Strengthening 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, in just the first 3 months of the year, the tax debt has 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, as of March 31, Nghe An's total tax debt was VND712 billion, accounting for 14.5% of the 2013 budget, nearly three times higher than the target assigned by the General Department of Taxation (5%), an increase of 2.5% compared to 2012. Of which, the business sector owed nearly VND685 billion, equivalent to 95% of the total debt. By industry, the Construction sector owed nearly VND242 billion, equivalent to 34%; the Trade and Services sector owed over VND40 billion, equivalent to 5.6%. However, it is known that among the 91% of recoverable debt, 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, through review, it is discovered that the enterprise has stopped business but did not follow the prescribed procedures, and the director cannot be contacted for the tax authority to collect the debt. The above situation shows that debt collection is an arduous process.



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

In parallel with the implementation of solutions to exploit revenue sources and prevent revenue loss, Nghe An Tax Department has strengthened the implementation of measures to collect outstanding debts such as: coordination between units in the industry as well as related industries to urge debt collection; assign debt collection targets to each unit and individual associated with monthly and quarterly emulation work... . Particularly at the Tax Department office in the first quarter of 2013, 778 notices were issued to calculate late payment penalties of 10.2 billion VND, collected through bank accounts in 87 cases of nearly 172 billion VND, and invited 21 enterprises to the tax agency 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 accounts at banks and treasuries 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 Office of the Tax Department 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, to coordinate with the Tax authority to collect debt based on the functions of each sector.

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: 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 all the 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 banks will cause disputes when seized.

According to the direction of the Provincial Tax Department, despite the difficulties and complications, enforcement measures will be intensified 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)