Separate handling measures will be applied for each subject of a tax debt via classification

Tax sector is implementing flexibly many solutions to manage debt. Photo: General Department of Taxation

Land tax debt increased

According to the latest report of the General Department of Taxation, the total amount of tax debts managed by the tax sector as of September 30, 2022, is estimated at VND133,973 billion. This figure has declined by 0.1% compared to August 31, 2022, and increased by 14.4% compared to the same period in 2021, an increase of 16.5% compared to December 31, 2021. Excluding the amount of tax arrears being processed and tax arrears being complained about, the total amount of tax debt as of September 30, 2022, is VND 115,919 billion.

According to the General Department of Taxation, the total amount of tax debt as of September 30, 2022, is increased compared to December 31, 2021, because of an increase of VND 4,789 billion in tax and fee debts (13.1%). This reason is that due to the impact of the Covid-19 pandemic, taxpayers have faced difficulties in production and business, resulting in not making timely payments of tax debts to the state budget.

In addition, some taxpayers in some industries that have been granted a tax payment extension have not yet submitted a request for a tax payment extension under Decree 34/2022/ND-CP, so the tax debt increases. Additionally, fines and late payment interest increased by VND 3,373 billion (17.3%) due to late payment interest, calculated at 0.03%/day of the total tax debt.

In fact, according to the General Department of Taxation, the total increase in tax debt is mainly due to land-related debts, which increased by VND10,241 billion (64.1%), concentrated in a few localities with specific projects such as HCM City Tax Department arise land use levy of SHEEN MEGA MEGA Joint Stock Company (owing tax debt of VND3,796 billion) and DREAM REPUBLIC Joint Stock Company (owing tax debt of VND3,704 billion) because these two cases won the land auction in Thu Thiem New Urban Area. However, those companies have not yet paid, and no decision has been made to cancel the auction results. Or at Hoa Binh Tax Department, this unit has arisen a debt of land use fees from Hoa Binh Urban Petroleum Joint Stock Company (owing tax debt of VND 1,019.5 billion); Quang Binh Tax Department also raised a one-time payment of land rent from FLC Group Joint Stock Company (owing tax debt of VND470 billion); Da Nang Tax Department is arising land use levy from Landcom Investment Joint Stock Company (owing tax debt of VND 529 billion).

According to Hanoi Tax Department, based on Plan 235/KH-UBND, the People's Committee of Hanoi City assigned the inter-branch to review, urge and handle debt for 40 projects in the city that are deployed slowly. Through the process of urging by the Hanoi Tax Department, up to now, 23 projects have been collected and paid into the state budget, while 29 projects are still being urged and handling obstacles of investors. Currently, Hanoi City has reviewed and assessed the implementation of slow projects in the area, ultimately resolved the remaining problems, and resolutely recovered and strictly handled cases of violations.

For businesses that are intentionally delayed and do not fulfill their obligations to the state budget as prescribed, the city's inter-branch will resolutely implement measures to ensure the recovery and handling of outstanding debts. Specifically, the city will not approve investors who still owe tax to invest in new projects or carry out administrative procedures on land following Resolution No. 04/NQ-HDND.

Reviewing and classifying debts

Debt management is always a problematic issue for the tax sector because they have to ensure revenue for the state budget while still having to solve difficulties for businesses and taxpayers to nurture sources of revenue in the long term. Therefore, the most critical task at this time is following up, reporting the tax debt situation and collecting tax arrears; carefully reviewing and analyzing the debt nature; advising the General Department of Taxation on appropriate solutions to urge and collect tax debts following the Law on Tax Administration and documents guiding the implementation and reduction of the debt. If the enterprise intentionally delays paying tax debt or shows signs of violating the law, the tax sector will resolutely implement measures to enforce debt collection and coordinate with the police in handling it as prescribed.

In the past, the tax sector has also stepped up the handling, settlement and appraisal of dossiers of debt cancellation for late payment fines per the provisions of the Law on Tax Administration. According to the report of the General Department of Taxation, in the first nine months of 2022, tax authorities at all levels have handled tax debt relief and cancellation of late payment fines and interest for insolvent taxpayers following Resolution No. 94/2019/QH14, which is estimated at VND 2,405 billion. Thus, the debt settlement results from Resolution No. 94/2019/QH14 to the end of September 2022 are estimated at VND 34,806 billion. In particular, tax debt relief is VND 28,164 billion; debt cancellation of late payment interest is VND 6,642 billion.

Along with the drastic implementation of the above solutions, the tax sector will also focus on the timely handling of exemption from late payment interest arising in 2020 and 2021 for businesses and organizations that incur losses in 2020 following the regulations to support taxpayers in production and business, and nurture revenue sources for the state budget—at the same time, focusing on the timely settlement of the extension of tax payment and land rent in 2022 following the Decree No. 34/2022/ND-CP.

In particular, in the future, the tax sector will upgrade information technology applications to meet the changes in debt management and tax debt enforcement following the Law on Tax Administration.