Tea tax evaders are uncovered

The Lam Dong Tax Bureau has asked local foreign invested tea enterprises, which had been found shirking corporate income tax payments, to pay back VND8 billion ($400,000). Among those, HaiYih company will need to pay  VND541 million ($27,000), King Lo VND421 million ($21,000) and TFP Vietnam VND329 million ($16,450).

“This is the first time during 10 years the foreign tea investors in the province will have to pay tax to the  national budget,” said the bureau deputy head Phan Thi Vinh.

“Although the proposed tax payments are small, it is a critical success,” she added.

As of December 10, Lam Dong had 114 foreign-invested projects working in many sectors. Of which, 17 were in manufacturing, trading and export of Olong tea in Dalat, Bao Loc, Bao Lam and Di Linh districts.

Vinh said all foreign-invested tea enterprises  in the province would have been exempt from tax, under law, if they had not made a profit.

In fact, many of them have been operating for a decade and not paid any tax to the national budget.

The bureau also said some domestic companies that had not received any preferential duties were still operating successfully, while some foreign invested  firms which enjoyed tax exemptions continued to announce losses.

“If we cannot tackle the continuous losses of those foreign investors, they will continue to benefit without contributing any money to the budget,” said Vinh.

In early 2010, the tax bureau formed a team to survey foreign invested tea enterprises in the province. A profile was formed of each firm, based on export contracts and accounting reports.

The results showed that the surveyed enterprises’ export prices to Taiwan was $2.8-4 per kilogramme of tea products, lower than the manufacturing prices of $8-9 per kilogramme.

The finished products, after being exported to the mother companies, were divided into small parts with new labels and new much higher prices.

The bureau also uncovered that those foreign invested tea enterprises enjoyed prices of $5.5-11.6 per kilogramme, twice as much as previously reported prices.