Customs sector effectively controls tax debts

Ha Nam Customs officials instructed enterprises to implement customs procedures. Photo: H.Nụ

Urgently recover tax debt

According to preliminary statistics, as of October 31, the total tax debt of the entire Customs sector was VND 5,666.56 billion. Compared to December 31, 2019 (total debt was VND 5,577.87 billion), the amount of debt as of October 31 increased by VND 88.69 billion (an increase of 1.59%). In the current situation of the pandemic and natural disasters, the tax debt management of the Customs sector is being assessed quite positively. The reason is the amount of tax debt of VND 88.69 billion mainly arose from post-clearance audit, leading to tax imposition, which increases the debt of the whole customs sector. Among the total debt as of October 31, the group of irrecoverable debts accounted for the majority of VND 3,826 billion, 67% of the total debt of the sector.

By the end of October 31, the Customs sector had recovered and processed VND 302.6 billion of tax debts. According to the evaluation of the General Department of Vietnam Customs, in the first 10 months of the year, the task of urging tax debt collection at some provincial Customs departments had achieved good results such as Hai Phong Customs Department recovered VND 147.2 billion, Bac Ninh Customs Department recovered VND 40.9 billion, Khanh Hoa Customs Department recovered VND 76.9 billion. Besides that, there are also units having poor results such as Ca Mau Customs, Dong Thap and Tay Ninh.

Analysing more carefully the cause of the increase in tax debt, a representative of the Import-Export Duty Department said that the amount of irrecoverable tax debt of more than VND 3,800 billion of the Customs sector was transferred from previous years. The reason is that in the past, to facilitate to businesses, the State allowed business to be in debt for import and export tax.

The Law on Tax Management in 2006 allows to be in debt of tax (except for imported consumer goods), such as exported goods subject to be in debt of 30 days; imported goods which are raw materials for export production subject to be in debt of up to 275 days; temporary import and re-export goods or temporary export and re-import goods subject to be in debt of 15 days; other imported goods subject to be in debt of 30 days.

Taking advantage of this loophole, many businesses have been intentionally delaying paying tax debts and even vacated their business addresses. Besides that, many enterprises that are allowed to be in debt after importing and exporting have faced financial difficulties, so they do not have enough resources to fulfill tax obligations. Therefore, the Law on Tax Management in 2012 only allows to be in debt for 275 days for goods that are raw materials imported for export production, but enterprises must meet many very strict conditions, the rest would be cleared and released goods when all taxes and fees related to import and export have been paid by enterprises (except for guaranteed cases). Therefore, tax debt managed by the Customs sector has fallen significantly.

Besides that, the debt decreased in the group of recoverable debts because units were proactive in collecting old debts. At the same time, for new debts arising in 2020, units in the sector have been rapidly implementing recovery solutions.

Striving for less than 2% of total debt

In the last months of 2020, the Covid-19 pandemic will still have complex developments in many countries around the world and floods in central provinces have caused direct impact on production and business activities. Many businesses are damaged, dissolved, go bankrupt or have no financial resources to pay taxes to the budget. Therefore, the revenue collection as well as revenue management and tax debt collection, will face many difficulties.

To "constrain" tax debts to the lowest level and strive for achieving the highest result in State revenue collection and payment, the General Department of Vietnam Customs is directing units to implement many measures to manage and recover tax debts, regularly reports on tax debt collection. The General Department of Customs has been directing provincial customs departments, drastically implementing Decision 924/QD-TCHQ dated March 27, 2020 on assigning targets of tax debt collection to provincial Customs Departments to urge and monitor the situation of tax debt collection and settlement in each month and quarter. In addition, the Customs sector also urged provincial Customs Departments to complete dossiers for the case that are possible to cancel debts in accordance with provisions of Resolution No. 94/2019/QH14 dated November 26, 2019 and Law on Tax Management No. 38/2019/QH14 that was effective from July 1, 2020 to cancel debts to reduce tax debts.

The General Department of Vietnam Customs requested provincial customs departments analyse and closely assess the tax debt situation, clearly identify the cause of the increase or decrease in tax debts at local customs departments; directing review of debts in localities, strictly implementing tax debt collection, fully applying regulations on tax payment deadlines, order of tax debt payment and measures to recover all receivable debts.

At the same time, inspecting and reviewing enterprises with tax debts in the area, working with the People's Committee of the province or city to request guidance for authorities to recover tax debts. Along with that is to strengthen coordination with the police, the procuracy, the management board of the industrial park, the local government and local tax unit to find businesses and business owners in the task of collection of tax arrears.

The General Department of Vietnam Customs requested the units strictly manage newly arising debts and remind when the tax payment is due, if overdue but enterprises have not paid, they must urge to collect immediately without delay and strictly comply with the order of tax payment, apply sequentially coercive measures in accordance with regulations.

To control the total amount of tax arrears to less than 2% of the total revenue collection, the General Department of Vietnam Customs has been urging units to regularly report on tax debt collection; conducting statistic for the list of enterprises intentionally delay to pay tax debts, which are subject to enforcement and request to disclose their identity.

At the same time, coordinating with management authorities to collect information about the deposit accounts, salaries and assets of business owners who no longer operate at the registered business address.

Regarding conditional tax exemption or reduction such as processed goods, goods imported for producing processed goods, goods imported for export production, the General Department of Vietnam Customs requested provincial Customs departments to have strict management measures to avoid arising tax debts that business owners fled from their business addresses or return to their homeland (business owners are foreigners) unable to recover tax debts.