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No tax on dollar inflows, customs misunderstanding: Minister
Customs officials have collected taxes on dollars repatriated in cash after misinterpreting a circular that called for taxing paper and polymer used to print currency bills, the finance minister said.
Circular No. 131 from the Ministry of Finance, effective January 1, imposes a 10 percent value added tax (VAT) on these materials, Minister Vu Van Ninh said in an exclusive interview with Thanh Nien on Saturday.
To clear the misunderstanding his ministry sent a note to customs on Saturday, he said.
“This is a misunderstanding and no bank will have to pay the 10 percent VAT on foreign currency bills,” he assured.
Some startled commercial banks cut off inflows while the State Bank of Vietnam asked the ministry to reconsider the “unreasonable” regulation.
Nguyen Thi Kim Loan, deputy head of DongA Bank’s currency trading department, said her bank received US$20 million, mainly money remitted to Vietnam, on January 15.
Remittances generally peak before Tet (Lunar New Year) when expatriate Vietnamese send money to their families back home.
Some remittance companies based in the US said, following the customs’ action, they had changed their system. They receive dollars from their customers but pay in dong to their family or associates in Vietnam.
The Las Vegas-based Kim Phu Remittance Company said immediately people stopped remitting money to Vietnam.
Ngo Thanh Tuan of an agency of Kim Anh Company, also based in Las Vegas, said people normally remit $50,000 a day through his agency to Vietnam before Tet but following the announcement that payments would be made only in dong, the amount fell to $950.
Most remittances to Vietnam are from the US, Canada, Australia, Europe and Taiwan, where large Vietnamese populations live.
Thanh Xuan – Hoang Ly
thanhnien
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