Foreign firms seek consistency

Thien Thanh Sanitaryware joint company

Foreign firms seek consistency

Inconsistencies in investment incentives have been one of the concerns for foreign direct investment (FDI) enterprises, participants heard at a conference on tax policies held in Ha Noi on Tuesday.

Participants at the conference called to discuss updates on tax policies, said there was a difference among localities in applying preferential treatment for investors despite being under the same legal system.

According to the Law on Investment, the agencies granting investment licences to FDI businesses have the right to decide the tax preferential levels. However, after a few years of investment, provincial taxation departments believed that the tax preferential levels were too high.

The firms wondered whether they should follow the Law on Investment or the tax law.

Responding to the question, Pham Dinh Thi, director of the General Department of Taxation's Tax Policies Office said there was a difference between the two laws and they have resolved the issue as per the circumstances.

Huong Vu, deputy general director of tax and advisory services at EY Viet Nam said the conflict between the two laws would not only cause problems for businesses but also reduce the attractiveness of Viet Nam's investment environment.

"The Law on Investment highly appreciates the Government's commitments to investors. Investment protection has been the country's trust issue toward investors," Vu added.

She said that tax policies have been continuously and actively improved over the past two years, facilitating enterprises. However, the implementation has seen some shortcomings.

Several new regulations and instructions were promulgated in the year of 2015, which affected the operations of businesses.

Vu said that the reduction of administrative procedures would create favourable conditions for companies in implementing their tax duties, improving effectiveness of tax self-declaration as well as providing a better investment environment to investors.

In reality, several tax officers have not adapted to the changes of policies and were asking companies for procedures which had been abolished, she said.

Enterprises also said that there was a differentiation between specialists and workers in tax deduction for house leasing and building.

They asked the finance ministry to review and stipulate the ceiling cost for house leasing of specialists.

The conference was co-organised by the Viet Nam Chamber of Commerce and Industry and EY Viet Nam to update regulations and policies which would help businesses have an overall and more effective view in tax planning and risk management, and they could take advantage of the integration.

Tax specialists also shared their experiences in tax management, checks and complaints.

The event attracted the participation of more than 300 FDI firms. — VNS