Drastically recover tax debt in the last months of the year

	Create a legal mechanism to handle irrecoverable tax debts
	Suggestion to revoke business registration certificates of enterprises owing debts
	Why do real estate businesses owe high taxes?

In order to manage tax debt, tax agencies at all levels are assessing, classifying and standardizing tax debt data to findappropriate debt collection solutions. Photo: T.Linh.

Focus on urging debt recovery

According to a report by the General Department of Taxation, the total amount of tax debt as of the end of September 2019, was 80,786 billion VND, down 3 percent compared to the same period in 2018, and down 2.4 percent compared to August 31, 2019. In particular, the taxable debt is 41,472 billion VND, accounting for 51.3 percent of the total tax debt, down 12.5 percent over the same period in 2018, down 5percent compared to August 31, 2019. Notably, the tax debt that is not recoverable from missing and dead people,or incapable of civil acts, related to criminal liability, bankrupt, terminated production and business activities, not operating at the registered business address was VND 39,314 billion, accounting for 48.7 percent of the total tax debt, up 9.7 percent over the same period in 2018.

According to the General Department of Taxation, the entire tax sector has focused on urging the recovery of tax debts, so the amount of tax debt collected has increased over the same period. By the end of September 2019, tax agencies at all levels have implemented measures to urge debt collection byDecember 31, 2018 to reach VND 24,767 billion, equal to 63.9 percent of the total debt up to 90 days and over 90 daysbyDecember 31, 2018. Ofwhich, revenue from debt management is 15,803 billion VND; collection by debt enforcement measures is 8,964 billion VND.

In order to manage tax debt, tax agencies at all levels are continuing to assess, classify and standardize tax debt data, based on which appropriate debt collection solutions are proposed. At the same time, the tax industry has strictly implemented measures to recover tax debts of the collection management agencies, such as: deducting money from accounts, freezing accounts, announcing invalid invoices and lists, property distraint, auction of distrained properties, revocation of business licenses and disclosure of taxpayers' information on mass media. These measures are particularly concentrated for businesses that deliberately rely on tax debt. Tax agencies at all levels closely coordinate with the party committees and local governments in the recovery of tax arrears; set up a steering committee to prevent losses, recover outstanding debts, focus on recovering land-related debts of projects managed by local governments.

Reduce tax debt ratio to below 5 percent

In order to ensure the fulfillment of the budget collection task in 2019, to fully recover tax arrears into the state budget, strive to achieve the target of tax arrears assigned by the Government and the Ministry of Finance and the General Department of Taxation. Directors of tax departments shall focus on directing their affiliated units to speed up the implementation of measures to handle, urge and coerce debts and publicize them in the media. It is sure that by the end of 2019, the tax debt ratio in the area will be reduced to below 5percent of the actual revenue collected to the state budget in 2019.

The General Department of Taxation assigned the target of debt reduction to be achieved in the last 3 months of 2019 and the total amount of tax debt must be achieved by December 31, 2019 for each tax department of provinces and centrally-run cities.

The General Department of Taxation requests the leaders of units to assign tasks to their attached units for each leading officer and each official responsible for recovering outstanding tax debts of each enterprise to recover the outstanding tax debts into the state budget and prevent new debts from arising.

Tax departments must monitor and supervise taxpayers' declarations, reviewing and warning taxpayers to make incorrect, insufficient declarations and promptly adjust cases where taxpayers make incorrectdeclarations, not in accordance with the state budget index, avoiding the case has completed revenue estimates without urging the collection in time to close the arising amount, not to increase debt to 90 days in the last months of the year.

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In order to deal with irrevocable tax debts, the Ministry of Finance has been finalizing mechanisms and policies to handle debts, including proposing amending and supplementing regulations on management of tax debt, coercive debt, tax debt write-off, debt freezing, and tax debt settlement in the Tax Administration Law No. 38/2019 / QH14 to suit the actualities arising and according to international practice, effective revenue management amount owed.At the 8th session, the XIV National Assembly, draft resolution on freezing of tax debts, remission of fines for late payment, late payment interest for taxpayers who are not able to pay. The ability to submit State budget will be discussed and considered by the National Assembly.