Vietnam’s rank puts it far behind regional countries such as Malaysia (31), Thailand (70), the Philippines (126), Laos (127), China (132) and Indonesia (148), the World Bank (WB) has said in the “Doing Business 2016” report.
On average, firms in Vietnam make 30 tax payments a year, spend 770 hours a year filing, preparing and paying taxes and pay total taxes amounting to 39.40% of profit, says the report.
Vietnam has cut the time needed for firms to comply with tax and social security requirements by 102 hours from the previous report, by reducing the number of procedures and documents for filing VAT and social security contributions, and simplifying corporate income tax payment. However, it remains much lengthier than that of regional peers.
Vietnam’s General Department of Taxation, meanwhile, has declared that it has reduced the period needed to fulfill tax procedures by 420 hours to 117 hours per year as of June thanks to the removal of hundreds of procedures.
After the WB released the report on Wednesday, the department explained that the report covered the time companies in Vietnam complied with their tax duties in 2014. Data used to calculate Vietnam’s scores was based on the effective date of taxation-involved documents, starting October and November 2014.
The taxman said authors of the report took into account only two months in 2014 to calculate reductions of the time needed for tax payments, which totaled 40 hours. Further cuts will be recorded in the next two years’ reports.