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Chinese tourists generate no profit for Vietnam's Da Nang: insiders

Thursday, July 21, 2016, 18:33 GMT+7

Chinese travel firms are willing to offer almost zero-priced packages to Vietnam to their customers at home, as they know how to recoup money immediately tourists begin their trips.

As recently reported by Tuoi Tre (Youth) newspaper, the number of Chinese tourists coming to visit such famous Vietnamese destinations as the central city of Da Nang and the south-central province of Khanh Hoa, home to Nha Trang beaches, has increased significantly.

However, the Vietnamese tourism industry does not benefit much as the services provided to those visitors when they are in Vietnam are mostly, if not all, run by Chinese people.

The hotels where the Chinese tourists stay, the dinners where they eat, and they places where they visit are all decided by Chinese tour guides, and what matters is that those services and places are all run by Chinese.

Chinese-run tours cause profit loss to Vietnam

Le Tan Thanh Tung, vice president of Vitours, talked to Tuoi Tre about the issues brought by the Chinese in Da Nang on Friday.

Pointing to a group of Chinese visitors who had arrived at the city’s airport, Tung said that the majority of Chinese tourists coming here are on low-cost packages offered by Chinese tour organizers.

They are only guided to a few local attractions, and most of the time are taken to shopping areas, eateries, and souvenir stores which are mostly run by Chinese. These places usually charge the tourists dearly and the payment is only done by cash, causing a huge loss to the tax revenue of the Vietnamese government.

According to a local tour guide, Chinese tourists pay all the tour fees in advance in China and when coming to Da Nang, and the Chinese tour guides will be in charge of paying the expenses for their compatriot tourists. Activities such as renting car, booking hotel, eating, and buying admission tickets to places are done by cash and those places are all run by Chinese, making it impossible for Vietnamese agency to collect tax. 

Cao Tri Dung, vice chairman of Vietnam Society of Travel Agents (VISTA) and chairman of the Da Nang travel society, said that these all-Chinese run tours are like “non-profit tours” to the local coffers, as all the money is collected by Chinese people, generating no benefit to Vietnam.

“Taking these tours, the Chinese tourists definitely miss many attraction places and cannot experience the best services provided by the Vietnamese locals,” Dung said.

“In the meantime, they are also charged an exorbitant fee by their compatriots when going shopping at Chinese-run places.”

Dung added that such Chinese-run tours are causing millions of dollar loss every year to Da Nang and the city’s image also suffers a lot.

Difficult to check revenues and collect taxes

Speaking with Tuoi Tre, Nguyen Van Nhut, a tax inspector of the Ngu Hanh Son District, said it is complicated to fight against tax evasion in his district as there are a lot of Chinese-run businesses.

“If the district tax agency carries out the checking extensively and there is better collaboration among responsible governmental agencies, the amount of tax collected will be 70-80 percent higher,” said Nhut.

It is also difficult to estimate the taxable revenue generated by such Chinese-run businesses as hotels, restaurants, and small shops along the city coast, the taxman added.

According to Kieu The Phong, deputy director of the Da Nang tax department, fighting against tax evasion by owners of hotels and restaurants faces many challenges as it is hard to evaluate the revenue of those businesses and most of the owners are not honest in declaring their revenue.

Selling products and charging services without a receipt are pervasive in Da Nang, making it extremely difficult to calculate the business’s revenue in order to collect the right amount of tax.

“We have checked 62 restaurants and 24 hotels across the city and it has showed that the revenue of those businesses were much higher than what they declared,” Phong said.

“According to our investigation, the occupancy of hotel’s room was much higher than what the owners declared.”

Dung, the VISTA vice chairman, said it is likely that those all-Chinese tourism activities in Da Nang are assisted by certain Vietnamese enterprises. The government should look into the issue and impose sanction on those illegal businesses, he suggested.

“One solution to fight against tax evasion is to require businesses to issue receipt for every transaction,” Tung, the Vitours vice president, suggested.

“Another way is to establish a special tourism police force in charge of investigating illegal tourism activities.”

Ngo Quan Vinh, director of the Da Nang tourism department, said he has requested all Vietnamese tourism agencies in the city not to assist the illegal activities of Chinese.

The agency will also collaborate with other authorities to constantly check foreigners, especially Chinese, who reside in the area on tourist visas.

“We will check Chinese individuals and enterprises suspected of illegally guiding or providing tourism services,” Vinh said.

“In addition, we will strictly impose sanctions on Vietnamese tour guides and service providers who help Chinese or foreigners in running illegal tourism activities.”


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