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Wednesday November 1, 11:56 AMVietnam's Tax Collections From Foreign Enterprises FallHANOI, Nov 1 Asia Pulse - Vietnam's tax collections from foreign-invested enterprises in 2006 are expected to fall short of targets this year, according to the General Department of Taxation.The department projected that, by the end of the year, tax collections in this sector would only reach about 88 per cent of the year's target. In cash figures, this would represent a revenue shortfall of over VND3.3 trillion (US$209 million). If tax incentives to foreign-invested enterprises are factored in, the loss to the State budget could total VND4-5 trillion, the department estimated. The State currently gives tax preferences to enterprises in export processing zones and hi-tech parks under Decision No 64 2004/ND-CP, with the result that tax collections from these enterprises are currently VND250 billion ($15 million) lower than they were before the incentive policies were amended in 2004. The General Department of Taxation also attributed lower tax revenues from the foreign-invested sector to slowdowns in such major foreign-invested sectors as real estate development and auto sales. Automobile sales in the first nine months of this year amounted to only 26,890 cars, according to the Vietnam Automobile Manufacturers Association, down 5 per cent from the corresponding period last year. As a consequence, tax collections from the automotive industry have totalled only VND2.2 trillion ($137 million) for the year so far, a mere 34 per cent of the initial target for the year and an overall decrease of 26 per cent from the same period last year. The frozen real estate market also had a chilling effect on tax collections. The Phu My Hung joint venture, for instance, failed to sell many of its condominiums. In the first nine months of the year, the joint venture contributed only VND100 billion ($6 million) taxes, compared to VND500 billion ($31 million) last year. Some exports from the foreign-invested sector have also fallen short of projects this year, the department explained. Exports of such goods such as garments and footwear have decreased this year, causing the State substantial losses in tax revenues from the previous year. (VNA) |
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