Handling tax debts: prevent policy from being profited

	Principles of handling tax debts meeting requirements and objectives
	Tax debt settlement: Enterprises, taxpayers and management agencies all benefit
	Difficulties in tax debt management

Mr. Doan Xuan Toan, Deputy Director of the Department of Debt Management, General Department of Taxation

Although the Law on Tax Administration No. 38/2019/QH14 has a separate chapter with very clear provisions on tax debt management, the resolution on tax debt has been approved by the National Assembly, showing its importance. What do you think about this issue?

First of all, it must be said that the National Assembly's issuance of the resolution on tax debt comes from objective practices. The resolution focuses on two important solutions: freezing the original tax debt and writing off the fines on late tax payments. Particularly for the amount of original tax debt, the tax administration agency shall continue to monitor and handle it according to the provisions of the Law on Tax Administration No. 38 if possible.

For the tax administration agency, the resolution is an important legal basis to thoroughly handle outstanding debts which have been incapable of being paid to the State budget for many years. This will reduce the burden of management and costs, enabling tax authorities to focus on the management of revenue, to collect potential debts into the State budget, to prevent revenue loss and to increase the revenue for the State budget. From then, it will reflect the true situation of tax debt, production and business of the economy to formulate State budget revenue and expenditure estimates as well as macroeconomic indicators.

As for taxpayers, on the one hand, the deletion of fines for late payments will support and solve difficulties and facilitate the development of production and business activities; stabilise psychology, and restore production and business as a prerequisite for the fulfillment of obligations to the State budget. On the other hand, it will create fairness for taxpayers whom the State budget pays slowly.

Therefore, together with the provisions of the Law on Tax Administration No. 38 and this resolution, the basic mechanism of tax debt handling has been completed, contributing to effectively handling debt recovery, and overcoming shortcomings in recent years.

In addition to identifying the right objects, what regulations does the resolution contain to prevent profiteering and deliberately avoiding tax debt?

It must be understood that the resolution is a legal document, a legal basis for debt settlement, not a tool to write off debt immediately. The cancellation of debts must be based on each object meeting specific conditions on dossiers and procedures. The prerequisite for debt settlement is that the taxpayer is no longer able to pay the State budget. The seven groups of being frozen and written off tax debts in the resolution have been carefully reviewed and considered by many tax authorities. All of these objects are consistent and synchronised with the provisions of the Law on Tax Administration No. 38 and they are not new objects.

Since the write-off of debts under the provisions of the current Law on Tax Administration has been implemented, tax agencies at all levels have not discovered any cases of taking advantage of the policy to stagnate or evade taxes. Because the provisions of the law are very strict, only erase tax debts, fines, late payment interest for bankrupt enterprises after making payments according to the bankruptcy law and they do not have assets to pay taxes and fines; individuals are regarded as dead, missing, or incapable of civil acts by law and have no property to pay outstanding tax and fine. Meanwhile, the provisions of the Law on Tax Administration No. 38 and this resolution are much stricter, so there will be no loophole for profit.

Specifically, the debt write-off competence and debt-handling principles must strictly comply with law provisions, the right objects, right competence and responsibility of the competent person. In case the competent person decides to write off the debt but the person handling the debt does not comply with the regulations, he will be handled, perhaps even criminally.

Moreover, to identify the right objects, apart from the responsibilities of tax administration agencies, there must be close coordination of People's Committees at all levels, departments and branches in certifying information and assets of tax debtors; police offices shall review taxpayers who are dead, missing, leaving their residence places or have lost civil act capacity; and certify taxpayers' information that is no longer operating at the registered business address. In addition, there must be close supervision of relevant agencies such as the annual request, the State Audit performs the audit of debt settlement and reports to the National Assembly. Moreover, after writing off debts, if taxpayers return to production or business or set up new production or business establishments, they still have to fully pay the written off debts. All these provisions will ensure the policy is not taken advantage of, profiteering, and the State budget will not be lost.

Thank you, sir!