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.

21 Comments

  1. Paul says:

    One thing I hate most is BRIBERY. From the guard @ Tan Son Nhat airport to the Doctors @ Thu Duc dist hospital I had to pay. The taxi driver got pulled over, I ended up to pay for his fine! The whole thing is awful!!

  2. Drifter says:

    Sadly this is how most of the world operates. I’m friends with a former Sai Gon policeman and he says that despite NOT asking for bribes people heaped them on him at every turn as this is the way it’s always been done. That’s how friends are made and favors are done for friends. Sometimes it’s best to hold your nose and do it….cheaper in the end….principals cost dearly.

  3. marilyn says:

    wow owen. you must sometimes wonder why you bother…until you read all the great reviews and know how much your guests appreciate your attitude and work.

    i sincerely hope it all works out ok for you sooner rather than later.

    see you soon

  4. Dave says:

    the stress harldy seems worth the effort. To me retirement is all about relaxation. Best of luck and be carefull out there

  5. Michelle says:

    Hi Owen,
    I’ve read about your resistance to bribery and APPLAUDED your effort. I wish that more and more businesses and people alike would come together to resist the bribery, so that the people in power would not get rich of off the labor of others, especially of the poor. I have no doubt that the ordinary Vietnamese who have no power and no connections are being squeezed at all ends because of the corruption practices. This is the reason we stayed away from Viet Nam. I heard endless stories of bribery for the three weeks we visited last September and my heart just breaking for the very poor Vietnamese knowing that they have to work so hard to make a living and have to content with paying for all the corruptions just to get by in their lives.

    I truly believe that for Viet Nam to be prospered as a country and the Vietnamese as a people, they need to stop all the corruptions. I know that the world is watching and you said the government is trying, but I don’t think they’re doing enough. The decisions the country made because of corruptions could have dire consequences to its people for it benefits only the few and hurt the majority; the Vietnamese need to be educated about this and stop the practice of corruption if they want their country to be prospered.

    I know that it’s going to take time and bravo to you for trying to help, but every baby step is needed because no matter how much money the Vietnamese spent trying to get tourists to come to Viet Nam, it’s a wasted effort because the tourist would not come back having to deal with all the scams and corruptions while visiting. It’s a very small percentage of tourists would come back now and I think it’ll be none at all without people like you to help.

    Keep up the good work and I think you should talk more about the corruptions, not just to the foreigners, but to the Vietnamese as well so that they would know that continue to practice corruptions would only hurt themselves in the long run.

    • Owee says:

      Michelle…. thanks for that, but I do have to be careful. I cannot ever forget where I am.
      Dave….. reguardless of what happens….. I feel alive! I am contributing to society and not just counting my days like back home.
      Paul…. it seems you have been hit worse than I…sorry about that….

  6. Brad says:

    ahhh…..forget about it!

  7. Lyn says:

    This all really sucks. Loved our trip to Vietnam but found the open corruption disturbing. Good luck with it all.

  8. Tim Mason says:

    Owen,

    I have taken to reading your blog non-stop over the past few days. I am also contemplating a move to VN. I am a business owner here in the States, but don’t know if I want to own another one. I would probably rather have a job.

    If you had it all to do over again, would you change?

    Tim Mason

    • Owee says:

      Welcome Tim
      I have at times gone through periods of frustration and second guessed myself, but in the end, there is no place I would rather be. (My wife is of a different opinion)
      I spent some time pondering the last part to your question and thought I would change some things……. but then, I would not have the current life and oppotunity if I did….. so I guess The decision I made was a good one.
      Unless you want to teach English, having a job here usually involves owning a business and having others run it

  9. Tim Mason says:

    Thank you for the reply, Owen. I suppose that teaching English wouldn’t be a bad way to live out my days. I am fairly young (31) and it would be a good way to meet more people my age, I suppose. My life here has been spent building a business. I have gone through the same frustrations you have en route to success. Even though we all speak the same language here, I still feel that we have similar communication problems to yours. I want a beige wall, they paint a blue one to appease me :). I view VN as a place where I can finally stop overworking and begin to enjoy life.

    I visited Nha Trang twice in the last year, though I stayed in the “tourist area.” (Don’t blame me, the showers at the Novotel are to DIE for). Obviously I could not afford to live as such in perpetuity. I will visit VN again this summer and will probably spend more time in the “real” areas. Obviously you understand the magnitude of this decision. If nothing else, perhaps a run to the Bia Hoi and some local food?

    What are your wife’s biggest concerns? Are you committed to staying forever at this point?

    Thank you for taking the time to answer my questions.

    Tim

  10. M L says:

    HI Owee,
    Good luck in running your business, you are doing a great not giving in to those greedy bastards.

    My name is XXXXXX, I am a vietkieu who live in Vancouver Canada since 1979. I read one of your posted in april 2010 about dual citizen. Do you know if any foreigners or vietkieus have any problems after they got their vietnamese citizen? What are the taxes implications? I work and live in canada, If I obtain my dual citizenship, do I have to pay income taxes to the vietnamese government? I am thinking of getting my dual citizenship in the near future to do business in vietnam but I am very skeptical about it. I am afraid that I am being set up or harass by the local police. If I get into trouble, I will loose my canadian rights. Please let me know if anyone have any problems with their new dual citizenships in vietnam. Thanks in advance.

    • Owee says:

      Hi M.L. I hope you do not mind but I have edited out your name so you cannot be identified. I can tell you that we have now sucsefullly completd the process and my wife is now a dual citizen of Can and Viet. It is a bit hard to explain and I cannot do it openly, but there are no tax implications…. we live in a cash economy. From what I understand, we are among the very few that have used the obscure law and had dual ctizenship granted. So far……. no problems.
      The questions you are asking involve information that I am very uncomforatable posting openly. I will send you my email address…

  11. Bob says:

    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.

    Bob

  12. Hans says:

    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.

    Hans.

  13. Claude says:

    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.

  14. J Houston says:

    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.

  15. Texan says:

    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. :)

  16. Owee says:

    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.

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