Daunting tax refund process includes collecting 18 signatures

VietNamNet Bridge – Regulations on PIT refunds require strict procedures and place heavy burdens on the poor.

VietNamNet Bridge – Regulations on personal income tax (PIT) refunds require strict procedures and place heavy burdens on the poor.

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Under the Ministry of Finance’s Circular No. 62 (dated March 27, 2009), individuals that received irregular income worth 500,000 dong or higher must temporarily pay 10 percent of PIT.

Under the Ministry of Finance’s Circular No. 62 (dated March 27, 2009), individuals that received irregular income worth 500,000 dong or higher must temporarily pay 10 percent of PIT.

At the end of the year, if individuals can prove that their annual income is lower than 48 million dong, they will receive a refund because they are not obligated to pay PIT.

Although the rules seem very clear, individuals must follow complicated procedures and wait for a long time to get their money back.

The shortcomings of current PIT payment regulations are manifest. A tax expert pointed out that, while an individual with a stable job and labor contract does not have to pay tax if their annual income is less than 48 million dong, those with no stable job must pay. Refunds come at the year’s end, but these people need money every month to care for themselves and their families.

The accountant noted that the majority of workers without stable jobs are poor people, who have low monthly income of less than 4 million dong. They will not be subject to PIT, but they are subject to complicated paperwork and lengthy waits to obtain refunds.

Taxation bodies are also unhappy because their staff must waste time calculating how much money to withhold and then turn around and add up how much to refund. Moreover, they have to complete this work within 15 working days.

According to the HCM City Taxation Department, in the first three months of 2010, the department received over 1000 refund requests, most of which come from workers with irregular incomes.

The taxation department increased its staff by two-fold to handle these requests and queries, but they are still overloaded.

Most significantly, a decision to pay a tax refund requires at least 18 signatures from competent bodies to be valid.

Financial experts have called for amending current regulations to ease the workload and reduce the time people must expend on tax procedures.

Other analysts argue that the income threshold should be raised to one million dong from the current 500,000 dong.

Source: Nguoi lao dong