HCM City Customs achieves breakthrough in tax debt collection

	GDVC sets target on tax debt collection
	Customs assigns target of recovering and handling overdue tax debt for 24 unit

Officers of Zone 1st Sai Gon Seaport Customs Branch inspect imported goods. Photo: T.H

Collecting over VND 630 billion

Recently, many enterprises have paid taxes to the State budget after being enforced to suspend import and export activities by HCM City Customs Department.

On July 24, after the director of Mai Hao Trading and Production Co., Ltd. (tax code 0303950096; address, Lot B3c Hiep Phuoc Industrial Park, Hiep Phuoc Commune, Nha Be district, HCM City) was suspended from the exit, the company has paid the tax debt to the State budget.

Earlier, dozens of cases delaying tax payments have been enforced to stop customs procedures by the Customs.

According to the leader of the Tax Administration Team of Zone 1st Saigon Port Customs Branch, from the beginning of the year, the branch has issued more than 120 decisions on suspension of exit for the legal representative of the tax debtors. After the enforcement, about 20 businesses paid taxes worth over VND7 billion.

According to the Department, the coercion method of suspending exit for legal representatives of tax debtors has brought positive results. Deputy Head of the Import-Export Duty Department Nguyen Ngoc Anh said that this method is drastically implemented, even for businesses with small amounts of tax debts. In the first 6 months of 2023, the Department has collected over VND 15 billion through suspension of exit.

In 2023, the department has been assigned the outstanding tax debt target of over VND805 billion. Since the early year, the department has provided solutions to effectively recover tax debts, freeze tax debts and cancel debts for late payment interest for taxpayers that are no longer able to pay debts under Resolution 94/2019/QH14 (before it expires on July 1), contributing to the completion of assigned tasks.

On April 28, HCM City Customs Department issued plan No. 1119/KH-HQTPHCM to request the heads of the customs branches to review arising tax debts, and urgently collect recoverable debts. Conduct information verification to ensure that enforcement measures are taken in a timely manner. Check each tax dossier, thereby making detailed plans, reporting and statistics on problems for each debt file. In the first half of the year, the department collected over VND630 billion, meeting about 80% of the target for the whole year.

Proposing many solutions

To effectively handle tax debts, the department has issued and implemented Plan 464/KH-HQTPHCM dated February 27 on strengthening debt freezing and debt cancellation in accordance with Resolution 94/2019 /QH14.

As of June 15, the customs branches have sent the application for debt cancellation to the Import-Export Duty Division for 128 enterprises with a cancelled amount of over VND 33 billion.

As of June 28, the Department advised the People's Committee of HCM City to issue 85 decisions to cancel bad tax debts, with a total amount of more than VND10.8 billion. The Customs Branches issued 41 Decisions on debt freezing under Resolution 94/2019/QH14 with a total amount of over VND27.8 billion, accounting for 1.74% of the total amount of bad debts of the whole department.

HCM City Customs Department proposed the General Department of Vietnam Customs to detail the process of verifying taxpayer information to effectively perform coercive measures; supplement regulations on the classification of tax debts that are sued into the group of pending debts.

The department has reported to the General Department of Vietnam Customs to revise regulations of the Law on Tax Administration. Accordingly, revising Clause 7, Article 124 of the Law on Tax Administration as saying that “Individuals who are the legal representatives of taxpayers must fulfil the tax payment obligations of the enterprises that are enforced to comply with the decisions on tax administration before exiting and may be suspended from exit in accordance with provisions of the Law on exit and entry.

According to HCM City Customs Department, in fact, it was discovered that the legal representative of the taxpayer is an employee (who doesn't have the right to decide on business) or has used personal papers to register as a legal representative without knowing. The department proposed to supplement that “Member of the Board of Directors of a joint-stock company, member of the Members' Council of a limited liability company, owner of a company, owner of a private enterprise, director or general director, partnership member” are subject to suspension of exit as the legal representative, and are responsible for the debts of the enterprise.

For Article 19 of the Law on Tax Administration, the department asks to add more powers of the tax administration agency by saying that the business registration authority is required not to register or change the business registration contents of the enterprise during the tax administration agency is handling the violations of the enterprises on the Tax and Customs laws.

In addition, the Department proposes to amend and supplement Clause 5, Article 39 of the Law on Tax Administration in the following directions: before implementing at the business registration agency, registration of cooperatives, and business registration, the taxpayers must register with the tax administration agency to fulfil the tax payment obligation under the provisions of this Law and other relevant laws. The tax authority is responsible for checking the fulfilment of tax obligations by taxpayers before terminating the validity of the tax identification number. Because in fact, many businesses carry out the procedures for closing tax identification numbers even though they still owe tax at the customs office, it is necessary to specify that taxpayers must fulfil their obligations at tax administration agencies (including tax and customs authorities).