Strengthen tax debt collection

(Baonghean) -In 2012, Nghe An Tax Department collected over 1,343 billion VND in tax debt, an increase of 29% compared to 2011 (953 billion VND), contributing to the completion of the assigned budget (103%), reducing the debt by 11% compared to 2011, bringing the year-end debt down to 589 billion VND (the lowest level in the past few years). However, in 2013, after only the first 3 months of the year, the tax debt increased dramatically (up 20.9%) compared to the end of 2012. While the economy has not really recovered, tax debt collection is even more difficult...

According to the report, by March 31, Nghe An's total tax debt was at 712 billion VND, accounting for 14.5% of the 2013 budget, nearly 3 times higher than the target assigned by the General Department of Taxation (5%), up 2.5% compared to 2012. Of which, the business sector owed nearly 685 billion VND, equivalent to 95% of the total debt. By industry, the Construction sector owed nearly 242 billion VND, equivalent to 34%; the Trade and Services sector owed over 40 billion VND, equivalent to 5.6%. However, it is known that among the 91% of recoverable debts, many enterprises and business households are not easy to collect, although the Tax authority has applied measures such as: calculating late payment penalties, announcing on mass media, enforcing through bank accounts...

For example, Vietnam-Laos Economic Cooperation and Investment Corporation Limited owes 20.1 billion VND, of which 96.5% is over 90 days; Central Investment and Development Joint Stock Company owes 18.3 billion VND, of which 74.2% is over 90 days; Investment and Construction Joint Stock Company 24 owes 14.6 billion VND, of which 67.3% is over 90 days; Hanoi Housing Investment and Development Joint Stock Company No. 30 owes 13.9 billion VND, of which 77% is over 90 days...

Some enterprises have large tax debts, including debts from 2006 to present, such as Vietnam-Laos Economic Cooperation and Investment Corporation Limited (on Nguyen Sy Sach Street), Central Investment and Development Joint Stock Company (on Nguyen Thai Hoc Street), Nghe An Bridge and Road Joint Stock Company (on Phan Boi Chau Street), Vinh Viglacera Ceramic Joint Stock Company (now Nghi Hoa Brick Joint Stock Company)... and many enterprises have small tax debts but still deliberately delay, when invited to work, the enterprises committed to the deadline for tax debt payment but still did not do so. There are enterprises with large tax debts that still submit tax declarations regularly every month but do not generate revenue, expenses and taxes. After checking, it was discovered that the enterprise had stopped operating but did not follow the prescribed procedures, and could not contact the director for the tax authority to collect the debt. The above situation shows that debt collection is a difficult process.



Vinh City Tax Department enforces tax debt collection at 757 Joint Stock Company, Le Loi Ward, Vinh City.

Along with implementing solutions to exploit revenue sources and prevent revenue loss, Nghe An Tax Department has strengthened debt collection measures such as: coordinating between units in the industry as well as related industries to urge debt collection; assigning debt collection targets to each unit and individual in conjunction with monthly and quarterly emulation activities... . In the first quarter of 2013 alone, the Tax Department office issued 778 notices to calculate late payment penalties of VND 10.2 billion, collected through bank accounts in 87 cases with an amount of nearly VND 172 billion, and invited 21 enterprises to the tax office to request a commitment to pay. However, up to now, the debt has not decreased but has tended to increase.

Management practices show that the measure of compulsory debt collection through bank and treasury accounts has brought positive results. Thanks to the Coordination Regulation between the Tax Department, Bank and Treasury, in the first 4 months of the year, the Tax Department Office and the Vinh City Tax Department have recovered over 180 billion VND. However, to further improve the efficiency of tax debt collection, it is necessary to have the coordination of sectors such as the Department of Planning & Investment, the Department of Finance, so that based on the functions of each sector, they can coordinate with the Tax authority to collect debts.

Another form of enforcement is to seize assets for auction to recover tax money according to Article 93 of the Law on Tax Administration. This is a stronger deterrent measure, more effective, but when applied in practice in Vinh City, many problems and shortcomings arise, such as: the costs for participating sectors are deducted from the proceeds of auctioned assets (in fact, they must be paid immediately after the enforcement is completed) but then the assets do not have to be auctioned because the enterprise has paid the full tax, so where does the funding come from? Or other assets in the locality where the enforcement is carried out, it is difficult to have coordination among sectors when organizing the enforcement. Not to mention that in many cases, assets that have been mortgaged at the bank will cause disputes when seized.

According to the direction of the Provincial Tax Department, despite the difficulties and complications, enforcement measures will be strengthened in the coming time. Accordingly, the Tax Department will directly seize assets for auction or will use the right to sue some enterprises in the Civil Court.

Duong Minh Duc (Nghe An Tax Department)