Tax formalities consume an unseemly amount of Vietnamese businesses’ energy and time as they spend 1,900 hours a year on red tape, a study has found. Of 360 businesses polled by the Central Institute for Economic Management (CIEM), 64% had to depute up to two employees just for registering their tax codes.
Ten percent had to send four employees for a task which is apparently more burdensome than changing name, location, or mode of business. Value-added tax was another bugbear with the businesses spending some 1,732 hours a year struggling with it. Corporate tax assessment also lasted long and wasted much time.
The study found that an average Vietnamese business has to spend 1,959 hours per year, or 245 working days, on tax formalities. At blame is the enormous amount of superfluous paperwork, which 88% of businesses complained was time-consuming but few businesses use accounting software to help speed up the process.
Tax policies too were to blame since the new Tax Management Law required businesses to declare taxes every quarter instead of annually unlike earlier. One company complained about the frequent changes in tax decrees and regulations.
Another slammed the complicated tax returns and suggested that the government should allow businesses to file them online.