VietNamNet Bridge – The General Department of Taxation (GDT) has said that tax payment procedures in Vietnam are not as bad as assessed by the World Bank (WB), although taxpayers complain they are worse than ever.

The 2013 Doing Business report released by the World Bank pointed out that Vietnamese taxpayers have to spend 872 hours a year, or 100 working days, on tax declarations and payments, which are four times higher than the average level for businesses in Asia Pacific.

Meanwhile, the numbers of hours that businesses in neighboring countries have to spend on procedures are much lower – 259 hours in Indonesia, 264 in Thailand, 193 in the Philippines, 133 in Malaysia and 82 in Singapore.

Bui Van Nam, General Director of GDT, has voiced his disagreement about the report, saying that he believes the tax procedures as not as bad as described in the WB’s report.

Nam said the report was compiled with information that two years old. Meanwhile, considerable improvement in the procedures has been made over the last two years.

The WB, when calculating the time businesses have to spend on tax and customs procedures, counted the hours businesses need to spend on procedures for social insurance, healthcare insurance and unemployment.

Nam said it was estimated that businesses consume 335 hours a year on social insurance formalities, and 537 hours on tax procedures, which includes 217 hours on corporate income tax and 320 hours on value added tax (VAT).

However, Nam admitted that 537 hours for tax procedures remains very high if compared with other ASEAN countries.

When asked about the “considerable improvement” in the tax procedures over the last two years, he said the Taxation Department had thoroughly analyzed the WB’s reports and worked with WB and IFC (International Finance Corporation) experts on solutions to improve the situation.

From 2009-2010, the WB and IFC reports said Vietnamese taxpayers spent 1,050 hours on tax declarations and payments. The figure fell to 941 hours the next year and then to 872 hours.

The businesses with revenue of up to VND20 billion only have to pay tax four times a year instead of 12 times.    

Since 2009, Vietnam has been focusing on building and developing an e-tax system.

To date, 366,000 businesses, or 76 percent of businesses, have joined the system, while the figure is expected to rise to 90 percent in 2014.

The government of Vietnam, in Resolution No 19 released in March, requested a strong reform of the business environment by reducing the time required for tax procedures to 171 hours a year.

The figure is equal to the average level in the region, or 700 hours lower than the recently announced level.

In order to reach that goal, Nam said taxation bodies need to speed up reform five times faster than the reform in 2011-2012.

However, taxpayers say there has been no considerable progress in the tax declaration and payment procedures in recent years.

“I agree with Nam that tax procedures in Vietnam are not as bad as described in the WB’s report. In reality, they are worse,” said Thu Huong, an accountant who works at a joint stock company in Hanoi.

Kim Chi