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Officers of Cat Lai Seaport Customs Branch inspect imports. Photo: Thu Hoa

Facing difficulties in collecting outstanding debts

In 2021, the General Department of Vietnam Customs (GDVC) assigned the target of VND1,041 billion in outstanding debt collection to HCM City Customs Department.

This is the total debt at the department as of December 31, 2020. Of which, over VND679 billion is the debt of an auto company. Due to the Covid-19 pandemic, HCM City Customs Department has proposed to the GDVC to extend the deadline of collecting this debt. Currently, the department has established a working team to reassess the taxable value.

In addition, VND53.22 billion is debts that are classified from the normal debt group to the bad debt group in January 2021. As of December 31, 2020, the department had to collect over VND308.75 billion. As of September 30, the municipal only collected VND57 billion.

While collecting the outstanding debts, some problems arose. The Law on Tax Administration 2019 provides seven coercive measures, but only two measures are applied in reality, including stopping customs procedures and closing tax codes. Other measures are not implemented or applied ineffectively.

For bad debts subject to debt cancelation under Circular 179/2013/TT-BTC dated December 2, 2013, the department has handled tax debts of three companies with a total debt amount of VND17.3 billion. This is an irrecoverable debt, and there have been decisions to establish the dissolution boards but the decisions on official dissolution have not yet been issued. The local Government has not yet approved the dissolution for these companies. Therefore, they have not yet canceled debts.

Difficult to check information of over 100 tax debtors

According to HCM City Customs Department, there are some outstanding tax debts of enterprises that have stopped operation or left registered business addresses or have business codes issued by the customs.

More than 107 enterprises have debts worth over VND148 billion from 1990 to 2003. Some companies have large tax debts such as Hung Vuong Food Processing and Export Company at nearly VND22 billion since 1994, Saigon Frozen Company at nearly VND13 billion since 1994, and an import-export company at more than VND3.9 billion.

The tax authority has faced difficulties in identifying tax code and determining information of enterprises such as Dalat Resort Incorporation with a debt of over VND2.8 billion, Sunnex Fashion Eyeglasses Factory of over VND28.5 billion since 1995; Napoleon Wine Production Company of nearly VND4 billion since 1993.

The tax codes of these companies have not been issued by the tax agency. Therefore, the tax agency cannot search for information of these tax debtors on the database to apply measures to collect tax debts.

The municipal customs department has used the companies’ names on the accounting system to verify information at banks and competent agencies where they registered permanent addresses. However, the department cannot check the tax codes issued by the Tax agency of these companies to gather information for enforcement and collection of tax debts.

In addition, the Tax office and the Department of Planning and Investment of HCM City said that they could not find the company name and business code issued by Customs on their systems, so they could not enforce these companies at the request of the Customs.

Regarding some companies that have decisions to establish a dissolution board, stop operation or dissolve before the deadline, the department has requested the governing agencies such as the Ministry of Planning and Investment, the People's Committee of HCM City, the Management Board of Export Processing Zones and Industrial Parks in HCM City to provide the decision on dissolution and revocation of the license. However, these agencies said that they did not keep records of the enterprises. Therefore, these tax debt dossiers are eligible for tax debt cancellation under the Tax Administration Law.

The municipal customs department has reported the GDVC and proposed solutions to handle these problems.