Proposing the Tax Authority be flexible in applying tax debt enforcement measures simultaneously

VCN - In the draft revised Law on Tax Administration, the Ministry of Finance proposed amending regulations on measures to enforce administrative decisions on tax administration to remove obstacles in policy mechanism and improve the effectiveness of tax administration.
Enforcement easures imposed on 11 tax-delinquent companies Enforcement easures imposed on 11 tax-delinquent companies
Many high-tax debtors pay taxes after enforcement Many high-tax debtors pay taxes after enforcement
Four business directors face exit bans over persistent tax debts Four business directors face exit bans over persistent tax debts
Amending and supplementing tax debt enforcement measures to ensure flexibility and suitability to reality. Photo: collection
Amending and supplementing tax debt enforcement measures to ensure flexibility and suitability to reality. Photo: collection

Difficulty in implementing debt enforcement procedures

Information on tax debt management from the General Department of Taxation shows that tax debt collection in October 2024 reached VND 2,051 billion. Accumulated in the first 10 months of 2024, the collection was VND 58,143 billion, an increase of 33% over the same period in 2023.

To achieve the above results, the entire Tax sector has resolutely implemented solutions to recover tax debts, in which, Tax authorities at all levels have resolutely enforced tax debt for cases of procrastination, signs of asset dispersion, and absconding.

However, in reality, the amount of tax debt is still increasing. The reason is that according to the provisions of Article 125 of the Law on Tax Administration, measures to enforce tax debt must be implemented in order, including: withdrawing money from the account of the person being subject to tax debt enforcement at the treasury, bank or other credit institutions, blocking the account, stopping customs procedures for imported and exported goods, stopping the use of invoices; seizing and auctioning seized assets; collecting money and other assets of the person subject to tax debt enforcement held by the agency/organization/individual...

According to the Ministry of Finance, among the procedural enforcement measures, the measures of forcibly, seizing assets and collecting debts through a third party are not very effective and are very difficult to implement.

Specifically, the asset seizing measure usually only stops at the step of verifying information, while the collecting measure from a third party is only implemented in some cases because the third party has a debt due to the taxpayer. When the tax authority verifies the information, the taxpayer and related units do not provide information or provide information that there is no asset. In cases where there is information about assets, most of the taxpayer's assets are mortgaged at credit institutions. Thus, it is very difficult to determine the value of the assets and it is also very difficult to determine the ownership of the taxpayer's assets for enforcement.

In addition, due to the lack of valuation function, the Tax Authority can only determine the value of assets if the seized assets are cash (VND, foreign currency…), precious metals… Meanwhile, for assets such as factories, means of transport, machinery, equipment, raw materials, and goods, the Tax Authority cannot estimate the value, so it cannot determine whether the value of the seized assets is equivalent to the amount of tax debt of the taxpayer and the enforcement costs. Not to mention, the Tax Authority also needs to have warehouses and human resources to store and preserve the seized assets before auctioning them, handling loss, damage. Therefore, implementing this measure is very complicated and takes a lot of time, effort, and cost. In addition, current regulations do not have a principle for taxpayers who have acts of dispersing assets or absconding, they can choose to immediately apply appropriate enforcement measures among 7 enforcement measures to promptly collect tax debts for the State budget.

Need to be flexible and practical

Regarding this issue, Mr. Nguyen Van Duoc, Member of the Executive Committee of the Vietnam Tax Consulting Association, General Director of Trong Tin Accounting and Tax Consulting Company Limited, said that the key point making tax debt management not highly effective that comes from the policy mechanism on tax debt enforcement measures are still cumbersome, complicated, inflexible and not really suitable.

For example, the application of compulsory measures of asset seizure and third-party collection is very difficult to implement and ineffective because in order to have a basis for implementing this measure, it is necessary to verify not only the taxpayer's information but also information about assets, creditors, and debts. Not to mention, many taxpayers' assets are secured, pledged, mortgaged, or guaranteed at credit institutions or third parties, while according to the provisions of the 2015 Civil Code on the order of payment priority, the priority belongs to the secured party, meaning that tax obligations are not given priority in payment in this case....

Therefore, this expert believes that it is necessary to consider amending and supplementing tax debt enforcement measures to ensure flexibility and suitability to reality, thereby bringing efficiency and effectiveness to tax debt collection management.

According to the Ministry of Finance, stemming from these difficulties and problems, many opinions suggest that it is necessary to stipulate more clearly that the Tax authority must have full information and conditions before implementing measures to seize assets and collect from third parties to avoid wasting time, resources and enforcement costs, contributing to improving the effectiveness of tax debt enforcement work.

