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Cumbersome Tax Procedures Cost Businesses Dear: Study

Tax formalities consume an unseemly amount of Vietnamese businesses’ energy and time as they spend 1,900 hours a year on red tape, a study has found.

Of 360 businesses polled by the Central Institute for Economic Management (CIEM), 64 percent had to depute up to two employees just for registering their tax codes.

Ten percent had to send four employees for a task which is apparently more burdensome than changing name, location, or mode of business.

Value-added tax was another bugbear with the businesses spending some 1,732 hours a year struggling with it.

Corporate tax assessment also lasted long and wasted much time.

The study found that an average Vietnamese business has to spend 1,959 hours per year, or 245 working days, on tax formalities.

Reasons

An expert blamed the problem on superfluous paperwork, saying 88 percent of businesses complained it was time-consuming.

But he also slammed the failure of businesses to use IT or accounting software to help expedite their tax work.

Insufficient coordination between tax agencies and businesses saw the former often failing to inform the latter about new tax forms.

A lot of time was thus wasted on refilling invoices.

Tax policies too were to blame since the new Tax Management Law required businesses to declare taxes every quarter instead of annually unlike earlier.

One company complained about the frequent changes in tax decrees and regulations.

Another slammed the complicated tax returns and suggested that the government should allow businesses to file them online.

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