Police and the Tax man

Maybe it is time to get a bit personal again. Some things
have happened in the last year that have slowly been simmering in the back of
my mind and have now come to the forefront. Let me talk about business and how
I (and am sure other expats) fit within it.

Many of you know that I am running a hotel in Nha Trang. The
hotel business is quite a bit more complicated than other businesses because of
the need for government to know where the people are, and the use of rooms for
thing other than sleeping. There are endless stories in themselves about what
goes on in hotels in Vietnam, but I have chosen not to write too much about that………. Some things are better
kept secret….. Anyway…

After almost 2 years, the Tide Hotel has become one of the
most popular budget hotels in Nha Trang. I am very proud of that. It is not
only because of our hard work and resolve, but also from the wonderful; guests
we have that want to experience a stay in real Vietnam away from all of the
hawkers and such. Outwardly, everything looks fine and it looks like the hotel
is successful and profitable…. But here is where the dream becomes a bit
muddy………………….I will not write in idioms in this instance as I do not care
that some person in government that is monitoring my blogs sees, and acts on
what I say.

A comon sign posted in most shopping malls

After the painful 6 month process of turning this hotel from
a “Boom Boom” house into a nice budget hotel, we experienced no problems except
the customers we were trying to be rid of. Sure there were hiccups and you can
read about those in posts from Feb-Jun 2010. Back then I was adamant that no
bribes would be paid and we would not help fuel corruption. That thought is
still true today, but the consequences of that decision have been hurtful. We
now have some pretty high level police friends, but sometimes, they cannot
protect us………. So here is what has transpired.

It all started with the local Tax authorities showing up
with 6 personnel to inspect our hotel and computerized reservation system.
After some self important declaration about how we could improve (Vietnam style
and not very helpful) we were upgraded from a standard to a 1 star hotel. This
allowed us to have things like cold drinks in the lobby.

Other city departments took notice of this newly renovated
hotel that was attracting tourists (and money) into the area. One night a team
of 6 police officers angrily buzzed up on motorcycles and promptly seized our
computer. They were here to check our guests against the information submitted
to the police station. We had not yet submitted the information as we still had
an hour until the deadline, but that did not matter to them. They made a big
production about the procedures of registration and left informing us they
would levy a fine to us the next day. Lucky for us, we know a fairly high level
police officer and he arranged to meet the 6 officers in a coffee shop and
discuss the matter. With the help of the friend and my wife, we were able to
settle with the police and ended up having to foot their food bill instead of a
fine. We were also given the phone numbers of the police with assurances that
they would help us in the future if we had any issues…….. Great I thought…..

An old deserted temple

Christmas time and the tax people are back!! They find that
my night receptionist has not yet registered the guests with the tax department
and it is 10 pm…. The deadline. The next day we are called in to discuss the
fine. Huh…. OK….. This is starting to smell a bit. Fines seem to be very
negotiable. Anyway… Shortly after Christmas, 2 police officers show up looking
for donations to their station. Our receptionist politely declines and the two
after look nervously at the security camera, and then ask who the police man we know is
by name…… Hmmmmmm…. Why would they ask that? I am now beginning to think that
our horns are locked. I do know the other businesses are making “donations” but
I will have none of it.

Tet comes and I am again paid a surprise visit by the
police. Darn!! I am finally thinking maybe we are turning a profit…….. But
no….. They find some small flaw with our tax signage (not their department),
and again we have a fine. Up until now, I have never seen the receipt for the
fine paid, so now I insist that I get a copy of the fine and receipt. The
police really did not seem to like this but complied. HaH!! A small victory! At
least I know where the money is going. OK……… holidays are over and it is back
to business, or so I thought. BANG!! The tax people are here again and after
snooping around, they decide that we must be fined for not having the room
rates posted in all the rooms……. Whaa????? I have never seen or heard of such a thing.  Now I am sure that they are looking
for anything to punish us for not playing the game. Again…. Any thought of a
profitable month disappears. Just a few nights past, again were stormed by
police. This time they seized all Id’s and passports and proceeded to barge
into everybody’s rooms. All of our records are accurate and information
entered…. There should be no problem. In the end, we were told that every
person that is in the building has to have the id in our possession……… again….
Whaa??  There are foreigners that refuse
to give up their passports, and families that travel without the id of their
children. Again this is costing us and the profits disappear

Wow! I now understand the desirability of renting the rooms
by the hour instead of by the night. At least you will have an empty hotel when
they show up.

