Regenerating capital for businesses from tax refunds

​(CTT-Đong Nai) - In the first 5 months of 2023, the Dong Nai provincial Department of Taxation has processed VAT refunds for 997 records, with a tax refund amounting to nearly VND 6.3 trillion. They also checked 135 tax refund dossiers with signs of risk and settled tax refunds of nearly VND 852 billion.

Taxpayer looking up tax information at the Bien Hoa – Vinh Cuu's District Tax Department 

“Power up” for businesses

This is an effort from the tax department to support companies and enterprises in the province struggling in production and business activities due to global economic downturn, allow them to have more capital to recover and expand their production and business activities. 

In addition to implementing regulations to quickly resolve tax refunds, the tax department also increases their reviews, comparisons and verifications of invoices, they even verify documents and certificates of origin of purchased goods from individuals and companies to prevent the tax refund exploitation. 
Ever since the start of 2023, companies and enterprises in the province have faced financial difficulties as the number of order kept going down, causing their production budgets to run out. There have been reported cases of companies and enterprises struggling in business activities, barely making any profit or even suffering losses.

Facing these challenges, businesses are looking toward to potential cash flows in order to maintain production, and overcome these difficulties. To be specific, the largest source of cash flow is from tax refund for companies and individuals. Ms. Tran Kim Ngoc Han, Chief Accountant of Hyosung Vietnam CO., LTD (Nhon Trach 5 industrial park) mentioned that the company has over 7 thousand workers. Recently, the company's order has been dropping sharply, while finding new customers is extremely hard, combining with the difficulty in management of working capital. Therefore, the timely tax refund from the tax department helped the company have enough capital to stay afloat. Ms. Han said: “In recent years, the tax refund activity from the Department of Tax has been conducted timely, and the quick support in respect of following regulations. This has helped companies have enough capital to produce; even during the COVID-19 pandemic, the tax refund was still on schedule, satisfying many companies and businesses".

Preventing tax refund exploitation

At the end of May 2023, the government directed ministries, and specifically the tax departments, to promptly settle the tax refund dossiers as regulated, to support and resolve difficulties, entanglements for taxpayers, at the same time help local tax departments strengthen their control and checking of tax refund activity, preventing any exploitation.

Acting accordingly to the government's policy, Dong Nai Provincial Department of Tax has reviewed a number of tax refund dossiers, then separated them to promptly handle eligible dossiers for tax refund. In order for taxpayers to receive their tax refund on time, beside propagating tax policies, explaining the needed files and procedures for tax refund, the tax department also increased their after-refund inspections in order to promptly find illegal invoices and tax refund profiteering…

Mr. Đau Đuc Anh, Vice Head of Tax Department of Dong Nai province, said that the tax refund process has achieved positive results,  allowing businesses to have more working capital. However, beside the achievements, the tax refund process has encountered difficulties when dealing with VAT refund dossiers. According to Mr. Dau Duc Anh, the act of buying and selling illegal invoices is becoming more and more sophisticated national-wide; some individuals even committed tax fraud by establishing “ghost" companies, businesses that were rapidly found but moved constantly or did not operated at the business address… in order to conduct buying and selling illegal invoices activities, making false exported goods declaration to claim VAT tax refund, causing losses to the state's budget and difficulties to the tax departments.

Mr. Dau Duc Anh assessed “In the future, the Dong Nai provincial Department of Tax will focus its resources, improve the tax refund implementations, ensure only eligible dossiers can receive tax refund, follow tax policies, in turn they can offer promptly solutions to taxpayers and expand production and business activity". ​