Strong measures are needed to collect tax debts.

(Baonghean)Currently, alongside businesses that pay taxes promptly and correctly, there are still many businesses with outstanding tax debts. The total amount of outstanding tax debt in the area has reached 800 billion VND, higher than the national average. Many solutions to collect outstanding debts have been implemented aggressively, but the amount of tax debt continues to increase. Notably, many businesses fail to declare taxes, do not comply with tax laws, and many have ceased operations or absconded…

According to the Hung Nguyen District Tax Office, there are currently many businesses with large tax arrears in Hung Nguyen, such as: Hai Van Construction and Trading Co., Ltd., engaged in construction, transportation, and trading of construction materials, currently owing 7,084 million VND; Binh Nhi Co., Ltd., engaged in transportation and construction materials, currently owing 463 million VND; Dai Phu Company owing 816 million VND; Phu Duc Co., Ltd. owing 233 million VND... Tax arrears are not only prevalent in Hung Nguyen, but also in other tax offices and localities, including businesses under the management of the Provincial Tax Department. Many businesses have large debts, including: Vietnam-Laos Cooperation Corporation Co., Ltd.; Investment and Construction Joint Stock Company 24; Central Region Investment and Development Joint Stock Company; Nghe An Bridge and Road Construction Joint Stock Company; Vinaconex 20 Joint Stock Company; 473 Joint Stock Company; Sea Dredging Company 2; Que Phong Hydropower Joint Stock Company…

Recently, tax debt collection has emerged as a "hot" issue, receiving decisive direction, yet the amount of tax debt continues to increase. The Nghe An Tax Department has assigned specific targets for tax debt collection in 2013 to each unit, including: Total debt as of December 31, 2013 should not exceed 5% of the projected budget revenue for 2013; 100% reduction in debt awaiting adjustment as of December 31, 2012, and a 50% reduction in debt awaiting processing compared to December 31, 2012; Collection of 80% of tax debts outstanding for 90 days and over 90 days as of December 31, 2012; and a tax payment extension rate of 90% or higher processed within the stipulated timeframe.

The Central Investment and Development Company is one of the businesses with the largest tax debts in the area.

According to the Head of the Tax Department: In the first five months of 2013, the Tax Department seriously implemented debt management measures such as: penalties for late payment, tax debt enforcement, asset seizure, announcements on mass media, announcements on ward and commune loudspeakers; at the same time, a letter was sent to the State Bank of Vietnam requesting guidance on inspecting commercial banks and credit institutions to coordinate the enforcement of administrative tax decisions; advising the Provincial People's Committee to issue a directive on strengthening the direction of tax debt recovery… Sending text messages via mobile phones to directors of enterprises to urge them to pay tax debts and penalties.

As of May 31, 2013, the Nghe An Tax Department had issued 12,657 notices of late payment penalties totaling nearly 34 billion VND. Simultaneously, it carried out 685 cases of tax debt enforcement by deducting funds from bank accounts, collecting over 29.5 billion VND in taxes; 33 cases of tax debt enforcement by seizing assets, collecting 100 million VND; 2 cases of tax debt enforcement through third parties, collecting 4.3 billion VND; and 5 cases of tax debt enforcement by suspending the use of invoices, collecting over 7 billion VND.

Despite this, the large amount of outstanding tax debt has led many to doubt the effectiveness of debt recovery and anti-tax evasion measures. Businesses remain delinquent, some are still misappropriating VAT, and delaying payment; many real estate businesses, despite collecting money from the public, still fail to pay taxes and invest in infrastructure; and many businesses in debt have ceased operations or absconded, such as Tien Hai Co., Ltd., Loc Phat Co., Ltd., and Anh Tuan Co., Ltd. The head of the Tax Inspection Department of the Nghe An Tax Department stated that in the first five months of 2013, the Nghe An Tax Department transferred the files of five entities to the police for processing. These were: Ha An Co., Ltd. (Vinh City), Son Thuy Co., Ltd. (Quynh Luu); Duy Hung Co., Ltd. (Vinh City); Hung Kiet Co., Ltd. (Dien Chau); and Duong Long Private Enterprise (Vinh City).

At the meeting on June 14th between provincial leaders and the Nghe An Tax Department, Mr. Hoang Viet Duong – Director of the Department of Finance – stated: Although the situation is indeed difficult, when discussing the difficulties faced by businesses, it's necessary to understand the extent of those difficulties. Who is truly struggling, and who is exploiting the situation to misappropriate tax money? Regarding tax arrears from real estate businesses: a meeting between the Provincial People's Committee, relevant departments, and these businesses is needed to determine which businesses have been allocated land but haven't paid, and which have collected money from residents even though land hasn't been allocated yet…

In the near future, it is expected that some businesses that are delinquent in paying taxes will be included in the list of those subject to prosecution. At a meeting on June 14th with the Tax Department, Mr. Nguyen Xuan Duong, Chairman of the Provincial People's Committee, also stated: Prosecuting some businesses that are delinquent in paying taxes is not only about tax collection but also about ensuring social discipline and fairness. Besides strong measures, the Tax Department also needs to engage in more dialogue with businesses and proactively coordinate with other sectors in tax collection.

Text and photos: Chau Lan