Vietnam investigates alleged $215,000 bribery by Japanese firm

Vietnam is investigating reports that a Japanese plastic company bribed Vietnamese officials JPY25 million ($215,000) to escape tax duties and fines.

Vietnam, Vietnam Japanese company bribery, Vietnam investigates Tenma bribery, Tenma Vietnam, Bac Ninh Province

The Finance Ministry has formed an investigation team to verify recent reports by some Japanese newspapers including Asahi that plastic firm Tenma had bribed Vietnamese officials on two occasions in 2017 and last year.

Asahi said that Tenma representatives on April 1 confessed to prosecutors in Tokyo that its subsidiary Tenma Vietnam in June 2017 had imported a batch of molds and Vietnamese officials demanded a value-added tax of JPY1.8 billion ($16.7 million).

To avoid this obligation, the CEO of Tenma Vietnam, which is based in the northern province of Bac Ninh, had paid a senior customs official VND2 billion (JPY10 million or about $86,000) in cash.

The newspaper also reported that in August last year, Bac Ninh tax authorities had asked Tenma Vietnam to pay tax dues, including corporate income tax, worth JPY89 million ($826,400).

Tenma Vietnam paid VND3 billion (JPY15 million or around $129,000) in cash to tax officials to get the tax lowered to JPY2.6 million ($24,300), the report said.

On May 1, Tenma announced on its website that the CEO implicated in the bribery will announce his resignation at a shareholders’ meeting in June.

The company is being investigated for bribing foreign officials and violating unfair competition laws in Japan.

Bac Ninh customs officials have denied the allegations.

Pham Chi Thanh, deputy head of Bac Ninh Customs Department, said that Tenma, as a firm involved in processing for export, is eligible for zero import and value-added tax duties under Vietnamese law.

This means its imported goods does not have to pay any tax, and allegations that customs officials have received bribes for reducing the company's tax dues are baseless, he said.

Ngo Xuan Tong, director of Bac Ninh Taxation Department, said that apart from the newspaper report, his department has not received any official document from Japanese authorities on the matter.

He said that the department had only fined the company VND500 million ($21,500) for its delay in paying income tax on a portion of revenue, which are not related to the above-mentioned import tax incentives.

Tenma Vietnam was established at the Que Vo Industrial Park in Bac Ninh Province in 2007. It produces plastic parts for vehicles and household items.

Two previous instances of Japanese companies bribing Vietnamese transport officials to the tune of $262,000 and VND11 billion ($473,000) respectively have been recorded.

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