Create a legal mechanism to handle irrecoverable tax debts

	Remission of irrecoverable tax debts: Reducing costs and human resource for debt management
	Erasing tax debts: Developing a strict mechanism for inspection and supervision
	Ha Tinh Customs has not yet collected VND 29 billion of irrecoverable tax debts

Do Van Sinh, Standing Member of the National Assembly's Economic Committee

According to the Ministry of Finance's statistics, the outstanding tax debts are still remarkable, by the end of 2018, the debts were still VND 81,618 billion, of which the irrevocable tax debts were VND 41,387 billion. What is your assessment of the management of tax debt of the tax sector?

Currently, legal documents related to tax has specified the tax debt management. In addition, the Ministry of Finance has also issued documents detailing, guiding the implementation or amending and creating conditions for tax agencies at all levels to build effective management processes, helping agencies, sectors, people and enterprises raise their awareness about tax obligations.According to the Ministry of Finance's statistics, the outstanding tax debts are still remarkable, by the end of 2018, the debts were still VND 81,618 billion, of which the irrevocable tax debts were VND 41,387 billion. What is your assessment of the management of tax debt of the tax sector?

The the tax sector has made great efforts in debt management and collection. This is evidenced that revenue from outstanding debt collection has gradually increased from 2015-2018, the revenue was 80 percent of recoverable debts; the average growth rate was 14.4 percent per year. The rate of total debt to total domestic revenue dropped sharply from 12.2 percent in 2014 to 7.6 percent in 2017 and dropped to 6.7 percent by the end of 2018.

However, the socio-economic of our country in recent years has frequently affected by many subjective and objective factors. This also significantly affects the tax administration in general and tax debt management in particular. The objective effects have made tax debts, especially irrecoverable debts increase to more than VND 40,000 billion, including fines for late payment and late payment interest. These debts mainly fall with taxpayers who have died, gone missing or lost their civil act capacity; suffered material damage due to natural disasters, epidemics or fires; bankruptcy and dissolution.

Therefore, though these debts are not handled or written off, the State budget also collects them. While tax agencies still have to manage them. This requires the tax sector to handle irrecoverable debts.

Tax Administration Law No. 38/2019 / QH14 adopted by the National Assembly and effective July 1, 2020, has clarified tax debt management and write-off. In your opinion, is it necessary to issue a resolution on handling tax debts for taxpayers who are unable to pay debts?

Tax Administration Law No. 38/2019 / QH14 only stipulates the handling of tax debts from July 1, 2020 onwards, and tax debts before July 1, 2020 will be governed by the current Law. In fact, when adjusting social phenomena and behaviours, there must be a legal corridor to serve as a basis for agencies and organisations to implement. Comparing with the current Law on Tax Administration showing the law does not have specific regulations on handling debts for taxpayers who have stopped their operation and been actually unable to pay to the State budget. So the amount of tax debt, fines for late payment, late payment interests still lasts long time. There must be a legal corridor to cover cases that taxpayers and tax debt enterprises are no longer able to pay debts to the budget before the effective date of the Tax Administration Law No. 38/2019 / QH14. The issuance of the resolution is necessary to create a legal mechanism to handle these tax debts, fines for late payment and late payment interests.

What do you think about the contents in the draft resolution on handling tax debts for taxpayers who are no longer able to pay debts to the budget?

The resolution on handling irrecoverable tax debts aims to organize the timely implementation of the National Assembly's guidelines and orientations in Resolution No. 55/2017 / QH14 on the request for budget restructuring, strengthening revenue management, including debt handling. At the same time, thoroughly overcoming irrecoverable debts for many years and removing difficulties for taxpayers who have incurred tax debts due to natural disasters, epidemics, fires, unexpected accidents or other force majeure circumstances.

Handling of outstanding tax debts including writing-off fines for late payment and late payment interest is a sensitive issue, so the debts are proposed to be written-off or decision makers must be careful. On the one hand, it is necessary to review debts eligible for freezing and write-off. On the other hand, it is necessary to ensure transparent and fair supervision.

Ho Chi Minh City: Bad tax debts of more than VND 1,500 billion

Regarding the taxpayers, it is worth noting that taxpayers who have left their business address are no longer present at the registered address, or has no contacts. Because, according to our current regulations, they can still operate in other places, even in the name of others. Therefore, there must be specific provisions on the responsibilities of those individuals who intentionally fail to pay their taxes.