It is possible to gradually pay tax debt without a bank guarantee

The new regulations will help taxpayers reduce the financial burden, stabilize production and operation. Photo: TL

Currently, according to the provisions of the Law on Tax Administration, the tax authorities are implementing coercive measures for enforcing tax administrative decisions, but the taxpayers that are not capable of paying in full in one go, they shall be allowed to gradually pay tax debts in a certain period of time which is no more than 12 months since the starting date of the enforcement if they meet all requirements of a bank guarantee. According to the General Department of Taxation, this is a solution to facilitate taxpayers to ease the difficulty of gradually paying tax debts together with late payment of 0.03% per day, thus they could have stable conditions and reorganize the business.

However, in the implementation, taxpayers have faced some difficulties. For instance, after tax authorities issue decisions for enforcement taxpayers would receive guarantee by credit institutions. If the prescribed time limit for tax payment shall not exceed 12 months since the starting date of enforcement, taxpayers will be paid gradually less than 12 months (due to receiving guarantees after the enforcement period), while taxpayers still have to pay a guarantee fee of 12 months.

Moreover, in practice, when taxpayers have tax arrears which reach the level of taking enforcement in accordance to regulations, the financial situation of enterprises is very difficult. Thus, commercial banks are unlikely to provide guarantees, even if they pay debts on behalf of taxpayers if the taxpayers fail to properly repay the tax debts to the state budget as committed. Thus, the implementation of guarantee and commitment to pay gradually tax debt in accordance with the current regulations are complicated in administrative procedures and affect the operation of the Bank.

Dealing with the fact, the Ministry of Finance said that it is necessary to amend the provisions on the gradual payment of tax debts of taxpayers to must have a guarantee of credit institutions in the implementation of tax coercive measures in order to facilitate taxpayers to be able to pay debts.

At the proposal for the elaboration of the revised Law on Tax Administration, the Ministry of Finance proposed amending and supplementing Article 92 of the Law on Tax Administration in the direction of supplementing the regulations on the case of coercion and abandonment of the regulations of having a guarantee from credit institutions. According to the Ministry of Finance, the new regulations will help taxpayers reduce the financial burden, stabilize production and operation.