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The arduous process of recovering import-export tax debts – Part 2: Tracking tax debtors

08:02 | 10/07/2018

VCN - The story of tracking and collecting tax debts for business owners who deliberately fled and disappeared is an arduous task for the Customs force, because these objects have fled away without traces thereof. Typical cases which are identified by Customs reporters hereinafter are clear evidence.

the arduous process of recovering import export tax debts part 2 tracking tax debtors In 5 months, the revenue collection of Tax sector achieved 41% of current appropriation
the arduous process of recovering import export tax debts part 2 tracking tax debtors Irrecoverable tax debt amount is over VND 32,000 billion
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the arduous process of recovering import export tax debts part 2 tracking tax debtors
The address of house A, No. 109 Quan Thanh Street - Ba Dinh District - Hanoi was head office of Vinashin Import-Export Company, now become head office of a government agency being renovated, Photo: T.Binh.

"Missing" together with a debt of VND 54 billion

Talking to the leader of the Import and Export Division (Hai Phong Customs Department) about tax debts, he shared that,"The most difficult is that many debts are bad debts because many tax debtors fled away and disappeared, the Customs has to take a lot of time and effort for tracking without collecting any information. Especially for enterprises with addresses outside the management area, the travel and verification is arduous but still ineffective.

A typical case mentioned by Hai Phong Customs Department is Vinashin Import-Export Company (tax code 0100113303011). This company is in the debt group “taxpayers fled away and disappearedand no longer operate at the registered address, stop and suspend their business activities”, with a total tax debt of up to VND 54 billion. This is tax debt arising from 2006 to 2009 when the company imported raw materials, supplies and spare parts for shipbuilding in the form of export production.

To verify more information on the above case, we visited the address of Vinashin Import-Export Company at Room No. 3, 6th Floor, Building A, No. 109 Quan Thanh Street - Ba Dinh District - Hanoi (the registered address on Certificate of business registration and information gained by the reporters from the company's tax code). Although on a busy street in the center of the capital, many people around here do not know the existence of Vinashin Import-Export Company at this address.

Some security guards at the Building No. 109 Quan Thanh said that although they had been working there for 4-5 years, they had never seen any information or any staff related to the phrase "Vinashin". "We heard about a subsidiary of Vinashin had an office here, they moved 7-8 years ago. At present, this building is the headoffice of a state agency and is being remodeled,"- said a security guard.

According to guidance of the security guards, we stepped up to the 6th floor of the building to observe. We witnessed a floor littered with furniture and being repaired. Some rooms have been repaired but are empty.

Notably, observing all the area on the 6th floor, we did not see any signs associated with Vinashin Import-Export Company.

By further verifying the information of Vinashin Import-Export Company on the system of the General Department of Taxation, we found that the taxpayer stopped operation but has not fulfilled the procedures for closing tax code. In particular, the latest date of the information change of the enterprise on the data of the tax authority is 7 years ago (from 21/11/2011)

Suspending the exit of the business owners but the tax debt recovery is not successful

The collection and handling of tax debts for Customs agencies is still very difficult, because some tax debtors are foreign enterprises where enterprise owners have fled to their home countries. For example, Greennet Vietnam Co., Ltd., (tax code 2500234031), is currently in the debt group.

The taxpayers fled and disappeared, missing and no longer operate at the registered address at Vinh Phuc Customs Branch under Hanoi Customs Department.

Greennet Vietnam Co., Ltd., was established in 2004, located in Lot 4B, Khai Quang Industrial Zone, Khai Quang Ward, Vinh Phuc, registered business in the field of exporting yarn, fabric and finishing textile products.

Although the total registered capital was up to US$ 4.5 million (according to the reporter's information from the website of Vinh Phuc public administration center), this company only operated for several years and raised late payment of tax. When the customs authority took measures to collect tax debts according to the regulations, the company owner had fled from the registered business address. Currently, the company debt is nearly VND 1.2 billion, arising from 2008.

According to the representative of Vinh Phuc Customs Branch, the Branch took measures to collect tax debts in accordance with the Law on Tax Administration and other relevant legal documents to collect the debts and handle tax debtors. However, this is not a simple task, the Customs has to take a lot of time and effort.

Vinh Phuc Customs Branch coordinated with relevant agencies to seek one of the two investors in this company who are still in Vietnam. According to the representative of Vinh Phuc Customs Branch, during the process of recovering and handling tax debts of Greennet Vietnam Co., Ltd., the Branch has verified and discoveredthatMr. Choi Suk J - one of the two investors in the companyis still in Vietnam. Subsequently, the Branch sent a written request tothe Immigration Department for suspending the exit of Mr. J, but until now, the company has not fulfilled the obligation for tax payment as prescribed.

"Hugging” tax debts and returning to the United States

Taking a thick file kept for nearly 10 yearsabout Hoan Cau Spongy Bag Production Co., Ltd., an officer of Saigon Port Zone 1 Customs Branch under Ho Chi Minh City Customs Department shared that after establishment, only in less than 3 months (from 21st July, 2008 to 17th October, 2008), Hoan Cau company registered 87 import customs declarations at 5 branches under Ho Chi Minh City Customs Department and 3 declarations at Binh Duong Customs Department. The imported goods were plastic resins with 0% import tax rate, 10% VAT, the total VAT of the above 87 declarations was over VND 22,799 billion. Taking advantage of the Government's tax grace period for imported raw materials for export production, Mr. La Hue Kiet and foreign capital contributors did not carry out production and export of goods according to regulations. He fled to his country and carried the tax debt of over VND 23 billion.

According to the business registration address of Hoan Cau Spongy Bag Production Co., Ltd., we visited the address at 395/13 +13A Minh Phung Street, District 11, Ho Chi Minh City - registered business headquarters. When asked about Hoan Cau company, Ms.Tran Thi Lien, the house owner, was surprised and said that this company had been dissolved for ten years. She remembered that in 2007 the company rented her house to be a business registration office, but it operated for 2-3 years and then stopped operation, the company’s assets were confiscated by banks and the director fled to the US at that time.

According to the information from the Ho Chi Minh City Department of Planning and Investment, we learned that Hoan Cau company was granted the business registration certificate on 23rd July, 1997, with business lines including: Producing spongy bags, purchasing plastic covers, import - export service and import–export authorization service. The director and legal representative of the company is Mr. La Hue Kiet, a US citizen; the status of the company is inactive. Information on the Tax Agency’s system also shows that this company had closed its tax code since 2009.

the arduous process of recovering import export tax debts part 2 tracking tax debtors General Department of Taxation "urge" to recover debt

VCN- Ensuring the prompt receipt of the new arising tax arrears and reduce the amount of tax ...

In order to recover the above-mentioned tax debts, Ho Chi Minh City Customs Department immediately sent an official letter to the Public Security Authority to request the coordination in the tracking and recovery of the debts of the company. The case has been criminally prosecuted by HCM City Police Investigation Police, but the director is a foreigner who returned home before the case was prosecuted, so the case has not been settled and tax debts are in bad debts.

By Thu Hoa -Thai Binh - Thu Diu - Ngoc Linh - Thu Trang/ Huyen Trang