Last update: 17:40 | 07/12/2017
The Ministry of Finance (MoF) will continue coordinating with the State Bank of Viet Nam and other competent authorities to review the use of Malaysian company Grab’s grants from the mother company to its local branch.
Vietnamese Grab bike riders wait for passengers in HCM City. — Photo vietcetera.com
The purpose is to prevent and promptly handle any probability of tax evasion.
In its written response to questions from National Assembly deputy Pham Van Hoa from Đồng Tháp Province during the fourth session of the 14th National Assembly in November, the MoF announced it has taken action against any tax fraud related to Grab’s business activities in Viet Nam.
Hòa raised a question on the clarity and accuracy of tax filing, tax return and exemption, and responsibility of both taxpayers and the authority, by giving the example of Grab having charter capital of VNĐ20 billion ($890,860) and incurring a staggering three years’ loss of VNĐ938 billion ($41.7 million), which he considered a sign of tax fraud.
The MoF has since instructed corresponding tax offices to carry out inspections of Grab and revise its tax profile for 2014, 2015 and 2016.
Results from the inspection show a loss reduction of VNĐ56.6 billion (US$2.52 million) for Grab, which the MoF attributed to a surge of VNĐ8.5 billion ($378,600) in recorded revenue and a reduction of VNĐ48.1 billion ($2.14 million) in subsidised auxiliary costs, sales promotion and other irregular expenses.
The loss is mainly due to marketing costs, spent on the company’s advertising campaign in the last three years, coupled with its cheaper price in comparison with regular taxis, due to which it wasn’t able to break even on all accounts.
Money supply for Grab’s branch operations in Viet Nam comes from its parent company in Malaysia, which has currently accumulated to $50 million, sans interest.
Grab has paid up to VNĐ140 billion ($6.2 million) in tax from January to October 2017.
The MoF promised further probe of the company’s financial situation in the near future, with tighter watch on other foreign entities operating in Viet Nam. — VNS