Accordingly, in the draft revised Law on Tax Administration, the Ministry of Finance proposes to amend and supplement Clause 3, Article 125 in the direction that the Tax authority is flexible in applying enforcement measures simultaneously. In cases where there is sufficient information and conditions, the enforcement measures of asset seizure and collection for third party shall be applied. In cases where the tax debtor has acts of dispersing assets or absconding, appropriate enforcement measures shall be immediately applied to ensure timely collection of tax debts to the State budget.

Clause 9, Article 6 of the draft Law on Tax Administration amends and supplements Points b, c and d to Clause 3, Article 125 of the current Law in the direction: “For the enforcement measures prescribed in Points d, đ, e and g, Clause 1 of this Article, in case the previous enforcement measure cannot be applied, the tax authority shall apply the following enforcement measure; the enforcement measures prescribed in Points đ and e, Clause 1 of this Article (seizure of assets, collection from a third party) shall be applied when the tax authority has sufficient information and conditions to carry out enforcement.

In case the enforcement decision has not expired but the tax authority has sufficient information and conditions to apply other enforcement measures prescribed in Clause 1 of this Article, it may simultaneously apply those enforcement measures. In case a taxpayer having tax debt has an act of dispersing assets or absconding, the competent authority shall decide to apply appropriate enforcement measures to the administrative decision on tax management to ensure timely collection of tax debt to the State budget.

By Thu Hien/ Binh Minh

Related News

Tax authorities crack down on invoice fraud to legalize smuggled goods

Tax authorities crack down on invoice fraud to legalize smuggled goods

VCN - As part of efforts to combat smuggling and trade fraud during the Lunar New Year season, the Steering Committee 389 of the Ministry of Finance has instructed the General Department of Taxation to intensify enforcement against illegal practices involving fraudulent invoices and tax evasion.
Regularly check tax obligations to avoid temporary exit suspension

Regularly check tax obligations to avoid temporary exit suspension

VCN - In order to avoid the situation of arriving at the airport or border gate and only finding out that you owe taxes and being temporarily suspended from leaving the country by the Tax Authority, the Tax Authority recommends that taxpayers regularly look up their tax obligations to have a plan to pay taxes on time, not letting the tax debt situation drag on and drag on.
Preventing e-invoice fraud amid e-commerce boom

Preventing e-invoice fraud amid e-commerce boom

VCN - The situation of illegal invoice trading is extremely complicated, especially in the context of e-commerce growing. This not only negatively affects legitimate businesses but also causes many other losses to the economy.
Enforcement easures imposed on 11 tax-delinquent companies

Enforcement easures imposed on 11 tax-delinquent companies

VCN - The Ha Nam Ninh Customs Department has recently enforced a suspension of customs procedures on import-export goods for 11 companies with outstanding tax debts.

Latest News

Actively listening to the voice of the business community

Actively listening to the voice of the business community

VCN - Recognizing the Customs-business relationship as a long-term partnership, the Customs authority has organized hundreds of dialogues with businesses since the beginning of the year. These efforts aim to promptly address challenges, resolve obstacles, and facilitate import-export activities. Such meetings offer an opportunity for the Customs authority and the business community to exchange, share insights, and find solutions to enhance operational quality and efficiency.
Step up negotiations on customs commitments within the FTA framework

Step up negotiations on customs commitments within the FTA framework

VCN - Promoting negotiations on customs commitments within the framework of free trade agreements (FTAs) plays an important role in facilitating import and export activities. These commitments not only help optimize the customs clearance process but also minimize costs and risks for businesses, opening up great opportunities for Vietnamese goods to access deeper into the international market.
Proposal to amend regulations on goods circulation

Proposal to amend regulations on goods circulation

VCN - To perfect the policy on customs procedures, inspection and supervision, enterprises and associations have contributed many ideas from practical activities. Thereby, the Drafting Committee (General Department of Customs) has more perspectives to build policies to meet the goal of facilitating trade and ensuring state management of customs.
Review of VAT exemptions for imported machinery and equipment

Review of VAT exemptions for imported machinery and equipment

VCN - The General Department of Vietnam Customs has directed provincial and municipal customs departments to review, inspect, and address issues related to the implementation of VAT exemption policies for specialized machinery and equipment used in agricultural production.

