Hanoi Tax Department is handling strongly with the unit of tax debt

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The Hanoi Tax Department has implemented measures to urge debt recovery. Photo: T.Linh

Listing names of debtors

In recent years, the Hanoi Tax Department has implemented measures to urge debt; reviewing and standardising debt data regularly; analysing, evaluating and assessing according to each debt group and debt business to take appropriate measures. Therefore, the debt in Hanoi has decreased over the years. Debt of less than 90 days in four years (from 2015 to 2018) has decreased by VND 9,411 billion (equivalent to 43.4 percent).

In addition to the majority of enterprises that comply with the tax obligations to the State, there is a group of enterprises that owe very difficult debts (including tax debt, land use fee debt, land rent debt). According to the Hanoi Tax Department, these businesses have not too difficult situation of business and production, even some businesses still have growth, earn money by selling goods and have good cash flow but still try to shirk tax obligations. Tax authorities have applied measures to enforce accounts and invoices in accordance with the Law on Tax Administration; working with businesses to resolve difficulties but businesses still avoid obligations to the State budget. Businesses who owe taxes not only affect Hanoi's revenue but are also not fair to other businesses.

Among the long-term "debtors" of the Hanoi Tax Department is Lilama Hanoi Joint Stock Company. According to the Hanoi Tax Department, this enterprise implemented an office, commercial centre and housing project at 52 Linh Nam decades ago. Up to now, a total of 270 apartments and 17 low-rise apartments of the project have been sold, the revenue has reached 95 percent, the houses have been handed over to customers, the real estate inventory is zero but the business still owes the budget VND one hundred and ninety-three billion (including land use fees, taxes, charges and late payment interest).

The Hanoi Tax Department’s statistics show that from 2008 until now, this enterprise has only paid 202 million tax while in 2017 they regularly paid salaries to one hundred and eleven employees with total taxable income paid to individuals nearly VND six billion. In 2018, the total taxable income is more than VND 3.5 billion. The company has receivable money of nearly 113 billion dong from customers now. Although the Tax Department and the Steering Committee to urge the recovery of outstanding debts of the city has repeatedly invited businesses to work to urge, but this unit does not pay.

Another name is Hoang Ha Works Construction Limited Company. With a housing project for police officers and soldiers in Hoang Mai District, this enterprise has debt of approximately VND 157 billion. In particular, the principal of land use levies is 53 billion dong, the amount of late payment is more than 97 billion dong (because the enterprise has been in tax debt for more than 10 years, it will be charged the interest on late payment). Apart from the above debt, the unit also owes tax and fees of about 6.5 billion dong. The tax debt lasted while 398 apartments of the project were sold and handed over to customers to put into use. Proceeds from four installments are 90 percent. Currently, this enterprise is also implementing BT project to invest in building a 2.5-belt road from Hong pond to 1A National Highway. For this enterprise, the tax agency has applied many measures to urge paymemnt like forcing to deduct money from accounts, forcing unused invoices and publishing tax debts on the Tax Department website...but there are no satisfactory results.

Enforcing resolutely debt as prescribed

Hanoi Tax Department is still taking measures to urge and coerce tax debts according to the process and regulations. For cases of ineffective invoices enforcing, failing to ensure the recovery of debts into the State budget, the Hanoi Tax Department is conducting a review to perform information verification steps and apply measures subsequent enforcement (property distrait, collection of money from third parties and revocation of business licenses).

For cases where the management and evaluation process shows signs of slowing (there is cash flow but do not pay tax into the State budget), the Tax Department has turned into an irregular and full inspection regime to have a basis for evaluating, reporting and proposing the City People's Committee and the General Department of Taxation, the Ministry of Finance to have more drastic and stronger measures such as project revocation or coercion.

The Hanoi Tax Department also directed its tax departments to urge remaining new debt from October 2019. For cases of large outstanding debt that have not been enforced/adjusted, it is required to complete the urge for payment/enforcement (for the right debt case), to compile dossier for adjustment/classification (in case of wrong and virtual debt). The Tax Commission also requires this to be completed by December 6, 2019. Then we will continue to review cases of thresholds below VND 300 million to comply with regulations. At the same time, it is necessary to review all cases of enforcement of invoice inefficiencies to transfer the next coercive measure to proceed to revoke the business registration license.