VietNamNet Bridge - Textile & garment companies have to pay many kinds of fees and taxes, including “under-the-table” fees to be able to go faster on rough roads where there are many check points.

The director of a garment company said he has to pay $400 for one container of exports to be carried from Hanoi to Hai Phong City. Meanwhile, it takes $100 only to carry the container from Hai Phong City to Japan.

“$400 is the sum of money paid for many types of fee, including unofficial fees,” he said, adding that unofficial fees burden his business.

Deputy chair of the Vietnam Textile and Apparel Association (Vinatas) Pham Xuan Hong confirmed that the fees exist in reality.

Hong said there was no basis defining service fees, and powerful service providers have the right to set fees. They try to raise fees, reasoning the increases in input costs. 

“Transport service providers say they have to charge high because of high input costs. But there is no arbitrator who can say if they tell the truth,” he explained.

Textile & garment companies have to pay many kinds of fees and taxes, including “under-the-table” fees to be able to go faster on rough roads where there are many check points.

Hong, who is also a businessman, said that of unofficial expenses, the ‘lubricant fee’, or the fee paid to ‘lubricate’ state agency apparatus, is high. 

There are two types of ‘lubricant fee’. First, if businesses want everything to go smoothly through state agencies, they will have to pay normal lubricant fee. Second, if businesses want to ‘worm their way through a crowd’, or ‘dodge the laws’ they will have to pay special lubricant fee.

Garment & textile enterprises, for example, complain about the smuggling of cloth and input materials from China. Those who smuggle the products have to pay the special lubricant fee.

Smugglers can sell products at lower prices than the importers who have to pay tax. 

Therefore, Hong pointed out that the national economy will have to pay a heavy price for the underground fee, because this leads to unhealthy competition.

“Nowadays, since state officials receive salaries which are not high enough to cover their basic needs, they try to get money from all possible sources,” he said. 

Therefore, Hong said, administrative reform should be the ‘long-term story’. In the immediate time, businesses have to spend time on other problems.

“Enterprises complain that the high trade union fee and social insurance premiums have been burdening them,” Hong said, adding that in Myanmar, insurance and healthcare premiums are just 5 percent, while they are 30 percent in Vietnam.


TBKTSG