Over 8,000 city firms halt operation

HCMC – Around 8,290 city enterprises have suspended operations or pulled out of the market this year, said Nguyen Trong Hanh, deputy director of HCMC’s Department of Taxation.

                          

With business households included, the number of inactive businesses is 38,200. The number of suspended and dissolved enterprises, albeit lower than that of newly-established firms, is higher than the average level of recent years, Hanh said.

Such a situation, along with rising inventories and lower corporate tax collection, shows that the efficiency of production and business activities is getting worse.

According to statistics of HCMC tax authority, the number of corporate taxpayers with positive profits has been falling over the past years. In 2009, 40.43% of city-based firms declared profits and made reports on corporate tax payment.

The figure dropped to 38.37% in 2010 and 35.04% in 2011. In the first quarter of 2012, only 25.42% of city firms reported profits.

Troubled businesses have also left an impact on tax revenue. In the first four months the total tax collection reached 35.46% of the year’s estimate, equivalent to the same period last year.

The same revenue year-on-year equals a decline, Hanh stressed.

Tax collection from production and trading businesses met 30.8% of the estimate, rising by a mere 2% year-on-year. Revenue gained from the State economic sector decreased sharply, while the foreign-invested sector grew.

Revenue from land rents and car registration fees also dropped significantly against previous years.

The Jan-Apr tax revenue saw the contribution of enterprises who enjoyed a tax payment extension in 2011 and foreign-invested companies that began to claim profits after frequent inspections and constant warnings against transfer pricing.

Next week, HCMC’s Department of Taxation will organize a week of dialogue with taxpayers to listen to opinions on tax policy implementation, administrative procedures, and behavior of State officers.

During the event, the municipal tax department will hold direct talks with enterprises on the department’s website at www.hcmtax.gov.vn.