Classifying tax debts to develop appropriate solutions for each

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The Tax sector has offered flexible solutions to manage tax debts. Photo: General Department of Taxation

Land tax debts increase

According to the latest report from the General Department of Taxation, the total tax debt as of September 30, 2022 is VND133,973 billion, reducing 0.1% compared to August 31, 2022, and increasing 14.4% year-on-year, up 16.5% compared to December 31, 2021.

If excluding the tax debts under processing or complaint, the total tax debt as of September 30, 2022 is VND115,919 billion.

According to the General Department of Taxation, the total tax debt as of September 30, 2022 higher than it of December 31, 2021 is due to an increase of VND4,789 billion in tax and fee debts (13.1%).

This is due to the impact of the Covid-19 pandemic, taxpayers faced difficulties in production and business, resulting in delayed payment of tax debts to the state budget. In addition, a number of taxpayers in industries that have been granted a tax payment extension have not yet submitted an application for tax payment extension under Decree 34/2022/ND-CP. Furthermore, fines and late payment interest rose by VND 3,373 billion (17.3%).

According to the General Department of Taxation, in fact, the total increase in tax debt is mainly due to land-related debts, which rose 64.1% or VND10,241 billion, mainly in a few cities and provinces such as: at the Ho Chi Minh City Tax Department: SHEEN MEGA MEGA JSC owes VND3,796 billion and DREAM REPUBLIC JSC owes VND3,704 billion, these two companies won the auction for the land area in Thu Thiem New Urban Area but have not made the payment and have not decided to cancel the auction results. Or at the Hoa Binh province Tax Department, Hoa Binh Urban Petroleum JSC owes VND1,019.5 billion of land use fees; at Quang Binh province Tax Department, FLC Group JSC owes VND470 billion of one-time payment land rental; or at the Tax Department of Da Nang City, Landcom Investment JSC owes VND529 billion of land use fee.

Hanoi Tax Department said that according to Plan 235/KH-UBND, the City People's Committee assigned the inter-branch agency to review, urge and handle debt for 40 slow-moving projects in the city. Therefore, 23 projects made the payment to the state budget. For those who deliberately delay and do not fully fulfill their obligations to the state budget as prescribed, the city's inter-branch agency will resolutely implement measures to handle outstanding debts. Specifically, investors who still owe tax will not be approved for investing in new projects or carrying out administrative procedures on land according to Resolution 04/NQ-HDND.

Reviewing and classifying debts

In fact, debt management is always a problem for the tax sector because the tax has to ensure revenue for the state budget while solving difficulties for businesses and taxpayers to nurture long-term revenue sources. Therefore, the most important task at this time for the tax sector is following up and reporting the tax debt situation, tax debt collection; carefully reviewing and analyzing the debt nature and advising the General Department of Taxation on appropriate solutions to urge, coerce and collect tax debts according to the Law on Tax Administration and guiding documents to reduce debts.

If the tax debtor intentionally delays the payment and shows signs of violating the law, the tax sector will resolutely implement measures to enforce debt collection, and coordinate with the police for settlement.

The tax sector has also stepped up the settlement and appraisal of applications for debt cancellation for late payment fines and late payment interest in accordance with 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 frozen tax debt, written off late payment fines, late payment interests that are no longer able to be paid to the state budget according to Resolution 94/2019/QH14 of VND2,405 billion.

Thus, from the effective date of Resolution 94/2019/QH14 (July 1, 2020) to the end of September 2022, about VND34,806 billion of tax debts were handled, of which frozen tax debt amount was VND28,164 billion; debt cancellation of late payment fines and late payment interest was VND6,642 billion.

Moreover, the tax sector will also focus on implementing exemption for late payment interest arising in 2020 and 2021 for loss-making enterprises and organizations in 2020 to support taxpayers and nurture revenue sources for the state budget. Besides, the tax sector will focus on the timely settlement of the extension of tax payment and land rent in 2022 according to Decree 34/2022/ND-CP.

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