Tax red tape holds firms back

Under its investment licence granted by Yen Bai People’s Committee dated January 11, 2006, Hung said the company would be exempted from corporate income tax (CIT) in the first four years of operation and only have to pay 5 per cent CIT in the next seven years and 10 per cent  in the following four years.

In addition, the Ministry of Finance’s (MoF) Circular 123/2012/TT-BTC on CIT dated February 27, 2012 specified that these incentives would continue to be applied in cases where mining enterprises which started operating before January 1, 2009 were enjoying CIT incentives under previous legal documents on CIT or under their investment licence or certificate of investment preferences.

“Thus, as R.K Marble Vietnam is a mining company which started operating before January 1, 2009, will we be ensured incentives included in our investment licence and Circular 123 or not?” Hung said. The  company also proposed to decrease the export tax for calcium carbonate powder, which is now at 10 per cent to support its business activity.

R.K Marble Vietnam is a wholly-owned subsidiary of R.K. Marble Private Limited.  It is recognised as the largest producer and processor of marble in India and a Guinness record holder as the world’s largest producer of marble.

Deputy MoF Minister Do Hoang Anh Tuan said if the company met the conditions on investment incentives under its investment licence and the people committee’s granting of the licence was legal, it would continue enjoying these incentives.

Tuan said during 2005-2006, some provinces had granted incentives to investors which exceeded the allowed levels, prompting the government to require some revisions. However, regarding R.K Marble Vietnam’s proposal on export tax reduction, Tuan said Vietnam’s government did not encourage raw mineral exporting, while calcium carbonate powder was not deep processing. “Therefore, 10 per cent is necessary to ensure mineral resource protection in Vietnam.”

Meanwhile, Canon Vietnam manager Dao Thi Thu Huyen proposed to remove material consumption standard reporting regulations in the production process. “For large-scale export processing enterprises such as Canon and Samsung, the material consumption is too big to exactly calculate the standards,” Huyen said.

Pham Thi Loan, chairwoman of Viet A Investment Commercial Industrial Group Holdings Company, said one pressing matter for enterprises currently was unreasonable tax tariffs. “Many goods which cannot be produced domestically are now subject to the import tax rate of 20-25 per cent. Therefore, the MoF should consider and check up to reduce this tax rate to zero per cent,” said Loan.

“Besides, in some cases there is misunderstanding on the side of customs agencies in applying tax rates. For example, a type of goods must be applied a tax rate of zero per cent under existing regulations but the customs agencies imposed a rate of 15 per cent,” she added.

Nguyen Duy Mao, chief accountant of Khanh Viet Holding Company, said enterprises welcomed positive changes to Decree 69/2012/ND-CP effective from November 15, 2012 to revise some articles under Decree 67/2011/ND-CP effective from January 1, 2012.

According to Decree 69, free environment protection tax will be applied for nylon plastic bags which are friendly with the environment under the regulation of Ministry of Natural Resources and Environment and bags included products inside.

However, Mao said the company proposed to apply tax exempted from January 1, 2012 as the effective date of previously Decree 67, instead of until November 15, 2012 as Decree 69.