To those of you that want to run a small business in Vietnam, take
heed. There is still some work for the government to do to get the corruption
under control. If it looks like you are successful (even if you are only trying
to break even), you will get some surprise visitors. For us…….. we still chug
away trying to have a happy little hotel in the midst of the chaos. Our staff
and most expenses get paid, but sadly, the hotel owners do not…. That is OK… We
came here to retire and as long as our cost of living is covered….. we should
be happy…. But one day… people will wonder where all of the foreigners that
used to spend their money in our jurisdiction have gone.

What a bunch of losers. We will continue not to feed the
greedy little gremlins and insist on written receipts for our fines.

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Tour designer and Guide specializing in off the beaten track tours of Vietnam

21 thoughts on “Police and the Tax man

  1. J Houston
    Sorry I was late in approving your comment. I was a bit concerned about the reaction I might get from anyone locally that follow my blog.
    I can relate to what you say and also have taken precautions similar to your own. Lucky for us the registration card and having to drive to the station has been eliminated. I am aware that there have been a few numbers done on me, but it is part of the growing pains. Until recently I have had my horns locked with a few people trying to make extra money. I think showing the shecked expressions of me showing up in person to pay the fines got word out that this had to end. I think those days have ended.

  2. Hello Owee,

    I would also like to converse with you about this subject off line, if it is acceptable with you. I would like to know what your wife’s opinions are. My wife likes Vietnam better than my country and wants to live there. I would like some more information before making this decision. Thank you for your time. I know that you are very busy. I hope to be able to drop in and stay with you in Vietnam next visit. 🙂

  3. You are having a number worked on you when the police come in to check occupants rooms at night. Maybe you need to talk to someone in the Tourism Department. If you ant to complain about police wanting bribes CanhSat@CanhSat.com.vn is the official complaint line in Ha Noi.

    I have a mini-hotel in DakLak and a second one in KonTom and our filing time is 22.30H. Our computer system prints out occupation/ID information of their forms. There are CCTV cameras everywhere, with sound, and the police don’t come around. Any more.

    We also have signs in he reception area and the offices in Vietnamese that say: “Pursuant to instructions from the Ministry of the Interior no bribes are paid with the Ministry’s written instructions”.

    There was a memo issued nearly 10 years ago to all police saying no bribes are to be solicited from Foreigners.

    We always deliver any tax we owe on the first business day of the month and first thing in the morning. This demonstrates a willingness to comply with the law.

    As for passports/ID we tell all guests that they are required by law to deposit their documents on the first night on their stay. Any one who has visited Lao Cai Province will know they are extremely strict with this rule on the directions of The Chair of the Peoples Committee. We have a similar policy and find few guests wish to use an alternative hotel.

    The joke on the registration computer is that when I go to TP HCM I am also checked in to both my hotels and the one I use down there and no one has ever remarked I am checked in to several hotels. So much for the computer system.

    By the way, we always have guests fill in registration cards at a desk that is monitored by a discrete camera. We also require guests to register their motorcycles. After the process is complete we counter check motorcycle numbers and call them into the CSGT (highway) police, particularly in KonTom as many stolen motorcycles are ridden across the border into Laos never to be seen again.

  4. A Viet Kieu friend told me to put in a few bucks cash along with my “visa extension request.” Members of “the party” may get the good government jobs, but, those jobs don’t pay much. Those in the private sector with a business makes a lot more money than they. The extra cash will ensure a quick “extension of my visa” and allow the policeman to buy a new pair of shoes for his kid.

  5. 10 years ago we’ve set up a factory in Vietnam, with the same intention; not paying undertable money. I learned that if you want to make profit in a hassle-free way you have to pay! you can’t change the people nor a complete system that is based on “extra cash”. And if you think that it’s only in Asia, think again. Before coming to Vietnam I had business in South Europe; it was there exactly the same.
    Conducting business, especially production, is not about cheap labor cost but about productivity. In my experience, productivity in Vietnam is very low. 2 years after our start in Vietnam we’ve set up a sort like factory in Thailand. Higher labor cost but the Thais produced more than double per head, compared to our Vietnamese workers.
    I currently run a air ticket office, VNA agent.
    I love staying in Vietnam but don’t ask me why!

    Have great days, enjoy them all.


  6. Owen,
    I’m sorry to hear that you are still having problems with the local canh sat and tax people. I have no idea what did it for us but they ‘seem’ to be leaving us alone, at least for now…could be that the morons really do believe I’m CIA and my stonewalling them on a few things is bearing fruit? Dunno, you’re business is more high-profile anyway for sure.

    You didn’t reply to my email but the invite is still on for the party on this Saturday the 16th — dual celebration for me — Hey! maybe the cops will raid the party!! Yes…the beer will be ice cold!! If you do decide to come please, please bring the wife along. It will be mixed, Vnese and some westerners.

    Tim…here in TH there is a need for English teachers. The cost of living is low and the holidays are many!

    Owen — thanks for the plug.


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