Ministry of Finance proposes to erase tax debts in some cases

In the submission to the Government on the drafting of the revised Law on Tax Administration, the Ministry of Finance proposed amending regulations on tax debt cancellation, late payment fees, and fines for a number of specific cases to conform to reality and new regulations of relevant laws.

Regarding debt cancellation for individuals, the Ministry of Finance said that Article 65 of the Law on Tax Administration stipulates 3 cases of tax debt and fine cancellation; including the provision that "individuals are considered by law to be dead, missing, or have lost civil act capacity without having assets to pay outstanding tax, late payment, or fines". However, in reality, the implementation of tax debt cancellation for individuals who are dead, missing, or have lost civil act capacity without having assets to pay tax has encountered difficulties.

Explaining this issue, the Ministry of Finance said that currently, no state agency is responsible for confirming whether a deceased individual still has assets or not. On the other hand, when an individual who still owes taxes dies, if there are still assets, these assets are still under the use of their family, the tax authority cannot carry out the seizure and auction of these jointly used assets to recover tax arrears, if this is done, it will cause negative reactions in public opinion. Meanwhile, Article 65 of the Law on Tax Administration only allows debt cancellation for individuals, there is no provision for debt cancellation for deceased private business owners.

Therefore, according to the Ministry of Finance, it is necessary to amend the regulations on tax debt cancellation, late payment fees, and fines for tax debtors who are deceased, missing, or have lost civil act capacity (in Clause 2, Article 65 of the Law on Tax Administration) by adding the words "including private business owners".

This solution, according to the Ministry of Finance, "is consistent with relevant legal documents, does not cause negative public opinion, and demonstrates the humane nature of the law."

Regarding debt cancellation for debts over 10 years old, according to the provisions of the Law on Tax Administration, in this case, if the tax authority has applied all enforcement measures, the tax debt will be cancelled.

However, up to now, there has been no case that meets the conditions for tax debt cancellation due to actual implementation. There are tax debts that are over 10 years old but cannot be cancelled because they do not meet the condition of "applying all enforcement measures". Because the enterprise was allowed to dissolve by the Department of Planning and Investment and had its business registration certificate revoked before the tax authority implemented enforcement measures; it is not possible to implement enforcement measures to seize assets because the assets being enforced are houses and essential household items for the subject of enforcement and their families.

For taxpayers who are organizations, it is not possible to apply compulsory measures to deduct a portion of salary or income; or in many cases, enterprises flee their address or voluntarily stop doing business, and the tax authority discovers that the invoices of these enterprises have expired... At the same time, the regulation of a 10-year period for tax debt cancellation applied to these cases is too long (experience from other countries often applies a period of 2 to 7 years).

Therefore, the Ministry of Finance proposed to amend the regulation to stipulate a 5-year period. And add the regulation: “In the next 2 years from the date of debt cancellation, the enterprise founder and legal representative are not allowed to establish a new enterprise, except in the case where the taxpayer fully pays the tax amount according to the debt cancellation decision to the state budget.”

Debt cancellation for debts that are no longer collectible. According to the Ministry of Finance, the Law on Tax Administration has no regulations for this case.

The Ministry of Finance said that from July 1, 2007 to December 31, 2012, the domestic economy continuously faced many difficulties and challenges in the context of complicated developments in the world economy, inflationary pressure and great macroeconomic instability; the monetary market was not really stable, bad debt tended to increase; production and business faced many difficulties; the real estate market was sluggish along with natural disasters, fires and accidents occurring continuously, which greatly affected production, business and people's lives.

Therefore, many taxpayers do business at a loss. When facing difficulties, business at a loss or being investigated... many taxpayers do not follow the correct procedures for suspending business, ceasing business, or dissolving business.

The tax debt that arose before the time of business suspension (although enforcement measures have been applied but have not been recovered) continuously increases due to late tax payment while the taxpayer has no resources or ability to pay the debt due to business suspension or dissolution.

To solve the problem, the Ministry of Finance believes that it is necessary to add to Article 65 of the Law on Tax Administration a case where tax debt can be erased: "Tax debts, late payment fees, and fines that are no longer subject to collection and these tax debts, late payment fees, and fines that have been over five years since the tax payment deadline" are eligible for debt erasure".

This, according to the Ministry of Finance, will contribute to "reducing virtual debts that cannot actually be recovered."

According to the draft proposal, a significant portion of the tax debt is late payment penalties of equitized state-owned enterprises, because when transferring finances from state-owned enterprises to joint stock companies, only the tax debt is transferred, not the corresponding late payment penalties.

Therefore, to contribute to reducing debt for the state budget, reducing resources and costs of monitoring tax debt, it is necessary to add a provision that late payment (fees) will not be calculated on the tax amount incurred by state-owned enterprises that have been handed over to joint stock companies when implementing equitization before July 1, 2007.

The draft also proposes to cancel debts for a group of enterprises established under the management of political organizations, socio-political organizations such as the Cooperative Union, Provincial Party Committee, City Youth Union, Provincial Youth Union... that have been dissolved by the managing unit but still owe taxes and fines and the authorities no longer have information about these enterprises.

» Nghe An Tax Department publishes list of businesses with large tax debts

According to Thuy Duong/baotintuc