Multiple solutions for tax debt collection

(Baonghean) - 2014 was a year of many difficulties affecting the province's budget collection. In that context, Nghe An Tax Department focused on many solutions to handle and recover tax arrears.

The current tax debt situation is partly due to the prolonged economic recession, which has led to difficulties in production and business activities, losses, and even bankruptcy. On the other hand, many enterprises, although enjoying tax extension policies, deliberately do not pay when due, mainly enterprises in the agricultural and construction sectors. In addition, some enterprises take advantage of the law to circumvent the law and appropriate the State's value-added tax (VAT) money...

Vinh City Tax Department implements the decision to enforce tax debt collection.

Faced with that situation, the Nghe An Tax Department has had many effective solutions to handle tax arrears. That is, advising the Provincial People's Committee to direct the Department of Natural Resources and Environment to coordinate in collecting tax arrears for mineral exploitation enterprises when issuing new, re-issuing, extending and requesting to revoke mineral exploitation licenses according to the provisions of Article 58 of the Law on Minerals; directing the branches to advise the District People's Committees to establish and maintain the operation of steering committees and interdisciplinary inspection teams to handle and recover tax arrears (to date, there have been 37 steering committees and interdisciplinary teams operating). In addition, coordinating with other sectors in budget collection and tax arrears collection and has collected more than 401 billion VND. At the same time, the Tax Department coordinated with the Department of Construction to collect debts from 5 enterprises, the amount of 804 million VND; coordinated with the Department of Agriculture and Rural Development to collect debts from 7 enterprises, the amount of 1,753 billion VND; Coordinate with the Department of Transport to collect debts of 4 enterprises, amounting to 4,583 billion VND; coordinate with the Department of Natural Resources and Environment to collect tax debts of 33 enterprises, amounting to 17,559 billion VND; propose the Department of Natural Resources and Environment to coordinate with competent authorities to revoke mineral exploitation licenses for 6 enterprises that do not fulfill their obligations to pay the State budget.

Mr. Duong Hong Quang - Deputy Head of Propaganda and Taxpayer Support Department - Tax Department said: "Currently, we are continuing to coordinate with the police agency in handling enterprises with signs of committing crimes, absconding and still owing taxes; regularly coordinating with commercial banks to verify information about enterprises' accounts, coordinating to enforce tax debt collection. In the first 10 months of 2014, we coordinated to verify information, enforce money withdrawal from accounts of 3,488 enterprises; the amount of tax recovered through enforcement was 127.9 billion VND... In addition, we will promote the propaganda of tax laws and policies, focusing on the propaganda of measures to enforce tax debt collection according to the law to enterprises...".

One of the important solutions for tax debt collection is to review and classify debts and tax-indebted enterprises to apply appropriate enforcement measures for each subject. Recently, the Tax Department has directed branches to complete the records of business households that have been classified into the group of difficult-to-collect debts that are eligible for debt cancellation according to the instructions in Circular No. 179/2013/TT-BTC. The overall result has been that the General Department of Taxation has issued a debt cancellation decision for 12,273 business households, the debt amount cleared is 6,774 billion VND. For absconding enterprises that still owe taxes or are dissolved in violation of the law, and enterprises with signs of crime, the records have been consolidated and transferred to the police for timely coordination to prevent violations of tax laws.

Regarding pending debts, the Tax Department issued an official dispatch directing the coordination in handling "virtual" debts such as: Coordinating with the State Treasury to handle current debts for basic construction outside the province, amounts paid to the budget due to errors awaiting adjustment, debts paid to current accounts by mistake, land rent debts awaiting revenue and expenditure recording, debts with exemption and reduction records... In addition, implementing solutions to remove difficulties for enterprises according to the conclusion of the conference with enterprises with large tax debts in Notice No. 375/TB-UBND.TM of the Chairman of the Provincial People's Committee...

According to the statistics, the total tax debt in the province as of October 31, 2014 was 782 billion VND, a decrease of 64 billion compared to the first 6 months of 2014. The tax debt ratio in the estimated budget revenue of 2014 is 12.5%. Thus, although the Tax sector has implemented many measures to collect tax debt, the debt up to this point has not decreased much compared to the debt before June 30, 2014. The reason explained by the Tax sector is that the VAT (quarterly declaration) arising in the third quarter of 2014 declared on October 30, 2014, enterprises have not paid to the budget, causing an increase in debt (19.9 billion VND); an increase in late payment fees arising from July 2014 to October 2014 (19.3 billion VND); The policy on tax declaration has changed to reduce the frequency, so many businesses have switched from monthly tax declaration to quarterly tax declaration, and businesses do not have the financial capacity to pay at once; the policy on VAT refund has changed from negative tax for 3 months to 12 months, leading to many businesses having negative tax for a long time but still not enough for 12 months, so they are not eligible for tax refund to offset debt...

Currently, although the real estate market has shown signs of warming up, it is not sustainable and still has many potential risks; units in the construction sector are facing many difficulties; at the same time, disbursement for projects using budget capital is still slow; strict lending conditions of banks have also greatly affected the financial capacity of taxpayers. Therefore, tax debts in the construction sector account for a high proportion of total tax debts, so the work of urging tax debts for these areas is facing many difficulties. Enterprises that have stopped operating, self-dissolved, do not comply with the Enterprise Law; absconded or have signs of crime still owe taxes, leading to increased difficult-to-collect debts. Tax debts in these cases have increased from 83.6 billion VND (June 30, 2014) to 92 billion VND (currently) and are forecasted to continue to increase in the coming time.

To complete the tasks of 2014 as well as the following period, in addition to exploiting additional revenue sources, the Tax Department has proposed solutions to enhance tax debt collection. Director of the Tax Department Nguyen Dinh Hoa said: “In the coming time, the economic situation will continue to be difficult, affecting the production and business results of taxpayers. Enterprises are facing financial difficulties and are unable to fulfill their obligations, leading to tax arrears. To strive to reduce debt to the lowest level for enterprises and business households, in addition to the synchronous and drastic participation of tax agencies from provinces, districts to tax teams, it requires drastic direction from Party committees and authorities at all levels, and active coordination of sectors.

For the Tax sector, in the coming time, we will continue to do a good job of consulting; proactively coordinate with other sectors in budget collection and tax debt collection; promote propaganda work; review and classify debts and tax-indebted enterprises to apply appropriate enforcement measures for each subject; strengthen supervision and inspection of the implementation of debt collection measures for tax departments and branches. With these measures, we hope that enterprises will improve their spirit of cooperation to ensure revenue for the budget...".

Article and photos:Thu Huyen