Vietnam Set to Review Tax Refund Rules to Boost Coffee ExportsBloomberg News
Vietnam will take steps to speed up refund of tax to coffee traders after delays slowed exports from the world’s biggest producer of robusta beans.
The Ministry of Finance will issue detailed instructions on value-added tax refunds by Oct. 15, Deputy Minister Do Hoang Anh Tuan said at a meeting in Hanoi today. Tax authorities will have to decide whether the coffee exporters are eligible for refunds within 40 days after the submission of documents, he said.
Exporters are allowed a refund of the 5 percent value-added tax on coffee trade and the rebates are being delayed because authorities are checking documentation along the supply chain after some local traders avoided the tax, Nguyen Nam Hai, general director of state-owned Vietnam National Coffee Corp., said at the meeting.
Vietnam may export less than the usual amount of 300,000 metric tons of coffee in the fourth quarter if the tax-refund issue is not resolved, Hai said. Shipments dropped 23 percent to 1.04 million tons in the first nine months, the General Statistics Office said Sept. 25.
Global coffee buyers may switch from Vietnam to other markets or will seek big discounts to account for risks if the tax issue is not resolved, said Le Tien Hung, Dak Lak-based deputy director of Sept. 2nd Import-Export Co.
Growers hold 120,000 tons from the previous crop, 45 percent more than 83,000 tons a year earlier, according to a Bloomberg survey published on Oct. 1. They are keeping the beans to await a price rally and as exporters slow purchases because of tax-refund delays.
Tax authorities will have to give reasons if the refund is not made to exporters after 40 days, Deputy Minister of Finance Tuan said. If authorities fail to finish the document verification within the period, the tax will have to be immediately refunded, he said.
The finance ministry will also expand the list of companies that can get tax refunds before documents are examined to large exporters with good track records, Tuan said.
For companies whose documentation needs to be checked before tax rebates, authorities will need to verify only the immediate seller to that exporter, not the entire supply chain, he said. Authorities will check other sellers in the supply chain to discover and deal with any tax violation, Tuan said.
The new tax instructions will also apply to refunds for exporters of other agricultural products, he said.
— With assistance by Diep Pham