Job Discussion Forums

[lizarddoctor]

I have filed this letter with VATC on Sept. 3, 2005 as I have become aware from more than one source that the new tax system has now taken effect

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To Dr. Bao at [email protected], [email protected], [email protected]

Good Afternoon Dr. Bao,

I am the Administrator of www.saigonesl.com and I am writing you concerning some issues that have arisen in your VATC schools in the HCMC area. As your school is represented in our School Listings directory, I am giving you until Wednesday, Sept. 7, 2005 to respond before I upgrade your schools status.

This letter represents many emails and complaints from teachers in HCMC over the last week that your schools have instituted a new 'TAX' policy affecting a large percent of your foreign teaching staff. I know over the last few weeks VATC HCMC has been the focus in many Vietnamese Newspapers including the labor news and the Tuoi Tre over the Government Tax Authority reviewing your school and finding that you owe a very large amount of back taxes and have been assessing fines. This is public knowledge as it is printed in the HCMC Newspapers daily. What I am writing about is concerning your new policies and the reasoning behind them.

The current Vietnam tax system for foreign workers is as follows:

0 - 8,000,000 VND income per month is not taxable,
8,000,000 - 20,000,000 VND income per month is taxable 10%,
20,000,000 - 40,000,000 VND income per month is taxable 15%.

It seems that your schools have instituted a new 'tax' of 10% for all part time teachers for all income over 500,000 VND per month. In addition, your full time staff is not taxed until 8,000,000 VND per month and is only taxed 10% for all income over 20,000,000 VND. And your Vietnamese Staff has not been afftected at all. I have seen pay envelopes from part time teachers confirming that this is the case. Your new system is hurting a lot of teachers and many have contacted me for information to which schools they should look into to find new employment. I work at other schools in HCMC which are complying with the HCMC and Vietnam Government Laws regarding foreign teachers tax and NONE of them have heard anything about news laws stated as such. My concern is that your new policy is being used to pay for the fines and back taxes that your school nows owes the government. This new policy does not properly represent the laws of Vietnam.

Another issue is that of your school director of the Thu Duc branch threatening Dist. 3, Dist. 10 and Binh Thanh teachers with being fired if they do not come out to Thu Duc and help him fill his teaching staff. If you are not aware of this problem, it needs to be addressed immediately.

Since we have talked in your office on past occasions, and I know that you wish your schools to be one of the best in Vietnam; therefore I am giving you until Wednesday, Sept. 7, 2005 to respond to this letter in full with the reasoning behind your new 'Tax' policy. No response from you will be reflected in the school directory and VATC HCMC will be listed as BLACKLISTED. This reflects schools who treat teachers very poorly and should be avoided when looking for a stable and fair work environment.

Thank you for your time,

Administrator
[email protected]

[Blade]

[jojoni]

then you need to list the name of shool.

[lizarddoctor]

I have just received e-mails from 2 VATC teachers today and found out that not only are they taxing 10% over 500,000 but they have backdated it to July and are sacking a good 20% or more from their current paychecks. You teachers may want to have a weekend retreat set up sometime soon. I think that 200+ teachers not showing up for 2 days should wake the school up a bit. Poor decision by a school dependent on foreign workers.

'just my 2 VND'

[Porlestone]

Extremely agreed.

[spycatcher reincarnated]

Lizard Doctor:

I am writing to give you a bit more info on personal income tax:

[lizarddoctor]

I haven't had a chance to check my e-mail yet, but thank you spycatcher for the thoughts. This situation here has become pretty serious and now the director of VATC is in a bit of a damned if you do/damned if you don't situation. I will update my tax code in my Job Resources section soon to reflect the tax code at 20% so everyone has the correct information. I just posted the following letter on my site and am providing it to the Dave's and Mekong communities that are being affected.
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I have in my hand a blue folder provided by VATC staff today labeled:

PriceWaterhouseCoopers
Vietnam Personal Income Tax
Circular NO. 81/2004/TT-BTC
Dated 13 August 2004 issued by the Ministry of Finance
Providing guidelines for implementation of Government
Decree No 147/2004/ND-CP dated 23 July 2004. stipulating in
detail the implementation of the Ordinance on income tax of
high income earners (amended)

that is being provided by VATC to teachers regarding the current tax situation. Without reading this, VATC has been illegally representing the tax code since 23 July 2004 till today. Upon opening the pages, it states the tax code as follows

0-8,000,000 VND 0% Tax rate
8,000,000-20,000,000 VND 10% Tax rate
20,000,000-50,000,000 VND 20% Tax rate

So lets see...

