Overdue taxes in the customs sector amounted VND6,173 billion as of May 31, 2013, an increase of VND361 billion over December 31, 2012. Despite great efforts, the customs sector only managed to collect VND843 billion in past-due taxes in the first five months.
In an analytical report on unpaid taxes, the Export and Import Tax Bureau under the General Department of Customs said the amount of above taxes included uncollectible taxes before 2005. These long-dated debts occurred because the old Law on Export and Import, effective before January 1, 2006, allowed enterprises to owe taxes without binding conditions that they were proven good taxpayers. Many companies took advantage of easygoing tax laws to delay tax obligations.
The enforcement of the Law on Tax Administration, which took effect on July 1, 2007, met with problems and limitations that weakened recollection of taxes in arrears. Many companies took advantage of grace period to delay their tax payment duties while the cooperation of competent authorities in collecting overdue taxes, providing taxpayer information and the shortage of taxpayers’ financial information at banks like accounts and balances resulted in a rise in tax debts.
Another reason is ineffective implementation of coercive measures stipulated in Article 93 of the Law on Tax Administration. The orderly implementation of coercive measures (if not found taxpayers’ acts of flight or property dispersion and hiding) is not really effective because immediate and most effective measures are not allowed to be applied.
Due to effects of economic slowdown, many companies were financially troubled. According to provincial/municipal taxation authorities, overdue tax collection was stepped up in the first half of 2013. However, the result still fell short of expectations because many companies were struggling with hardships to survive.
Collecting taxes in arrears is an important task in State Budget collection. Hence, to reduce behindhand taxes, the General Department of Customs directed local customs units to propose competent authorities to write off taxes in accordance with the Law on Amendments and Supplements to a Number of Articles of the Law on Tax Administration, effective on July 1, 2013 (taxes overdue in 10 years will be written off).
In case companies end operations and do not belong to “write-off” cases, local customs agencies will transfer such cases to police for further settlement.
In addition, the General Department of Customs required localities to apply the order of tax payment specified in the Article 45 of the Law on Tax Administration and Clause 2, Article 11 of the Law on Amendments and Supplements to a Number of Articles of the Law on Tax Administration. Besides, customs offices coordinated with local tax agencies to collect belated import and export duties from companies granted VAT refunds at tax offices. They also closely monitored temporarily collected taxes to request taxpayers to settle tax obligations when the term is overdue. They kept a close watch on outsourced goods and grasped the maturity of outsourcing contracts to ask companies to pay taxes on goods consumed in the country.
The General Department of Customs continued instructing and urging subordinated customs agencies to settle overdue taxes and attach accountability of customs officers to their work performances in order to obtain the highest result in past-due tax collection. In case of huge tax debts, customs offices will coordinate with police force, commercial banks and related entities to take back debts.
In particular, the General Department of Customs is building the procedure for overdue tax monitoring and management. Accordingly, this procedure will specify contents, sequence, formalities and time of tax debt monitoring and management of export and import goods. This process will be also applied to tax debt monitoring and management of export and import goods at all-level customs organs. This procedure is expected to be a very effective solution to overdue tax collection.
Hien Thinh
Vietnamese
