Economic Sector

Last updated: Tuesday, March 26, 2019


Aggressively Handling Tax Liability

Posted: Thursday, December 27, 2018

"The handling and recovery of tax arrears and the reduction of the tax debt ratio in 2018 to less than five per cent of the total State budget revenue" is a request of the Government to the Ministry of Finance and the General Department of Taxation, as stated in Resolution 01/NQ-CP on the major tasks and solutions to the socio-economic development plan and the State budget estimates in 2018.

Tax debt tends to increase
According to the reports of the provincial/municipal tax departments, the total tax amounts managed by tax offices (excluding tax amounts already remitted into the state budget and pending tax debts) up to September 30, 2018 is VND82,961 billion, up 13.4 per cent compared with that of December 31, 2017, of which the taxable debt was VND48,019 billion, accounting for 57.9 per cent of total tax debt, up 15.1 per cent over December 31, 2017. Unpaid tax debt is VND34,942 billion, accounting for 42.1 per cent of total tax debt, up 11 per cent from December 31 2017. Claimed debt is VND1,256 billion, up 3.4 per cent (about VND42 billion) compared with December 31, 2017.

In most localities, tax arrears increased against that of December 31, 2017. The above-mentioned high tax debts, apart from objective reasons, are due to the subjective reason which is the coordination between the functional branches and the revenue-managing agencies at some places, which are not frequent, tight and inactive. Some tax departments, tax offices are not really drastic in their actions.

On November 22, the General Department of Taxation issued Decision 1914/QD-TCT on promulgation of the plan to deal with tax debts managed to implement Directive 04/CT-BTC dated October 15, 2018 of the Ministry of Finance on enhancing the management of debt and coercive recovery of tax debts to reduce the debts of the tax administration toward the goal of creating a clear change in the debt management and tax debt enforcement, contributing to increasing state budget revenues and reducing tax arrears.

Synchronised solutions
To achieve the set objectives, the tax sector has identified one of the long-term solutions is the development of mechanisms and policies on debt management and coercive recovery of tax debt to apply measures to handle tax arrears in accordance with the Law on Tax Administration. Accordingly, the noteworthy contents are as follows: The General Department of Taxation shall enhance the direction and supervision of the local tax departments in fully carrying out the task of handling debts, forcibly debiting debts and publicising information of taxpayers.

For debt-recoverable group: The plan proposed by the Taxation Department indicates the different options for implementing three types of debt: (1) Implementing measures to promote debt collection; (2) implementation of coercive measures; (3) public disclosure of taxpayer information.

In addition, the Tax Department also provides detailed solutions to the handling of outstanding tax liabilities and pending tax liabilities; to review and classify tax debts accurately and correctly; dealing with tax debts which are no longer capable of collecting budget revenues; coordinate with local authorities to handle tax arrears.

Especially local authorities need joint efforts. In particular, the tax authorities have clearly identified the coordination with local Department of Planning and Investment; Department of Finance, State Treasury; Police Office; Department of Information and Communication. The Natural Resources and Environment Department will focus on dealing with land use levies, land rents and mineral mining rights. The Department of Planning and Investment will implement coercive measures to withdraw business registration certificates of taxpayers that are liable to tax arrears or failed to recover tax arrears. Department of Finance and the State Treasury will recover tax debts of construction investment projects through the capital disbursement of capital construction investment. The Department will make a list of the construction enterprises with tax arrears and submit to the State Treasury to collect tax debts; coordinate with the police office to enforce the debt collection of enterprises or business households who have escaped or evacuated property or intentionally owed taxes. At the same time, they will provide information and transfer the dossiers to the police offices, investigating cases showing signs of tax law violation. The information and communication agencies and mass media agencies in the localities shall propagate, disseminate and explain the law provisions on tax arrears and taxpayers' tax debts, improving the compliance of people and disclose information of businesses that have tax arrears.

Huong Hau

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