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Businesses want more guidance from tax office

Update: May, 27/2013 - 12:00
HCM CITY (VNS)— Nearly 70 per cent of business leaders in Viet Nam believe that taxes in the nation are geared towards stimulating economic growth.

This is revealed in a quarterly report released last Friday by consultant Grant Thornton International in a survey of 3,000 businesses in 44 countries, which was conducted in January and February.

The report added that two-thirds of world businesses would like more tax guidance from tax authorities on what was acceptable and unacceptable tax planning, even if this provided less opportunity to reduce tax liabilities across borders.

Seventy five per cent of eurozone businesses were keen for more guidance compared to just 54 per cent in North America. Similarly 85 per cent of businesses in Latin America and ASEAN nations were more likely to look for advice compared with their peers in Asia and the Pacific (67 per cent).

Francesca Lagerberg, global tax leader at Grant Thornton, said: "Reducing liabilities across borders can offer significant tax savings, so it is interesting to see how open business leaders are to improving guidance and global co-operation.

Business leaders are also critical of what the tax regimes in their economies are set up to achieve. Just 31 per cent globally said their local tax laws and policies were geared to stimulate economic growth.

Senior executives in Southern Europe (11 per cent) and Latin America (23 per cent) were particularly scathing.

However, in Viet Nam, business leaders were much more positive, with 66 per cent believing that taxes were geared towards stimulating economic growth.

Moreover, 49 per cent of business leaders believed their current tax regime did not bring enough economic participants into the tax base, although there was a large divergence of opinion between G7 businesses (63 per cent) and their BRIC peers (17 per cent).

A further, 41 per cent of businesses do not believe their tax regimes are sufficiently redistributive, led by those in North America (54 per cent).

These figures are in contrast to Viet Nam, which clearly believes that the tax regime does bring enough economic participants into the tax base. Only 6 per cent feel the base should be wider.

Lagerberg, added: "Tax is a cost to businesses in its simplest form so it is perhaps unsurprising to see few associate it with economic growth. Moreover, many mature economies around the world are undergoing severe fiscal retrenchment and business leaders are seeing taxes rise even as growth remains flat. — VNS

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