Illegally overtax the part time and non contract teachers; under tax the full time and contracted teachers. An excuse of 'some of the teachers are not contracted therefore we can tax anything we like' only means that you also have hired illegal teachers and are in violation of another Vietnam Government Law in regards to hiring Foreign Staff. Well. you have been caught by the Government and by the teachers who have faithfully served you for many years. You are already paying one of the lowest salaries in town with no benefits and force teachers to work all over town at their time and expense. I have posted on nearly 32 different ESL forums worldwide including the following

Dave's ESL Cafe
http://www.eslcafe.com/forums/job/viewtopic.php?t=29055&sid=c2ed36b428906bf6aef8f155022c9d53

MekongESL
http://www.mekongesl.com/ -> Discussion Forum -> Jobs -> New tax issue concerning VATC

ESL Junction
http://www.esljunction.com/jobs/topic-6051-school-listings-in-hcmc-vietnam.html

Thank you for the tax book and I will update my tax scale accordingly in my Job Resources section. I am patiently waiting for your reply as no reply only means a guaranteed BLACKLIST rating for your school. This reflects a school which treats teachers poorly and should be avoided when looking for a stable and fair working environment.

To the full time teachers not affected by the tax: I apologize for any trouble this may cause your good working conditions, but now VATC has crossed a line which it may or may not be able to fix by tomorrow. I am doing my best to be fair and impartial, but one thing I have learned from my 3 years teaching ESL in 3 different countries... The customer is always right...

[lizarddoctor]

This reply from Dr. Bao has just arrived at my email and my reply will be posted after it is sent. Please browse at your leasure.

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To Administrator,

Recently there has been considerable activity on web sites regarding VATC
and implementation of the new Taxation laws in Vietnam.

The Tax Dept has openly stated that it has made a target of VATC in order to
make an example to other ESL schools to make them enforce the laws.
All ESL schools will eventually be visited by officials of the Dept, and the
law will be enforced in all schools.

Circular No 81/2004/TT-BTC of 13th August 2004 from the Ministry of Finance
states in Section 3.3.1.1“An income paying body shall…pay income tax…
in accordance with the following provisions:
………
..withold 10% income tax on..income of VND500,000 or more paid to an
individual on each occasion where the income is derived from….teaching
remuneration…”

Several e-mails seem to indicate the OPINION that VATC has applied the law
in an indiscriminatory manner and not in accordance with the provisions required.

VATC admits that there have been errors in the equitable application of the
law, and is currently taking necessary steps to remedy the cases where this
has happened.

Teachers at VATC who sign contracts, are taxed at the legal rate.
There are several “bush lawers” around who have made up tables relating to
Tax matters of which they are uncertain- The law states as above, and copies
of that law are available to anyone who wishes to see it.

We suggest that those teachers who feel they have been unjustly treated with
the Tax Laws have an axe to grind with the Tax Dept-not VATC.
So please examine the law and place blame where it belongs.

Vietnamese Government has suddenly decided to enforce its Tax laws which is something it is entitled
to do, just as your home country has done (and at much higher rates) for
many years.

More hysteria on this matter will not change the Law, but will jeopardise
the jobs of many dedicated and wonderful ESL teachers.

VATC will organize a meeting at 326 CMT8 - District 3 with all teachers, both foreign and Vietnamese, to sort this problem out. Mr. Phan, the Principal of VATC will attend the meeting too. Teachers, who are not teaching at VATC but interested in this issue, are also welcome to the meeting. At the meeting, each of teachers will recieve a copy of Vietnam Personal Income Tax document (in English).

We suggest to our fellow teachers, that any questions may be discussed personally with me
at VATC, or alternatively with our Academic Advisors, Mr and Mrs. Ray and Heather Connors.
--------------------------------------------
Dr Nguyen The Bao
cell: 84 903 842 048
[email protected]

[spycatcher reincarnated]

As I have pointed out before PIT laws are vastly complicated and the simple tax rates that are branded about can be very misleading if people think they are the be all and end all.

Laws are changing all the time and it is difficult for businesses to keep up with them.

The 10% law for part timers is a very easy one to miss, especially when it was brought out two or three years ago but not implemented until late last year.

[lizarddoctor]

My sincere apologies for not getting my response to Dr. Bao - VATC posted last night. The public lab I was at already closed nearly 40 minutes before I left. The fact that I am a regular is why they let me stay so late. But here is the letter in Full for review from concerned Dave's Forum readers and your OPINIONS (lol) are very welcome.

I just hope the Ol' Frank is looking down from heaven is proud. I will not eat the yellow snow, and neither should the ESL teachers at VATC.

Is this situation happening in their other branch offices around Vietnam and China, or is this situation limited to HCMC?
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First of all, thank you for your timely reply to the Sept. 7th deadline of my letter.

For such a post and the seriousness of your situation, I understand completely that you must be under a lot of pressure as not only are you accountable for the result of this incident, but the heads of your accounting department and your schools are going to suffer greatly under any result. I will itemize the following for easy reading and catagoization for your future use as I am sure you will need this letter at your Directors meeting tomorrow. I am sitting with a Vietnamese Head Manager from a HCMC company now for reference who also employs many Foreign Employees, so please feel free to send a reply with any corrections in Vietnamese in an attachment when you are thru so there is no translational problems.

1. First of all, lets talk about the ILLEGAL action of back taxing teachers. Your 'back' taxation of July paychecks from Septembers payments is unacceptable. This action was not taken until after your schools were investigated by the Vietnamese Government Tax Authority. If you did not deduct the tax in July when you should have, then you are accountable for that tax loss and not in a position to surprise a very large portion of your teaching staff. It is your fault that this situation has arisen. Not you personally, but the fact that people under you are taking orders from a VATC Official and that makes VATC the sole responsible body who has violated the law. Please don't blame the Government, teachers, or some web site which produces FREE teacher resources for practices you have become so comfortable with over the years that you feel that you are above the Laws of Vietnam and a owns the teachers who have served you faithfully for years.
- This action is why we are talking now, not all of the other complaints that will follow.

2. I am reading the tax code that you so conveniently .... through does state as follows "an income paying body shall declare and temporarily pay income tax on the monthly basis in accordance with the following provisions". The simple fact that you have not abided by this code is why VATC has been in the Labor News and many other newspapers. This is public information. VATC has broken the law.

3. Near the end of 3.3.1.2 " When paying income, the income paying body shall be responsible for issuing the tax deduction receipt to the individual, which serves as the basis for a summary and finalization of tax at the end of the year" (this holds you accountable for tax only at the time of pay, failure to back tax is your loss). And before this sentence it also says that you are responsible for preparing the tax return papers for those workers so they can recover the tax. Now my question is, have you ever provided this service to past and current teachers, never file the paperwork and keep the tax, or did VATC Staff keep these returned filed taxes for themselves?

4. As what you refer to as 'OPINION' in your statement and continue onward to state "Vietnamese Government has suddenly decided to enforce its Tax laws which is something it is entitled to do, just as your home country has done (and at much higher rates) for many years." Your OPINION as i am reading, and correct me if I am wrong, is that you were able to conduct business as you see fit under your own rules for many years. SUDDENLY the Government decides to enforce the LAWS UNDER WHICH YOU ARE ONLY A CITIZEN, and you feel that you are being picked on by all of these outside forces. Please take a minute as this statement is not meant to be personal, this does reflect a large amount of schools in HCMC and yes, since your the biggest - you are first. This has been in the news since March and your own 'invincibility' has lead to YOUR situation. I abide my home countries laws and the laws of Vietnam equally and I don't feel as if either government is out to make an example of me. In fact, it is my pleasure to help them both out if they would request me to do so. The tax department who focuses on some of the schools listed in the Blacklist/Backpacker forum will be very happy.

