Despite the authorities suspending operations and freezing bank accounts, they have still proved unable to collect VND434bn (USD19.7m) in back taxes from two gold mines in Quang Nam Province.
The gold mines are operated by Besra Vietnam, a subsidiary of Canadian Besra Inc. The Phuoc Son Gold Company Ltd owes VND334bn and Bong Mieu Gold Mining Company Ltd owes VND100bn in natural resources, contractor, value added and personal income taxes, land rental fees, environment protection fees and fines for the late payment of taxes and fees. The companies have also been accused of selling gold at cheap prices so their mother company can evade taxes.
Phuoc Son Gold Company Ltd owes VND334bn in back tax
In 2014 Quang Nam Provincial Tax Department froze the bank account and Besra Vietnam’s value-added tax refund. However, the tax arrears haven't been paid. Ngo Bon, head of Taxation Department of Quang Nam Province, admitted they faced a dead end. It's highly likely that the companies will declare bankruptcy and have their debts erased.
Previously, the authorities revoked the business licences of the companies.
On July 8, Phuoc Son Gold Company sent a roadmap for debt restructuring and payments to Quang Nam Province’s authorities. The company promised to pay taxes within 12 months starting from August 16. Each month, the company was scheduled to repay USD27.9bn to the state budget. This move was intended to help Phuoc Son resume work in August and pay taxes to the local budget.
Viet A Bank, which acquired a 35% stake in Phuoc Son Company last year, offered to act as a guarantor for the company’s tax payments.
It's unclear whether Bong Mieu Gold Mining Company has any plans to pay its outstanding taxes. Its mining licence also expired in March but the company then continued to operate illegally.
During a meeting with leaders of Quang Nam Province on July 10, Deputy Prime Minister Truong Hoa Binh said the two gold mines wouldn’t be allowed to continue operations until they paid their taxes. If Viet A Bank wants to be Phuoc Son's guarantor, they must provide more detailed papers and clearly state that they will take all responsibility.