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Vietnam GDT proposes to erase $515M in irrecoverable debts

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The planned tax debt elimination contains interest and administrative fines on late payments but does not include the original debts. DAIDOANKET.VN

Vietnam GDT proposes to erase $515M in irrecoverable debts

Vietnam's General Department of Taxation (GDT) has proposed to erase 12 trillion dong ($515 million) out of the total 30 trillion dong in irrecoverable tax debts.

The planned tax debt elimination contains interest and administrative fines on late payments but does not include the original debts, said GDT Policy Department director Luu Duc Huy.

In recent years, the National Assembly has amended and supplemented many tax laws, leading to changes in tax policies. However, no regulations on resolving outstanding tax debts in the long run have been promulgated.

The government has assigned the Ministry of Finance to review and complete the draft resolution on clearing tax debts that are not able to be collected and submit it to the National Assembly Standing Committee for comments, which will be included in the 2019 law and ordinance building programme.

The proposed deletion is applicable for seven groups of taxpayers including those who died, were missing and lost civil act capacity, and enterprises who went bankrupt, were dissolved, terminated business operation, did not operate at the registered business addresses, had business registration certificates revoked or faced force majeure hardship, Huy told tienphong.vn.

According to GDT, the total outstanding debts reached around 30 trillion dong by the end of last year, of which tax arrears were more than 17 trillion dong, interests and penalties for late payments were nearly 12 trillion dong.

There are many reasons for this situation. First of all, there are 2,635 taxpayers who were dead, missing or lost civil act capacity with tax debts of 460 billion dong.

There are 24,113 enterprises that were dissolved but did not follow dissolution procedures and they owed tax of 2.07 trillion dong. In addition, 216 enterprises were insolvent and went bankrupt but failed to pay tax of 398 billion dong.

Notably, there are about 731,696 taxpayers abandoning their business addresses or having their business registration certificates revoked who owed tax amounts of nearly 23.9 trillion dong.

“The Tax Administration Law stipulates that the late payment interest is 0.03 per cent per day on the overdue payments. This is a necessary sanction,” GDT said.

Total fines and interest on late payments of all mentioned above taxpayers reached 12 trillion dong by the end of last year but were unable to be collected, the taxation authority said.

In cases the authority finds out the tax debt elimination did not follow the law or the taxpayer resumes production or business operation or establishes a new business, the elimination decision would be cancelled, and the taxpayer must still pay the tax debt, it said.

This resolution will take effect on January 1 next year and will be implemented within three years from the effective date. VIET NAM NEWS/ANN


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