Business

Strict tax rules frustrate businesses in pandemic aftermath

Regulations for business registration and tax, made to prevent bribery and tax evasion, back-fired on small businesses forced to close or delay operation by the Covid-19 pandemic.

Strict tax rules frustrate businesses in pandemic aftermath

Several companies in District 1, HCMC complained that their business codes got revoked by tax authorities because their temporarily closed facilities were deemed “abandoned” during the pandemic.
According to an official from District 1’s Tax Department, companies that leave their business locations are considered “high risk” in terms of tax evasion.
However, companies applying for legal re-opening must agree to use physical invoices issued by tax authorities for one year, which goes against policies encouraging the use of electronic invoices by the Ministry of Finance and the General Department of Taxation.
“E-billing with a tax authentic code would be a much better option to monitor legally liable companies in this case”, argued the public. The government have encouraged complete e-billing and online tax return to shorten procedures and minimize direct contact between citizens and tax officials to avoid bribery.
Additionally, companies based in District 1 when applying for re-opening must prove their business locations with a site lease contract, while this form had been made redundant decades ago to shorten the administrative process.
Meanwhile, a company established at the end of March 2020 was fined for not declaring their first quarter taxes, even though they did not start operations until April due to a pandemic delay.
Business insiders agree that municipal authorities should be more lenient during difficult times, and offer advice to newly established companies instead of straight up fining them for minor errors.

Han Ni - Translated by Tan Nghia

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