Tuesday, August 21 2018


New VAT refund policy for foreigners fails to impress

Update: July, 13/2012 - 09:16

This week:

Homestay, the form of tourism that allows a visitor to rent a room from a local family to better learn the local lifestyle, is not something new in many countries.

Viewed by tourism experts as one of the best ways to learn a different culture while at the same time allowing locals to earn additional income, homestays are strongly promoted in some countries such as New Zealand, Kenya and the United Kingdom.

This form of tourism, however, does not seem to be taken full advantage of in Viet Nam. A tourism company's director recently told the Tin tuc (News) newspaper that tourism places in Viet Nam had only offered "housestay" (accommodation service) instead of homestay - a means of cross cultural exchange.

He said true homestays meant that tourists not only lived with the locals but also had meals, befriended and sometimes worked with them.

He added he did not see this kind of homestay in any place in Viet Nam except the central Hue City and central Quang Nam Province's Hoi An Town.

Do you agree with his statement? Have you ever experienced a homestay in any place in Viet Nam? If yes, could you share your experience with us and give some comments?

From the experience of your own countries or another country you have been to, what do you think Viet Nam should do to promote homestay?

Please reply by email to: opinion@vnsmail.com, or by fax to (84-4) 3 933 2311. Letters can be sent to The Editor, Viet Nam News, 11 Tran Hung Dao Street, Ha Noi. Replies to next week's questions must be received by Thursday morning, July 19.

Last week, Viet Nam News asks readers' opinions on the new VAT refund policy, which started on July 1, and would allow foreign visitors to Viet Nam to get their value-added tax refunded on departure from the Noi Bai or Tan Son Nhat airports.

Dennis Berg, American, Hong Kong

I was at Tan Son Nhat airport on July 1 checking in at the EVA airline counter. Next to the counter was a big gathering celebrating the announcement of the new tax refund policy. I did spend a lot of time in Viet Nam and it was the first I had heard of the policy.

During my time in Viet Nam, each month I host at least one set of tourists, friends, acquaintances, and/or delegations. I am sure the new policy will not be useful to any of the tourists I know. Maybe there are some people who can benefit from the policy, but I don't think many. And if they could, will they take the time needed to get their benefits? Why was the policy made so complicated? I would never go through such a hard set of procedures for a small amount of refund.

Why wasn't the policy implemented at the point of purchase? If you want to be exempt from the value-added tax, show your passport and the sales people should give you a slip of paper certifying you were exempt from paying the value-added tax and not collect it in the first place.

Putting tourists through this complicated set of procedures will damage tourism, not encourage it.

Think about all of these hurdles: buy the goods at a particular place, submit all of the purchased goods for inspection, goods are transferred to cargo or carried onboard separately from checked baggage, complete and submit the refund declaration, and then the refund is in VND(a non-convertible currency) which then must be changed at the airport.

How long will all of this take? How much time must a tourist add to their pre-departure time to be able to take advantage of this policy?

Some tourists might even feel frustrated because they're unwilling to go through the time-consuming, complicated procedures that have now been called to their attention and they realise that they have paid value-added taxes that they are exempt from.

Jerome Valette, French, Lyon-France

When I first heard about this policy, I immediately thought that the procedure would be made complicated, just like almost anything administrative-related in Viet Nam. I think many of the foreign tourists, who are used to much faster administrative procedures in their home country or in countries such as Singapore or Hong Kong, will likely not bothering going through this.

I have visited Viet Nam several times with my Vietnamese wife, and honestly for the stuff that we usually buy, we won't bother with this procedure. And from what I remember, many shops do not issue invoices (the proper ones, not the hand-written ones).

From what I've read, even in its current stage as a pilot program, there are already many problems: a limited number of shops with few enterprises and people aware of the new policy.

You also have to understand that getting a VAT refund only makes sense if you purchase big ticket items (if you buy a US$1,000 bag in Singapore, then you'll get a $70 refund). In the case of Viet Nam, anyone who travels knows that the luxury items can be found for much less and with a better selection pretty much everywhere else.

Furthermore, people on vacation are on very tight schedules and need things like this to be simple. Who exactly would go through all that trouble to get a refund for the cheap souvenir trinkets that vendors don't even charge tax for in the first place?

Plus, we do not want to leave the country with a currency that hardly can be exchanged at other airports.

Ben Hills, Australian, Ha Noi

I personally don't think it will boost tourism. I see most tourists wanting to take away cultural knick-knacks like hats, lacquer ware, ao dais or made-to-order clothes from Hoi An. For most people, the value of those types of items that they buy will not be worth the time and hassle at the airport.

If you get to the airport to go back to your own country, you have all these wonderful memories of your time here and the last thing you want to do is administration work. In addition, by the time you have queued up to check-in, queue again to clear customs, all you want to do is sit down and relax.

The amount of money to get back is not worth the effort. Other Asian countries are well known for selling, for example, cheaper electronics so the average spending is likely to be higher, thus people would have a higher motivation to claim back their VAT.

I think that the scheme would have more success if tourists could claim the rebate at their hotels, although that may be more difficult for the government to administer.

I don't think the scheme will bring any more tourists than before, however it does bring Viet Nam into line with many other countries so at least it places Vietnam on a level playing field as far as being competitive for attracting tourists.

The key is to have a point of difference. Don't just have the scheme, have a better system than other countries (simpler, quicker, more efficient). People will then talk positive things about their experience here because Viet Nam cares about them.

Kark Moesmer, German, Singapore

Misleading is simply the remark "within 30 days from the date of departure". It appears like another bureaucratic procedure to make tax redemption efforts more complicated.

For example, in Singapore, when goods are purchased, which include VAT, tax redemption is made easy.

At the airport, one just approaches a specifically assigned counter. From there one gets the form. Once filled in, goods will be inspected, after which money is refunded at another counter. All a matter of minutes.

Bureaucratic procedures and restrictions are neither attracting tourists nor businesses. Viet Nam has great potential in both areas. Make certain things less complicated for those who want to come and spend money. For tourists as well as businesses there are plenty of other options/countries. And if Viet Nam wants to move forward, it needs to welcome both. — VNS

Send Us Your Comments:

See also: