Taxes are taking away portions of meals for kindergarteners in a province in southern Vietnam, many parents have complained.

Tuoi Tre has found that preschools in Ben Tre Province subtract five to ten percent of the money, which parents have chipped in, to fund meals for the kids to obtain VAT red invoices for the food items they purchase.

In Vietnam a red invoice is issued when a buyer agrees to pay a five to ten percent tax on the purchase price of any goods or service.

The extraction stems from a regulation issued by the provincial Department of Education and Training, which requires local schools to attach the invoices to their financial sheets for accounting purposes.

So many parents have complained that their kids are suffering from the cuts.

“My kid’s school often reports a ten percent cut from its meal costs, saying it was used to buy red invoices,” said Nguyen Ngoc Nao, the mother of an enrollee at Vinh Hoa Kindergarten in Ba Tri District. “In that way, our children are deprived of parts of their meals every day.”

Dang Thi Nuong, whose niece and nephew are enrolled at Tan Ngai Trung Kindergarten in the same district, said the school takes five percent off its meal funds to purchase the same papers.  

This practice also applies to students from impoverished families, whose meals are currently subsidized by the government, meaning they lose five to ten percent of the subsidies on a daily basis.

‘We have no choice’

School principals have explained that they can do nothing but follow the rule, and thus have to offset the costs of buying the invoices with the parents’ money.

“Food sellers say that they will issue a red invoice if we are willing to pay ten percent higher than the original price,” Pham Thi Thanh, principal of Bao Thuan Kindergarten in Ba Tri, said. “Parents should pay this tax as the regulation gives us no choice.”

Principal Tran Thi Be Nam offered the same explanation, pointing out that her school has had to buy red invoices from local companies and organizations, which are allowed to print such papers, because its food suppliers have no red invoices.

“We have had to purchase the red invoices and bring them to local tax agencies for their certification,” Nam, who heads Tan Thuy Kindergarten, revealed.

‘Sellers and schools are wrong’

A chief of the education department’s finance office has said that food sellers are wrong when they demand an additional ten percent in return for a red invoice.

“Food prices already include VAT and the sellers are required to issue red invoices to their customers,” Ly Chi Hung said.

Cutting meal costs to buy red invoices is also wrong, Hung asserted. “We will talk to kindergarten management to stop parents from incurring such expenses,” he said.

The taxman confirmed Hung’s statements and said that it is illegal to ask for extra charges for the issuance of a red invoice.

But it is hard to prevent this practice as it is so rampant now, not just in Ben Tre, Nguyen Hong Diep, chief of the provincial Taxation Department, said.

A kindergarten is not a business so it is not allowed to buy red invoices, Diep added. “Kindergartens are not conducting business activities so they cannot purchase such invoices.”