International tourists will enjoy value-added tax (VAT) refunds when they purchase goods in Viet Nam under a draft currently under consideration by the Ministry of Finance.
Under the pilot plan approved by Prime Minister Nguyen Tan Dung in July, foreign tourists who buy goods at certain airports, tourism areas and shops in big cities would receive a 10 per cent refund on the tax they paid.

Goods purchased by foreigners are considered export commodities so every purchase valued at more than more than VND2 million (US$96) per receipt which is issued within 30 days of their exit from Viet Nam will benefit from the tax refund.

"The VAT refund aims to promote tourism, increase foreign currency in the country and encourage on-the-spot exports," said head of the ministry's Import-Export Tax Department Lo Thi Nhu.

The ministry had distributed clear criteria to eligible businesses in Ha Noi, HCM City and traditional trade villages, Nhu said.

Viet Nam has 161 border-gates including six international airports. Under the pilot phase of the plan, Noi Bai and Tan Son Nhat International airports would be selected for inclusion in the project from April 2012 to June 2016 as they have the country's highest number of passengers. Security barriers at the airports will help ensure supervision of goods transported under the mechanism.

"The pilot project will help authorities evaluate the mechanism's effectiveness," she said.

Under the programme, foreign tourists would not receive a full tax refund because they would have to pay tax agency fees, meaning they would not receive more than 10 per cent of the total tax paid.

Surveys from the Viet Nam Administration of Tourism showed that foreign visitors stayed in Viet Nam for an average of nine days per visitor and they spend about $72.5 a day.

Tourism experienced the highest growth when compared to other services in recent years after transport, finance, insurance and telecommunications.

The country expects to welcome 5.5 million international tourists this year. In the first eight months of the year, the number had reached nearly 4 million, 18 per cent higher than the same period last year.

SGT