VietNamNet Bridge - Delayed tax filing by businesses has put pressure on both tax agencies and the enterprises themselves.

Last - minute payments have been an ongoing problem for years despite efforts to urge companies to pay their taxes early.

Reports from several tax departments in Ha Noi said that there was always a long queue of businesses waiting to pay their taxes in the last days of every month. March is peak tax season, a time when multiple tax types come due, including corporate income tax, personal income tax and financial statements.

Deputy head of the capital’s Hoan Kiem District Tax Department Tran Van Yen said they had received more than 2,000 sets of personal income tax forms and 1,800 business income tax records in recent days.

Tax officials have been working up to 11 hours a day to deal with the huge number of forms.

Other tax departments are facing a similar situation, receiving many more forms at the end of the month than they do on normal days.

Many of the city tax departments have said they are still waiting for reports from a large number of companies which have not filed their taxes. Hoan Kiem District Tax Department estimated that about 1,500 businesses had not paid their income taxes while the Long Bien District Tax Department estimated that over 2,000 companies had not paid.

Vo Xuan Hung, head of Long Bien District’s Tax Department, said most businesses had faced problems due to rising input material prices while also having concurrent difficulties accessing bank loans.

Several businesses had accepted late payment penalties rather than paying on time because the fine was only 0.05 per cent of their total tax requirement, he said.

Head of the municipal Tax Department’s Communication Support Office Nguyen Thi Hai Yen said the current regulations stipulated that the deadline to submit reports was by the end of March with an additional five - day grace period. Taxpayers have developed a habit of paying their taxes after the deadline, making it difficult for tax authorities to deal with the supervision and management of State budget revenue figures.

Director of Nam Duoc Pharmacy Company Hoang Minh Chau said most Vietnamese businesses prioritised payments to banks, suppliers and wages which all have direct impacts on their production.

“Our priority has been bank loans as they could affect future loans. Banks usually rank companies based on their payment histories. Enterprises with low credit scores will not receive loans,” Chau said.

He added that current bank interest rates of about 16 to 17 per cent compared with the late payment penalties of about 0,05 per cent of the total tax amount could make many enterprises accept paying late taxes.

Nguyen Thi Hai Yen said the department had asked its tax agencies to open additional offices that would work overtime to meet taxpayer needs. The Department also asked its units to accept tax filings on weekends to reduce the load on both enterprises and tax authorities.

However, she said businesses should make their payments on time to avoid a backlog at the end of the tax period which could easily lead to congestion at the tax office.

Finance Ministry asks for tax extension

The Finance Ministry has asked the Government for an extension for enterprise income tax payments and an estimated VND7 trillion (US$325.5 million) to help businesses surpass the difficulties associated with inflation.

It was estimated that over 200,000 small - and - medium sized enterprises would be given a one - year extension.

Businesses operating in real estate, finance, banking, insurance and stocks, and importers of luxury goods would not benefit from a business income tax extension.

The ministry also proposed an expansion plan for 2009 tax payments to settle difficulties. Up to 300,000 businesses received the incentives, equalling VND10 trillion ($465 million) in tax revenues.

The ministry also collected ideas from relevant agencies to revise the Circular on Enterprise Income Tax Law. Several agencies proposed to reduce corporate income tax from 25 to 20 per cent as planned.

The tax rate stipulated in this law has been amended three times since 1997. The rate in 1997 was 32 per cent and reduced to 28 per cent in 2003. The new tax law applied in 2009 permits the application of preferential tax rates to 25 per cent.

Source: VNS