FDI enterprises pay lowest taxes despite high profits

Foreign direct investment (FDI) enterprises, which have enjoyed multiple tax incentives, pay the lowest State taxes despite reporting high profits, statistics show. FDI enterprises have achieved the highest profit growth among the economic sectors, generating VND327.4 trillion (US$14.4 billion) in pre-tax profits in 2016, an increase of 17.3 per cent on average in the 2010-16 period, according to the latest report by the General Statistics Office (GSO). This amount accounted for 45.9 per cent of the total profits earned by businesses across all sectors in 2016. However, they paid the lowest taxes to the State budget, amounting to only VND250.9 trillion in 2016. State-owned enterprises, comprising the largest number of companies and employees, earned VND197.4 trillion in 2016, amounting to 27.7 per cent of profits earned by all businesses, marking a 9.4 per cent rise per year from 2010 to 2016. The State-owned sector contributed VND277.3 trillion to the State budget in 2016, an increase of 10.4 per cent per year in the five years leading up to 2016. Meanwhile, non-State enterprises reported the lowest pre-tax profits of VND188.1 trillion in 2016 but paid the highest taxes to the State budget, at VND434.7 trillion, an increase of 17 per cent in the 2010-16 period. “The FDI sector earns a large profit for the economy, more than the other economic sectors, including State-owned and private enterprises, but its contribution to the State budget is lower,” said Pham Dinh Thuy, director of the GSO’s Industrial Statistics Department. Thuy said FDI businesses were… [Read full story]

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