Vietnamese Grab bike riders wait for passengers in HCM City. (Photo: vietcetera.vn) Hanoi (VNA) - The Ministry of Finance (MoF) will continue coordinating with the State Bank of Vietnam and other competent authorities to review the use of Malaysian company Grab’s grants from the mother company to its local branch.
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 Dong Thap 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 Vietnam.
Hoa 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 20 billion VND (890,800 USD) and incurring a staggering three years’ loss of 938 billion VND (41.7 million USD), 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 56.6 billion VND (2.52 million USD) for Grab, which the MoF attributed to a surge of 8.5 billion VND (378,600 USD) in recorded revenue and a reduction of 48.1 billion VND (2.14 million USD) 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 Vietnam comes from its parent company in Malaysia, which has currently accumulated to $50 million, sans interest.
Grab has paid up to 140 billion VND (6.2 million USD) 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 Vietnam.-VNA
VNA
