Friday January 29, 2010
Businesses in Vietnam can now benefit from VAT exemption on goods exported to foreign markets under new regulations.
The country’s finance ministry announced that domestic enterprises are no longer required to pay VAT on exports but will still be subject to import and export tariffs and corporate income taxes, reports VietNamNet Bridge.
Businesses will also be required to pay duties on equipment and materials exported as assets for overseas projects and comply with the double taxation avoidance agreements in countries which have signed accords with Vietnam.
Under the new VAT rules, if companies incur losses or if their profits abroad do not reach a taxable threshold, they will have to submit financial reports to relevant departments to calculate corporate income tax.
Recent figures have shown that Vietnam’s higher VAT rate, which increased from five per cent to ten per cent, have driven up prices in the country’s retail sector. Retail prices in the car industry alone have risen by between ten and 15 per cent.
Wednesday January 13, 2010
Fiji has announced plans to introduce a tourist VAT scheme next month.
The system will come into effect on February 1st 2010 and will enable tourists to claim refunds on the VAT they pay on goods purchased in Fiji, reports Fiji Live.
In order to be eligible for a refund, consumers must spend FJ$500 (180 euros) in any VAT-registered retail outlet and must take the goods out of Fiji within two months from the date of purchase.
The Fiji Islands Revenue and Customs Authority said it will provide VAT services for those wishing to claim refunds at Nadi International Airport and Suva Wharf.
Mahendra Patel, chairman and chief executive of the Motibhai retail group, welcomed the initiative and said it will enable Fiji’s tourism sector to be on a par with those of Singapore, Hong Kong and Dubai.
Industry commentators expect the introduction of the tourist VAT refund scheme to boost Fiji’s tourism industry and have a positive impact on its economy.
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Thursday January 7, 2010
Vietnam’s increased VAT rate has driven up the retail price of cars in the country, new figures show.
The ministry of finance increased VAT from five per cent to ten per cent, which has caused car prices to rise by between ten and 15 per cent.
Preferential rates of cars with ten seats or less have also ended, which means consumers are likely to have to fork out more for these vehicles.
Four-seater cars such as the Gentra or Lacetti will be US$900 (626 euros) more expensive, while five-seaters such as the Spark LT will increase in cost by US$700.
Meanwhile, a representative for the Viet Nam Daewoo Motors Company said it plans to increase the prices of its products by 4.5 to 4.8 per cent.
Other manufacturers and importers including Euro Auto, Mercedes, Vinastar and Hyunday Thanh Cong said they will announce their prices when the rise in cost takes effect.
According to Vietnam’s General Statistics Office, the country’s automobile import industry is worth around $1.17 billion.
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Thursday December 31, 2009
Israel has announced that it plans to reduce its VAT rate by 0.5 per cent in January.
The country’s finance minister Yuval Steinitz confirmed that on January 1st 2010, VAT will be lowered from 16.5 per cent to 16 per cent in a bid to boost economic growth.
It is also hoped the lower VAT rate, combined with higher interest rates, will help mitigate inflationary pressures.
The decision to lower VAT had originally been scheduled for 2011 but was brought forward as government revenues improved.
It is believed the VAT cut will reduce state revenues by around two billion shekels (365 million euros) and stimulate economic activity. However, experts said the reduction is too modest and may have just a slight positive effect.
Ayelet Nir, chief economist at IBI Investment House, commented: "It would have been better to cut VAT by a full percent in the middle of the year, instead of half a percentage point at the beginning of the year."
Earlier this year in July, the Treasury increased the VAT rate from 15.5 per cent to 16.5 per cent.
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Thursday December 17, 2009
Businesses across Mexico are being urged to prepare themselves for the upcoming increase in the VAT rate.
From January 1st 2010, the standard VAT rate in Mexico will increase from 15 per cent to 16 per cent, so taxpayers have been advised to make the necessary amendments to their invoicing systems so they can charge their customers the new rate.
The new VAT system will work on a cash-flow basis – taxpayers have to account for output VAT when it is effectively collected from their customers and will only be able to credit input VAT when it is paid to suppliers.
Officials said any goods and services supplied up to December 31st 2009 for which the consideration is collected after January 10th 2010 will be subject to the new VAT rates.
