'Relaxed procedures' are being exploited by businesses to evade taxes

Recently, there have been subjects taking advantage of the simplification of administrative procedures to take advantage of the suspension, cessation of operations, dissolution, and bankruptcy of enterprises to commit tax fraud and embezzle state money.

The Ministry of Finance has issued Document No. 14092/BTC-TCHQ to the Ministry of Planning and Investment regarding information provision and coordination in enterprise management.

According to this document, in recent times, many procedures for establishing, temporarily suspending business, ceasing operations, dissolving, and bankrupting enterprises... have been simplified and reduced; this has significantly improved and facilitated enterprises to enhance their competitiveness in production and business activities.

However, there have been individuals who have taken advantage of this openness to establish and operate many businesses, or take advantage of the suspension, cessation, dissolution, and bankruptcy of businesses to commit tax fraud and embezzle tax money from the state.

Instructions for declaring and paying electronic taxes for businesses at the electronic tax registration and payment declaration department.

Data from the General Department of Customs on import-export enterprises in 2015 and 2016 shows that there are 49 enterprises with import-export activities of less than one year since the date of establishment and have announced temporary suspension, cessation of operations, dissolution, or bankruptcy.

There are 1,043 enterprises that have abandoned their business addresses and stopped import-export activities for 6 months or more, calculated from the time of their last import-export activities.

There are 15,379 enterprises that have not had import-export activities for 6 months or more without notifying the business authorities of the temporary suspension or cessation of operations, while the enterprise information on the system is "in operation".

24 violating enterprises were discovered by the customs authority, issued a decision to determine tax, and required the enterprises to submit additional tax documents. However, to avoid tax liability, these enterprises abandoned their business addresses, announced dissolution, bankruptcy or registered to temporarily suspend or cease operations. Specifically: Tien Phat Wood Processing and Trading Company Limited, Nhat Tan Company Limited, Dai Tien Company Limited, Phu Vinh Steel Company Limited...

The report of the General Department of Customs also shows that there are 8 enterprises that still owe 12.5 billion VND in import-export tax and have no information confirming tax debt at the customs agency, but have information about dissolution on the national data system. These are Dan Thai Limited Liability Company, Pacific Food Limited Liability Company, An Thinh Phat Limited Liability Company...

According to the Ministry of Finance, subjects often use tricks such as using their own name or hiring others to use their own name to establish many businesses to participate in import-export activities. After a period of operation, if there is a risk of being discovered for fraud, they will temporarily suspend operations and switch to other business activities, or use import-export businesses simultaneously or alternately to avoid inspection and control by customs authorities; or when violations are discovered by authorities, they will stop operations, abandon business addresses to avoid tax obligations or legal responsibilities...

To facilitate and strengthen management of law compliance for enterprises, the Ministry of Finance requested the Ministry of Planning and Investment to study and perfect the mechanism for establishing and managing enterprises to overcome the situation of enterprises taking advantage of fraud.

During the time when a mechanism for coordination, exchange and provision of information for business management has not been established, the Ministry of Finance requests the Ministry of Planning and Investment to assign a focal point to coordinate with the General Department of Customs to provide information on the situation of temporarily suspended, dissolved, bankrupt businesses, etc.

According to Tin Tuc Newspaper