Bac Ninh nreported that its tax and fee collections sharply reduced after Samsung Electronics Vietnam (SEV) and Samsung SDI Vietnam Co was permitted to turn into an export processing company instead of an foreign-invested enterprise. Photo thongtincongnghe.com

HA NOI (VNS)— The northern province of Bac Ninh reports that tax and fee collections have reduced by VND226 billion (US$10.7 million) in the first half of this year.

The Bac Ninh Department of Taxation said tax collection from import-export activities reached VND1.680 trillion ($80 million) in the first six months of this year, making up 33.6 per cent of what was projected for the year, 87.7 per cent up on a year ago.

The revenue decline was largely attributed to the sharp reduction in import-export activities, particularly after Samsung Electronics Vietnam (SEV) and Samsung SDI Vietnam Co (a research and investing information company) was permitted to turn into an export processing company instead of an foreign-invested enterprise.

As a result, tax collection from import-export items of these two companies reduced by VND226 billion ($10.76 million) per quarter, according to a provincial report signed by Luong Thanh, deputy chairman of the provincial people's committee.

According to the provincial customs statistics, in the first two months of last year, SEV paid VND80.4 billion ($3.82 million) in tax while Samsung SDI Vietnam paid VND80 billion ($3.8 million) and in the first two months of this year tax collection was VND3.2 billion ($152,000) only. The reason was largely due to the change in SEV and Samsung SDI in September last year.

Once becoming a processing export companies they were tax free.

The report said that in the remaining months, the provincial customs would deal with difficulties in collecting taxes and fees. It predicted it would collect about VND3.8 trillion ($180 million) this year.

The provincial domestic revenue was estimated to reach VND3.1 trillion ($147 million), representing 53 per cent of what was projected, a year-on-year rise of 50 per cent.

Of this figure, the foreign invested sector would contribute VND1.12 trillion ($53.3 million) making up 62 per cent of what was targeted.

Previously, unlike many other provinces and cities, northern Bac Ninh Province collected a large amount of taxes and fees from the foreign investment sector. — VNS