Cua Lo Town: Tax loss in hotel and motel business

Comrade Hoang Viet Duong - Member of the Provincial Party Executive Committee, Vice Chairman of the Provincial People's Council as head of the monitoring delegation. Photo: Mai Hoa

Tax debt is increasing

On the afternoon of April 19, the Provincial People's Council had a working session with the Town People's Committee and the Tax Department of Cua Lo Town on tax management and collection in the area according to the Provincial People's Council's supervision program on budget collection in 3 years (2016 - 2018).

According to the report from the Town Tax Department, the budget revenue in the area in the last 3 years has increased and exceeded the assigned estimate. Specifically, in 2016, the total revenue reached 305.2 billion VND; in 2017, it was 465.5 billion VND; in 2018, it was 403.7 billion VND.

The Tax Department has also paid attention to propagating and supporting taxpayers to carry out procedures in declaring and paying taxes conveniently. The unit has also drastically implemented many solutions for debt management and tax debt enforcement, including penalties for late tax payment and tax debt enforcement through banks or through notification of invalid invoices.

Chart of total amount collected through tax debt enforcement and collection and settlement through inspection by the Tax Department of Cua Lo town. Performed by: Huu Quan

However, tax debt in the town is still high. Specifically, total tax debt in 2016 was more than 5.3 billion VND, accounting for 1.7% of total revenue; in 2017 it was more than 6.6 billion VND, accounting for 1.4% of total revenue; in 2018 it was more than 8.1 billion VND, accounting for 2% of total revenue.

Also according to the Tax Department of Cua Lo town, after nearly 2 years of implementing the task of authorizing tax collection for business households with the town Post Office, the tax debt of this group has increased with the tax debt as of February 28, 2019 being 970 million VND.

Mr. Vo Van Hung - Vice Chairman of the Town People's Committee said that tax losses in the hotel and motel business sector are still large. Photo: Mai Hoa

Tax loss in the hotel and motel business sector

According to Mr. Vo Van Hung - Vice Chairman of Cua Lo Town People's Committee, budget collection in the area is currently difficult, because enterprises in the town are mainly small and micro.

On the other hand, out of a total of 360 enterprises, more than half are in the hotel and motel business; however, this sector is causing huge losses because there are no solutions or measures to manage and monitor the number of guests at the establishments.

There is also the situation of tax arrears for non-agricultural land due to previous loose management and currently the locality is applying the collection when there is a transaction or construction on a land plot with tax arrears.

The Vice Chairman of the Town People's Committee also recommended that the province should resolutely revoke projects that have been licensed for 10-20 years but have not been implemented in order to create investment opportunities for other businesses and promote increased revenue for the town.

The Provincial People's Council's monitoring delegation requested the town to pay attention to accurately reviewing business households and tax-paying households to avoid missing any subjects. Photo: Mai Hoa

At the meeting, members of the Provincial People's Council's monitoring delegation raised many issues. That is, has the monitoring and inspection of enterprises and individual business households in the area been accurate?

How is the tax payment supervision of enterprises headquartered in the area but not declaring and preparing tax records in the town? Is the status of invoice usage and payment; the disclosure of tax records and tax debts ensured transparency and fairness?

The situation of enterprises reporting long-term losses to evade corporate income tax, but not being inspected, checked and handled promptly...

Vice Chairman of the Provincial People's Council Hoang Viet Duong requested the town to be more determined in collecting outstanding debts and preventing tax losses. Photo: Mai Hoa

Concluding the meeting, Vice Chairman of the Provincial People's Council Hoang Viet Duong requested the Party Committee, government, and Tax Department of Cua Lo town to strengthen leadership and direction of budget collection work, ensuring sustainable revenue increase.

On the other hand, localities also need to focus on good coordination with all levels and sectors to update correctly and fully the business entities and taxpayers, not omitting any taxpayers; associated with closely reviewing all types of taxes, improving the quality of tax compilation for the right subjects, publicly and transparently; improving the quality of inspection and examination work, preventing tax losses, especially personal income tax, value added tax, corporate income tax, preventing enterprises from continuously reporting losses for many years to evade taxes.

The Vice Chairman of the Provincial People's Council also requested the Town Tax Department to be more drastic in collecting tax debts, avoiding the increase in tax debts over the years; proactively receiving people and resolving tax-related petitions...