Difficulties during tax debt collection in Quang Ninh Customs Department

	In December 2016, Hanoi announces 144 enterprises with tax debts
	Hanoi continues to publicize businesses which have tax debt
	21 provinces and cities collect revenue over 90%

Operations at the Cam Pha Customs Branch. Photo: Quang Hung.

In order to accomplish the task of tax debt collection, in recent times, along with the application of coercive measures, the Quang Ninh Customs Department has actively established working teams to implement tax debt collection for the State budget, at headquarters of enterprises. In particular, there are many working teams of the Quang Ninh Customs Departments and several working teams of Customs and local Police. However, in fact, when Customs officers worked with enterprises about tax debts, there were always difficulties.

Regarding tax debt collection, the Head of Import-Export Duty Divison under the Quang Ninh Customs Department, Mr. Nguyen Huy Dong said at that time, we went to a business headquarters (based in Thanh Xuan District, Hanoi). Based on the address which the enterprise registered with the authorities, the working team came to the business heaquarters for the first time. But the business heaquarters was just a house without a business nameplate. Then, a middle-aged woman opened the door. Upon hearing the announcement of the working group, the woman said that the person whom the working group was looking for was in Bac Ninh province. Realizing unusual and suspicious attitudes of the woman, the working team decided to coordinate with the local Police force to go to the business headquarters for a second time. As expected, when seeing the local Police force, the woman had to confess that she was the director of the enterprise. However, she said that her enterprise could not afford to repay because all valuable assets of the enterprise were mortgaged and she promised to pay tax debts as soon as possible!

It was one of the difficult situations that working teams face on tax debt collection of the Quang Ninh Customs Department. Anyway, in the above case, the working team could still meet the director of the enterprise and received what she promised. In many other cases, the working team was unable to meet the directors even when they still received phone calls.

In comparison with the task of tax debt collection assigned from the General Department of Vietnam Customs (4.3 billion vnd), to date the Quang Ninh Customs Department has collected a tax debt of 3.79 billion vnd (88.1%). Despite the implementation of many coercive measures, the Quang Ninh Customs Department acknowledged that it was very difficult to meet the target set by the General Department of Vietnam Customs. Because most enterprises with tax debts were unable to repay with property or assets mortgaged. Accordingly, these enterprises were mainly private enterprises, so they were not on the list of tax debt exemption. In addition, there have been a number of State-owned enterprises which have been dissolved, merged or equitized on the list of tax debt exemption under the provisions of Circular 179/2013/TT-BTC of 2nd December 2013, but they have not had enough records to enjoy tax exemption or they have had more than 10 years of tax debts, which has caused difficulties for competent authorities to solve.

In 2016, Quang Ninh Customs Management controlled 112.2 billion vnd of tax debts. Specifically, there was more than 110.6 billion vnd of bad debts, more than 699.1 million vnd of payable debts, and 940.6 million vnd of tax debt exemption, reduction, or renewal. The bad debts include the taxpayers’ liabilities with dissolution of competent authorities; tax debts of taxpayers under investigation and prosecution; and taxpayers’ debts with no business registration or supension of business.

Analyzing tax debts of the Quang Ninh Customs Department, Mr. Nguyen Huy Dong said that tax arrears of the Quang Ninh Customs Department arose over 20 years, from 1997 to date. Every year, the Quang Ninh Customs Department always usd strict measures to collect tax debts and implements coercive measures under current regulations. In the legal coercive measures, the Quang Ninh Customs Department has only carried out 4 measures, including: blocking bank deposits of enterprises; cessation of Customs procedures; requesting Tax Agency to announce bills no longer valid; and collaborating with the Department of Planning and Investment to revoke the business license. The remaining coercive measures have been not feasible, including: salary deduction (for employees and workers’ salary); and collecting debts from the assets of enterprises. The main reason is that most companies have not cooperated with Customs authorities or have been unable to withdraw or continue business activities.

Review and issue a full notice of tax debts VCN- The General Department of Taxation has recently issued Official Letter No. 5221/ TCT-QLN to request Taxation ...

The management and collection of overdue tax debts of many enterprises over the years (mainly enterprises ceasing business operations) in the Quang Ninh Customs Department has not been efficient. Therefore, according to the Quang Ninh Customs Department, the competent authorities should study to promulgate suitable regulations, which will handle enterprises with overdue tax debts strictly and effectively.