IT businesses struggle to keep up with ever-changing policies

HCM CITY (Biz Hub) — HCM City-based information technology companies complained about arbitrary changes in regulations that caused them huge losses to officials from the Ministry of Information and Communications and local authorities at a meeting on Wednesday and demanded better protection from official capriciousness.

Dang Van Quan of CMC Sai Gon Company said last year his company had imported PCs and laptops as usual when suddenly the tax department had demanded additional “bidder tax” of VND11 billion (US$510,000) to be paid within one day.

“We didn’t know what happened. The time given to us was too little to find a solution and the huge sum made it difficult,” Sai Gon Giai Phong (Liberated Sai Gon) newspaper quoted him as saying.

Do Quoc Tuan, deputy head of the city tax agency’s Tax Payers’ Education and Support, explained that according to the decree in force then, foreign companies doing business in Viet Nam had to pay a “bidder” tax. If imports were covered by insurance, like CMC Company, they had to pay tax, he says ‘as usual’.

But a new decree last October scrapped the “bidder” tax.

“CMC Company imported goods when the old decree was in effect. There are a lot of companies facing the same problem.”

He said the tax department recognised the error and had sought a solution from the Government and was waiting for its decision.

The director of a software company said when her company was established in 2006, there was 100 per cent income tax exemption for the first four years and a 50 per cent waiver for the next nine.

But the October decree stipulated just a 10 per cent waiver, and the provision had applied to her company, she said.

Another company that had also been set up before the new decree came into force said it too had lost many benefits.

But tax authorities assured businesses that they would continue to enjoy incentives based on when they were set up.

Nguyen Thi Hong Hai of HPT Company wondered why companies making foreign currency payments had to sign contracts in Vietnamese dong and suffer losses when the currency weakened.

HPT sells software for which customers make payments over three years. Hai wanted to know if it was legal for her company to demand payment from customers at current exchange rates rather than the rate at the time of the contract.

Tax officials said foreign currency payments followed the State Bank of Viet Nam’s regulations while the tax department only needed invoices in dong.

Tran Minh Trieu, an executive from a joint-venture company, said his company used foreign services since they were not available in Viet Nam and his staff paid using his personal credit card since the bank had refused to issue a card for the company.

He wanted to know if the money paid thus would be counted as company expenditure.

Tax officials said to qualify as company expenditure, the payments had to meet three conditions: it had to be for the business, the payment had to be legally made and there should be bills.

“IT companies pay for software and services by credit card, but Vietnamese banks don’t issue credit cards for companies. What should we do?” Trieu asked.

Nguyen Manh Ha, deputy head of the Government Office, said: “We recognise the inadequacy of regulations in managing the information technology, telecom and electronics industries.

“Therefore, a meeting like this is very important to enable State authorities to clearly know about enterprises’ difficulties.” — VNS

Source : http://bizhub.vn/