lasted for 5 years. One of the reasons is that the tax refund application files include input purchase invoices of businesses that have ceased operations.

Businesses face difficulties due to delayed tax refunds

One of the reasons is that in the tax refund application files there are input purchase invoices of businesses that have stopped operating.

The company has had to temporarily stop some production lines due to lack of money to buy raw materials. Of the 142 billion VND that the company requested for tax refund, the Tax Department currently believes that over 50 billion VND of input invoices are illegal and may have to be transferred to the police for investigation.

Mr. Dau Duc Anh - Deputy Director of Dong Nai Tax Department said: "The goods purchased for scrap copper mostly use invoices from businesses that are not operating at the tax registration address. Taxpayers have stopped operating but have not completed the procedures to terminate the validity of tax codes or temporarily suspend business for a period of time".

"When we checked the transaction and the bank checked on the General Department of Taxation's information portal, they were still operating normally, so we could not control it. We request the Dong Nai Provincial Tax Department to refund first and check later. After refunding, if there are signs of violations, we will collect the tax," said Mr. Nguyen Thanh - Director of LiOA Dong Nai Electrical Equipment Company.

A series of companies in the rubber, plastic, wood, and cassava industries said they are also facing difficulties in cash flow because they have not received VAT refunds, amounting to tens and hundreds of billions of VND. It is worth noting that although this problem has been going on for a long time and has been petitioned by many associations and businesses many times, it has not been resolved.

Mr. Nguyen Minh Thien - Deputy General Director of Casumina Company said: "We have a lot of difficulty in using our capital. The more we export, the more capital we have to repay. Therefore, we will not have enough capital to do it, because the bank only gives us a certain limit."

Regarding tax refunds, according to the General Department of Taxation, in the first 11 months of this year, the tax authority has issued 17,300 VAT refund decisions with a total refund amount of nearly 132,000 billion VND, equal to 77% of the estimated VAT refund this year. About 39,000 billion VND in tax has not been refunded yet. One of the reasons given is the implementation process.

Decentralization and delegation of authority to shorten tax refund time

The draft revised Law on Tax Administration has proposed adding two more levels, namely branches and large enterprise tax departments, to refund taxes to businesses, which will help speed up the tax refund process.

While tax collection is highly decentralized. There are up to 3 levels to collect taxes: tax branches, tax departments, and large enterprise tax departments, tax refunds are only assigned to the tax department. This leads to a large number of tax refund files being piled up at the tax department, causing tax refunds to sometimes be delayed.

The draft revised Law on Tax Administration has proposed adding two more levels, namely the branch offices and the large enterprise tax department, to refund taxes to enterprises. This is expected to help speed up the tax refund process for enterprises.

A representative of the Ministry of Finance said that if the proposal is approved, inspection measures will be strengthened so that tax refunds are carried out in accordance with the law.

Mr. Nguyen Duc Chi - Deputy Minister of Finance said: "When decentralizing, we will strengthen solutions for inspection and supervision of the implementation process of tax branches. At the same time, improve the capacity of tax officers at the branches to implement it correctly, in accordance with the provisions of the law in tax refunds, avoiding risks arising and profiteering in tax refunds".

When decentralizing to the competent tax departments to review and refund tax for tax records that they are assigned to manage, it will create conditions to shorten the time for reviewing tax refunds. Faster tax refunds are what any business desires. Because if tax refunds are received early, businesses will soon have cash flow to put into production and business.

If a business has all the legal documents required by law but is late in refunding taxes, it means that the business's capital is being appropriated. There are businesses whose source of money due to late tax refunds is up to hundreds of billions of dong, the damage is immeasurable but the business can only wait. On the contrary, if the business is overdue, it will be fined with interest, and if it has not paid on time, it is very likely that it will be banned from leaving the country. Businesses only know how to produce and do business according to the law, if the suppliers later close down or violate the law, it is beyond the understanding of the business, to verify is the job of the investigation agency. The regulations are to prevent commercial fraud and profiteering from value added tax refunds, but how to do it, it is necessary to ensure fairness and objectivity for businesses doing business honestly.

Source: https://baoquangninh.vn/go-vuong-hoan-thue-gia-tri-gia-tang-3335160.html