More News

Customs tightens oversight on e-commerce imports

Customs tightens oversight on e-commerce imports

VCN - The General Department of Vietnam Customs has issued new directives to enhance the management of imported goods transacted through e-commerce platforms, addressing ambiguities and ensuring consistent enforcement across provincial and municipal customs departments.
Bringing practical experience into customs management policy

Bringing practical experience into customs management policy

VCN - At the workshop to collect opinions from Southern Customs units on the draft Decree amending and supplementing Decree 08/2015/ND-CP dated January 21, 2015 of the Government; the draft Circular amending and supplementing Circular 38/2015/TT-BTC dated March 25, 2015 and Circular 39/2018/TT-BTC dated April 20, 2018 of the Minister of Finance, organized by the General Department of Customs last weekend, many Southern Customs units contributed specific contents from practical operations in the locality.
Businesses anticipate new policies on customs procedures and supervision

Businesses anticipate new policies on customs procedures and supervision

VCN - With this year’s import-export turnover estimated at nearly US$800 billion and forecasting to surpass this milestone next year, the business community holds high expectations for upcoming amendments and supplements to customs management, procedures, and supervision policies. These changes are expected not only to facilitate trade but also to enhance state management efficiency and support economic development.
Do exported foods need iodine supplementation?

Do exported foods need iodine supplementation?

VCN - Currently, Vietnamese processed food products, including seafood products, have been exported to more than 160 countries, and no country has yet required that "salt used in food processing must be salt with added iodine".
Amendments to the Value-Added Tax Law passed: Fertilizers to be taxed at 5%

Amendments to the Value-Added Tax Law passed: Fertilizers to be taxed at 5%

VCN - With the majority of National Assembly deputies voting in favor, the National Assembly officially approved the revised Value-Added Tax (VAT) Law during its afternoon session on November 26, 2024, as part of the 8th session's agenda.
Proposal to change the application time of new regulations on construction materials import

Proposal to change the application time of new regulations on construction materials import

VCN - To comply with the circular on quality management of construction materials, many businesses importing this item are complaining about difficulties and asking for an extension of the implementation time.
Ministry of Finance proposed to reduce VAT by 2% in the first 6 months of 2025

Ministry of Finance proposed to reduce VAT by 2% in the first 6 months of 2025

VCN - In order to promote the early recovery and development of production and business activities, contributing back to the State budget, the Ministry of Finance proposed to continue reducing 2% of VAT on groups of goods and services currently subject to a tax rate of 10% in the first 6 months of 2025.
Hanoi Customs resolves tax policy queries for enterprises

Hanoi Customs resolves tax policy queries for enterprises

VCN - Queries regarding customs consultation procedures and tax refunds due to price reduction clauses were addressed by the Hanoi Customs Department, providing clarity for businesses.
Implementing the SAFE framework in Vietnam: Assessment through the lens of international standards

Implementing the SAFE framework in Vietnam: Assessment through the lens of international standards

VCN - In June 2005, the World Customs Organization (WCO) developed and adopted the SAFE Framework of Standards to Secure and Facilitate Global Trade. The SAFE Framework plays a crucial role in encouraging countries to modernize, enhance security, and facilitate trade within global supply chain management and Authorized Economic Operator (AEO) programs. This approach introduces a comprehensive method for cross-border goods management and promotes closer cooperation between Customs, businesses, and stakeholders. The Customs News presents a two-part series on implementing the SAFE Framework in Vietnam.
Read More

Your care

Latest Most read
Actively listening to the voice of the business community

Actively listening to the voice of the business community

Recognizing the Customs-business relationship as a long-term partnership, the Customs authority has organized hundreds of dialogues with businesses since the beginning of the year
Step up negotiations on customs commitments within the FTA framework

Step up negotiations on customs commitments within the FTA framework

VCN - In addition to promoting negotiations on customs commitments within the framework of FTAs ​​under negotiation, the General Department of Customs actively supports businesses to effectively utilize commitments in signed FTAs, especially CPTPP, EVFTA,
Proposal to amend regulations on goods circulation

Proposal to amend regulations on goods circulation

VCN - The Vietnam Association of Maritime Agents, Brokers and Services has proposes to amend and supplement regulations related to the transport of goods subject to customs supervision.
Review of VAT exemptions for imported machinery and equipment

Review of VAT exemptions for imported machinery and equipment

The General Department of Vietnam Customs has directed provincial and municipal customs departments to review, inspect, and address issues related to the implementation of VAT exemption policies for specialized machinery and equipment used in agricultural
Customs tightens oversight on e-commerce imports

Customs tightens oversight on e-commerce imports

The General Department of Vietnam Customs has issued new directives to enhance the management of imported goods transacted through e-commerce platforms
Mobile Version