Furthermore, taxpayers who have issued an invoice to a party applying a rate in force until December 31st and who do not collect payment within the first ten days in January will have to charge the one per cent VAT increase to their customers.
Mexico’s credit rating was recently downgraded amid concerns about the country’s economic growth prospects.
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Tuesday December 15, 2009
Leading motor industry figures in Turkey have called on the government to cut VAT to help stimulate the sector.
The Automotive Parts and Components Manufacturers Association said a reduction in VAT would especially revitalise the heavy vehicle industry and help it emerge from the global economic crisis.
Speaking to the Anatolia news agency, Omer Burhanoglu, chairman of the association, said production of commercial vehicles could grind to a halt if the government does not introduce any financial incentives.
Mr Burhanoglu explained the motor industry’s exports are expected to stand at around 650,000 by the end of the year.
"Last year 79 per cent of 1,172,000 vehicles produced in Turkey were exported," he said.
"This year only 72 per cent of 710,917 vehicles produced in the first ten months of the year were exported."
Automotive industry exports reached $7.7 billion (5.3 billion euros) in value in the first ten months of this year, while sub-industry exports were valued at $4 billion (2.7 billion euros).
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Monday December 7, 2009
The Philippines is contemplating an increase in its VAT rate, it has emerged.
The country’s finance department is currently studying proposals from experts to raise indirect taxes and consumption with the hopes of such a policy being implemented during the next administration, reports Business World.
If the proposals are accepted, VAT will be increased from the current 12 per cent to 15 per cent.
Economists from institutions including the University of the Philippines also suggest that income tax should be lowered in order to attract more investment and raise government revenues, while fixed wage earners should be given a tax credit worth three per cent of their income.
Finance undersecretary Gil S Beltran told Business World: "The idea is to conduct the study and then inform the lawmakers about it. We cannot do it by ourselves – congress should pass [the] law."
The International Monetary Fund recently upped its growth forecast for the Philippine economy from one per cent to 1.5 per cent this year and from 3.2 per cent to 3.5 per cent next year.
Wednesday November 25, 2009
The Isle of Man needs to redress its finances in order to secure a stable future following the redrawing of the VAT revenue sharing agreement, experts have claimed.
Manx Radio reports construction industry representatives have urged the government to maintain its commitment to building and maintenance projects on the island, despite suggestions that capital expenditure should be cut since the VAT agreement was changed.
However, experts from the construction sector argue that any cuts in capital spending may offset the VAT changes but would have a major impact on the island’s economy in other ways, such as a rise in unemployment due to a lack of construction projects.
The construction industry is one of the sectors that has been hardest hit by the global recession, as property prices have plummeted and both construction firms and governments have cut back on their building programmes.
Friday November 20, 2009
Authorities in Vietnam have released a new database of imported consumer goods liable to duties.
The General Department of Customs issued a document to the customs departments of various provinces and cities in Vietnam containing new price guidelines for goods imported into the country such as alcohol, vehicles, motorbikes and refrigerators.
Clothing, gas cookers, washing machines, air conditioning machines and building glass are also included in the new price guidelines.
The price database will only be used by the country’s customs departments for risk assessment purposes and will not be used to fix the customs value of imported goods – either by imposing a different price of the goods for duty purposes or by setting a minimum price.
Vietnam’s General Department of Customs also released guidelines on how various regional customs departments should conduct the inspection of values declared by companies in Vietnam.
Companies importing goods into Vietnam currently have to pay VAT to customs at the same time as they pay import duties.
Thursday November 19, 2009
Manufacturers in Pakistan have hit out against plans to implement VAT on a wide range of export-orientated sectors in the country.
The Pakistan Tanners Association (PTA) expressed concern about the Federal Board of Revenue’s (FBR) proposal to implement VAT on textiles, surgical equipment, carpets, leather and leather-based goods.
The association said these sectors are currently exempt from VAT in order to promote businesses and any changes to the current setup could have a detrimental impact on industrial sectors.
Gulzar Firoz, chairman of the PTA, told The News International: "The move to impose VAT and withdraw sales tax exemption was intended to be initiated at the behest of the World Bank."
He added that if VAT is implemented on these sectors, exports could decline – particularly on the leather industry, which has already seen exports go down by 29 per cent.
Earlier this year, the FBR met to discuss the implementation of VAT on the retail sector during the next fiscal year.
