The General Department of Taxation has revealed that they are facing difficulties recovering debts of VND45 trillion (USD2 billion) from enterprises nationwide.
Enterprise completing tax procedures in Hanoi’s Hai Ba Trung District's Tax Office
The Department of Taxation in Ba Ria-Vung Tau Province requested to write off tax debts for 1,999 cases of missing or dead business owners. The total debt has reached VND10 billion but the department did not provide detailed documents for each case.
In some provinces such as Nam Dinh or Thai Binh, many cooperatives have disappeared or shut down after collecting taxes from the farmers.
Trinh Hoang Co, Head of the Debt Management and Tax Recovery Department said bad debts in 2012 reached VND6.2 trillion, increased VND1.3 trillion compared to 2011 and accounted for 14% of the total tax debts. Most of the debts were from dissolved or bankrupted enterprises, or missing or dead owners. These debts would be waved.
"The department of taxation would only forgive the debts for owners that were able to provide detailed documents on their situation. Business owners that don't have death certificates or enterprises that didn’t make tax returns and tax declarations before they went into bankruptcy still have to pay their debts." Co said.
Moreover, the amount of tax debts that are still waiting to be written off, been granted extended deadlines or offered reductions amounted to VND4.5 trillion, accounting for 10% of the total debts. According to the General Department of Taxation, debts of state-owned enterprises, FDI enterprises and private enterprises totaled VND35.5 trillion.
Many enterprises filed documents when two rounds of tax debts extension and reduction were implemented in 2012. However 90% of them were unqualified and many made up lies to ask for extensions.
"Some enterprises bombarded us with documents. They kept re-sending the files after we refused their requests. There is one enterprise who sent files 11 times and we still had to give them feedback each time." he said.
As of November 20, 2012, taxation departments enforced tax payment for 19,000 debtors with VND8.8 trillion, including 10,000 enterprises whose debts were 90 days past the deadline. Some even tried to disperse their assets.
Bui Van Nam, Chief of the General Department of Taxation said they have tried many methods in order to collect the debts but was a hard task due to the economic downturn.
The taxation departments will tighten their monitoring over big enterprises to prevent illegal transfer pricing practices. Other industries would also be put under scrutiny are mining, real estate and tourism.
