Difficulties in recovering and handling tax debt of absconding businesses

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Violating processing materials were seized by the Anti-smuggling and Investigation Department – General department of Customs in coordination with Ho Chi Minh City Customs. Photo: T.H

More than 1,800 businesses with tax debt fled

According to Ho Chi Minh City Customs Department, in recent times, the unit has drastically implemented many solutions to handle and collect tax debt. In cases where businesses with tax debt are no longer operating, debt collection is extremely difficult.

Border and non-border customs Sub-department have also taken drastic measures to enforce tax debt, especially for businesses with tax debt that have stopped operating at their business registration address.

Saigon Port Area 4 Border Gate Customs Sub-department said that based on the compliance with tax payment obligations of businesses, continuously in recent times, the Sub-department has issued many official dispatches requesting the Business Registration Office - Ho Chi Minh City Department of Planning and Investment to take measures to revoke Business Registration Certificates for many businesses with unpaid tax debt. Recently, An An Gia Single-Member Limited Liability Company (tax code: 0313173963, address: 9th floor, Vien Dong Building, No. 14 Phan Ton, Da Kao Ward, District 1, Ho Chi Minh City) owes more than 5.5 billion VND, and has been requested to be revoked the Certificate of Business Registration by the Customs authority.

An An Gia Single-Member Limited Liability Company was established in 2015, with the main business being food trading. Currently, this enterprise has ceased business operations, but has not completed the tax code closing procedures and has not notified the Customs authority.

Similarly, Long Son Nguyen Single-Member Limited Liability Company (address: 52 Dong Du, Ben Nghe Ward, District 1, Ho Chi Minh City) owes taxes of over VND 953 million at Saigon Port Area 4 Customs Sub-department for many years. This year, businesses still do not fulfill their tax payment obligation to the state budget even though the Customs agency has implemented enforcement measures. This enterprise has stopped operating at its registered business address for more than 1 year, but did not notify the Customs authority according to regulations.

In order to recover tax debt for many cases with large debt amounts and procrastination for many years, in 2017, Ho Chi Minh City Customs Department sent an official dispatch to the Department of Security - Finance - Monetary Affairs and Investment (A84) requesting support to help prevent tax evasion and tax debt delay occurring in Ho Chi Minh City, etc.

It is difficult to determine the subject and address of the notification

In addition to difficulties in collecting tax debt from enterprises importing goods, Ho Chi Minh City Customs Department also faces many difficulties and obstacles in implementing tax notices for export processing and manufacturing enterprises which are no longer operating at their registered business address and have not submitted a final settlement report.

Currently, Ho Chi Minh City Customs Department has discovered and identified 45 cases of violation, of which 14 cases have not yet determined the amount of payable tax, 3 cases have determined a part of the total payable tax amount, 28 cases have determined the amount of payable tax, of which 2 cases have been transferred to the Police Department for Investigation of Crimes of Corruption, Economics, and Smuggling (PC03) - Ho Chi Minh City Police.

In all of the above cases, Ho Chi Minh City Customs Department has verified the company's operating status in accordance with the provisions of Article 60 of Circular No. 38/2015/TT-BTC dated March 25, 2015, amended and supplemented in Clause 39, Article 1 of Circular No. 39/2018/TT-BTC dated April 20, 2018 of the Ministry of Finance. However, Ho Chi Minh City Customs Department has not issued a tax notice due to problems with tax notification procedures; The subject and address receiving the notification cannot be determined because the enterprise is no longer operating at the registered business address.

According to Ho Chi Minh City Customs Department, based on Clause 6 and Clause 7, Article 16 of the Law on Export Tax and Import Tax stipulating that raw materials and supplies imported for processing and export production are exempt from import tax, the basis for determining goods that are exempt from tax specified in Article 10, Article 12 of Decree 134/2016/ND-CP dated September 1, 2016, Article 36, Article 37 of Decree 08/2015/ND-CP dated January 21, 2015 of the Government (amended and supplemented in Decree 59/2018/ND-CP), in case the authorities determine that the enterprise does not operate at the address notified to the Customs authority, the imported raw materials and supplies for processing and export production do not meet tax exemption conditions. Therefore, after verifying that the enterprise does not operate at the registered address, the Customs authority determines the amount of tax the enterprise must pay.

Because it does not issue tax notices or tax assessment decisions, the Customs agency only sends verification and coordination documents to the competent authorities (Tax agency, Immigration Management agency, etc) for the reason "the enterprise did not submit the final settlement report"; There is no administrative notice of tax debt of enterprises to coordinate the implementation of enforcement and handling measures.

In addition to the above problems, Ho Chi Minh City Customs Department has problems implementing instructions for determining tax rates for organizations and individuals that have fled or gone missing, but the Customs agency does not have actual rates to determine he tax amount, etc.

According to statistics from the Import-Export Tax Division - Ho Chi Minh City Customs Department, among the 4,800 businesses that owe taxes at Ho Chi Minh City Customs Department, there are more than 1,800 businesses that are no longer operating at their registered business address or have stopped operating (equivalent to more than 1,300 billion VND in debt); Nearly 200 businesses have had their Business Registration Certificates revoked (equivalent to more than 400 billion VND in debt). The debts of these fleeing businesses account for the majority of uncollectible debts of Ho Chi Minh City Customs Department.