5. You state "VATC admits that there have been errors in the equitable application of the law, and is currently taking necessary steps to remedy the cases where this has happened." Yes VATC admits it broke the LAW, and after VATC was caught the first time, VATC continued to break the LAW in a different manner. Is VATC writing the Vietnam Law Code or is that the responsibility of the Government? Yes, the answer is the Government. If you say that "VATC admits that it has willing made 'errors', I have no problem with your above statement.

6. To the only remedy that is available to you. A full refund by VATC to all illegally taxed teachers by 12:00 noon on Friday is really the only way you can avoid the BLACKLIST. That is why we are talking, the back taxing, not all of the other problems that VATC has put itself into. For me to agree to not BLACKLIST VATC, I need this in writing from you by 12:00 noon tomorrow, a full written agreement in which VATC agrees to reimburse all back taxes taken from teachers on Friday, Sept. 9, 2005. Upon Friday, if no refund has been given in FULL to all affected teachers and I receive the confirmations from the over 30 emails in which I have received stating that this is the case: I cannot recommend ANY new teachers toward VATC, and with your new recruitment policy discriminating Australians, NO Americans or Canadians will want to work for you either. This is only a website Dr. Bao, but hosted internationally, so please don't underestimate the influence that this site has toward honest teachers who want honest information about dishonest and law breaking schools. I also have also recommended businesses on the site, please browse the listings and you will find that my site is fair and impartial. You are not my target, as I only want real information about real working environments.

To all of the Teachers of VATC, your work environment is going to be changing with either decision made by VATC. Its time that both the Teachers and Department staff work out an agreement that is suitable to both parties. Please chose your words carefully and decide together whether or not VATC will be a school worth working for in the future.

Thank You Mr. Bao for your time, and please feel free to contact me again, in English or Vietnamese, as you see fit. Since we have met and I know that you are reasonable, please note that your teachers are awaiting your decision. And just a small piece of advice, your next payday on the 15th will not be an acceptable time frame as I have already heard their OPINIONS.

Administrator
[email protected]
Saigon ESL - A Supplemental Resource for the Teachers of HCMC, Vietnam

[Micro67]

[sigmoid]

Of course, the BIG question is: What benefits do foreign teachers enjoy as tax payers in Viet Nam, or most of these countries for that matter...

[lizarddoctor]

the laws here are only applied by a few schools are seem to be changing everyday. It seems the schools who are trying to apply the laws are writting them as they see fit and not adhearing to the Governmental laws. VATC chose the wrong path and as you see above is in hot water with the entire esl community right now. They are the biggest and are going to set a precident to the smaller schools. Most of the good schools either have a legal and good tax system in place or just pay all taxes for the teachers. Working at multiple schools helps to cut down the tax a bit, but this VATC thing as I have been told from a VATC worker who visited Pricewaterhouse Coopers today that they are claiming their teachers as service workers and not teachers and that is why all the fuss. I will find out more tomorrow to accurately represent the discussion. below is a post I had hours ago in the other forums, but daves has had a hard time logging me in for a while

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I have entered private discussions with Dr. Bao by e-mail as he did not represent himself very well on his post. I have listed a large amount of problems that are happening at VATC and suggested solutions that may or not be acceptable to him. If he wishes to engage further and come to a reasonable agreement to avoid blacklist, then I shall give him benefit of the doubt as I know you all can get a little blood thirsty at times. The fact that this discussion has opened with the heads of VATC shows that they are now aware that their business 'errors' now and in the future have put the school in jeopardy. He has one more day to resolve the issue in a satisfactory manner.

I hear that VATC has schedualed a meeting on Friday at 9 am at the CMT8 location, but could a VATC employee confirm this as Dr. Bao has not been kind enough to provide this information with his information.

[spycatcher reincarnated]

Lizard Doctor

[lizarddoctor]

Spycatcher I will get back to you soon about the e-mails and thank you so much for your help. I am currently working 7 days a week and trying to keep up with the BLACKLIST review of VATC. I only have a few moments to take care of a few e-mails this morning.
ttys
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As per Dr. Bao in regards to his invitation to the ESL community of HCMC

If you want to come to the meeting, you are welcome: 9 am on Friday, Sep. 9, at 326 CMT8.

Thank You for the invitation