Shortcomings in VAT Refund Program

Several businesses involved in pilot plan to introduce Value Added Tax (VAT) refund to foreign visitors have been unable to sell their products while others have attracted a lot more customers, said Nguyen Duc Chi, an official from the Department of Culture, Sports and Tourism in Ho Chi Minh City.

Japanese visitors at Saigon Tax Trade Center in HCMC (Photo: SGGP)

According to Chi, HCMC has several popular shops where foreigners drop in frequently while in Vietnam. These shops provide lacquer paintings, handicraft items and Ao dai dresses. However, they are not part of the VAT Refund Program.

Chi said that it is necessary to call on these businesses to participate in the VAT refund scheme.

The pilot plan for VAT refund was launched for a one year trial period in July 1 last year to encourage foreign visitors to make purchases in Vietnam.

However, most items listed in the program are imported fashion products like clothes, shoes, handbags, watches and jewelry, while domestic products were not mentioned at all.

In one year since implementation, the VAT Refund Program has attracted 47 businesses, with 190 shops in Hanoi, HCMC and Binh Duong Province.

Of these, HCMC has 32 businesses with 140 shops, Hanoi has 14 companies with 49 stores and Binh Duong has one enterprise with one shop.

Of the 14 enterprises in Hanoi, only two are regularly selling their products while the others have not seen visitors. The unit in Binh Duong Province has been unable to make out a single VAT invoice to foreign customers.

VAT refund has mainly been conducted by some companies in HCMC with delivery channels in large trade centers, selling high-class import products.

According to Vietnam Customs, more than 1,540 foreigners have received VAT reimbursement worth VND4.3 billion (US$205,000) from July to December last year.

In the first three months of this year, the number grew to 1,280 visitors receiving VAT repayment of VND3.8 billion ($181,000).

HCMC alone has 1,158 visitors getting VND3.36 billion ($160,000) of VAT back. The VAT Refund Program has been introduced at Noi Bai and Tan Son Nhat International Airports before being applied nationwide.

Foreign visitors receive 85 percent of the VAT bill value. The remaining 15 percent is used for paying services to banks.

Those wanting a refund must present a bill and fill a tax refund form valid for 30 days before date of exit. Goods purchased must have a total value of at least VND2 million (US$95) and purchased in the same shop on the same day.

Related article:
Foreigners to receive VAT refund from July

By My Hanh – Translated by Hai Mien

Other news

Most view

Pig price goes up as traders snap up

Pig price goes up as traders snap up

A leader of the Department of Animal Health in the southern province of Dong Nai July 19 said price of pig in the province went up within three days as traders snapped up for selling in the North.


VNPT & SeABank cooperate to enhance connections

The Vietnam Posts and Telecommunications Group (VNPT) and SeABank just co-signed cooperation agreement, aiming to develop the two sides’ economic, business and investment potential.


185 leading domestic & in't enterprises join in VN ETE 2018

The Vietnam Exhibition of Electrical Technology and Equipment (Vietnam ETE 2018) and the Exhibition of Products, Technologies for Energy Saving and Green Power (ENERTEC EXPO 2018) yesterday kicked off in HCMC’s Saigon Exhibition Convention Center in district 7.

Self - introduction

VNPT targets to be leading digital service provider in Vietnam

The grand opening ceremony of the VNPT-Information Technology Company (VNPT-IT), a new member of the Vietnam Posts and Telecommunications Group (VNPT), was held yesterday in Hanoi. With thousands of IT engineers and the focus on developing state-of-the-art technological products related to Artificial Intelligence (AI), Bigdata, and Blockchain, the new company is considered the main force to help VNPT fulfill the goal of becoming a leading digital service provider in Vietnam and an important Digital Hub of the neighborhood as well as the world.

Stock market

SAS profits VND 118bln

The Southern Airports Service Joint Stock Company (Sasco) which is listed under code SAS on the Unlisted Public Company Market (UPCoM), announced its second quarter’s financial report with net revenue at VND 634.5billion, an increase of 14 percent compared to last year.