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Friday,  Dec 15,2017,22:49 (GMT+7)

Vietnam’s VAT refund policy unappealing to int’l tourists

Dao Loan
Thursday,  Dec 7,2017,23:22 (GMT+7)
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Vietnam’s VAT refund policy unappealing to int’l tourists

Dao Loan

Foreign tourists buy goods at Ben Thanh Market in downtown HCMC. Last year saw 5.2 million international tourists coming to HCMC but only 5,000 of them claimed tax refunds - PHOTO: DAO LOAN

HCMC – Last year saw 5.2 million international tourists coming to HCMC but only 5,000 of them claimed value added tax (VAT) refunds.

“This is a very small amount of VAT refunds. There are as many as 20,000 passengers exiting the country via Tan Son Nhat International Airport a day, but there are just a dozen VAT refund claims,” Le Tuan Binh, deputy head of the customs office at the airport, told a seminar on the VAT refund policy held in HCMC on December 6.

Under the existing regulation, foreign tourists with shopping bills of VND2 million or higher can request VAT refunds at eight border gates in the country. However, the policy has appeared unattractive to tourists since it came into force five years ago.

HCMC refunded VND29 billion to 5,000 tourists last year, and expects to pay around VND40 billion in VAT refunds to 7,000 tourists this year.

A limited range of products, complex tax refund procedures and few participating enterprises are among the reasons.

According to Tuan, though the customs has tried to facilitate VAT refunds, the number of foreign visitors claiming VAT refunds is still insignificant. Eighty companies with 626 shops do not often notify clients of the VAT refund policy.

Pham Trung Luong at the Vietnam Tourism Association said goods options subject to VAT refunds are limited and that the refund process should be simplified.

In particular, VAT refunds should be made possible at shopping malls and even shops instead of at border gates. But to do this, there must be an electronic data system connecting the customs and participating enterprises.

Regarding why there are few enterprises opting for the VAT refund program, some participants at the seminar attributed this to the complicated tax deduction procedures while the benefits for them are unclear. 

Economic expert Dinh The Hien underscored the importance of introducing the program and its benefits to guests and enterprises. Customs and tourism authorities should develop a website where information about duty-free shops can be found, and show where and how to claim tax refunds.

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