Vietnamese Customs Officials Misinterpret Repatriation Tax
Jan. 23 – Vietnam's Finance Minister said that customs officials misinterpreted a circular that called for taxing paper and polymer used to print currency bills and thus collected taxes on dollars repatriated in cash.
The Circular No. 131 effective January 1st, meted a 10 percent value added tax (VAT) on these materials.
Finance Minister Vu Van Ninh told Thanh Nien News that is office has already sent a note to customs to clarify. He said, “This is a misunderstanding and no bank will have to pay the 10 percent VAT on foreign currency bills.”
As a response to the circular, some banks halted inflows while the State Bank of Vietnam requested the ministry to rethink what it deemed as an unreasonable regulation.
Remittances reach its peak generally before Tet (Lunar New Year) when Vietnamese expatriates send money to families back home. Some remittance companies based in the United States even went so far as to change their system and pay in dong to family and associates in Vietnam.
The Las Vegas-based Kim Phu Remittance Company told Thanh Nien News that people immediately stopped remitting money to Vietnam or lessened the amount when the found out that payments would be made only in dong.
Remittances coming into Vietnam are usually from the United States, Canada, Australia, Europe and Taiwan.
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