VietNamNet Bridge – The State, in an effort to encourage the development of private schools in a program on education socialization, promised to offer some investment incentives. However, the schools complain they have to pay overly high taxes.

Lac Hong people-founded university.

The tax incentives for people founded schools have been stipulated in a series of legal documents at different levels, from the government decree to government decision. The documents were issued in the years from 2005 to 2008.

However, people founded schools, especially the ones set up prior to 2008, had not enjoyed the tax incentives by May 6, 2013. They still have to pay the corporate income tax of 25 percent, like other businesses.

The problem lies in the Ministry of Finance’s Dispatch No. 11660 released in August 2009, guiding the implementation of the Decree No. 69/2008. The document said the schools must have the land area of 55 square meters per student at minimum to be able to enjoy the tax incentives.

The requirement on the 55 square meters per student proves to be unattainable for the majority of schools. Experts also said that the requirement is unreasonable, because even the big state owned schools which receive land allocation from the State also cannot meet the requirement.

The Ministry of Finance, hearing the complaints from people founded schools about the requirement, in 2011 sent a dispatch to relevant ministries, requesting the ministries to reconsider the issue and make suggestions.

The dispatch had not got the replies from the relevant ministries, while the new document with the expected amendment had been made by the end of April 2013. The presidents of some people founded schools thought that the Ministry of Finance’s dispatch could not catch the attention from the other ministries.

In July 2012, the Association of Non-state owned School, once again, lodged a complaint about the tax incentives to the Prime Minister and relevant ministries.

In the latest news, in May 2013, the Prime Minister released a new decision with some amendments regarding the requirements on the training scale, quality and material facilities.

As such, only after five years, have the people founded schools begun enjoyed the tax incentives as stipulated in the legal documents. And they had to pay the high tax rate of 25 percent in the last five years. Meanwhile, in principle, 15 percent of schools only have to pay the tax rate of 10 percent.

There are some 80 people founded universities (4-5 year training) and junior colleges (3-year training) in Vietnam. This must be a huge sum of money the 80 schools have lost due to the tax payment over the last 5 years. Meanwhile, they could have used the sum of money for necessary investments to upgrade their schools.

People founded schools have recently raised a question about the professionalism and the responsibility of ministries and branches. The legal documents which are no longer valid still have been applied to by the state management agencies.

In April 1995, the Ministry of Construction released the Circular No. 12 on the standards for construction techniques. The document later became no longer valid, which was replaced 4 times by 4 other documents.

However, the regulations in the Circular 12 were still repeated in the Prime Minister’s Decision No. 1466 in 2008 stipulating the requirements on the units which implement the education socialization program.  The Decision was signed by the Prime Minister after reaching the consensus from the 7 relevant ministries.

GDVN