December 12, 2019 06:40

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Tax debt elimination contributes to financial transparency

10:02 | 03/10/2019

VCN - Agreeing with the fact that the deletion of unrecovered tax debts is necessary and the Resolution on handling tax debt for taxpayers who are unable to pay the budget must be promulgated before the 2019 Law onTax Administration takes effect, Mr. Tran Quang Chieu (photo), Standing Member of the Committee of Budget and Finance of the National Assembly,said it should be accompanied with good implementation of propagation and supervision before and after the debt elimination according to the Resolution.

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tax debt elimination contributes to financial transparency
Mr. Tran Quang Chieu, Standing Member of the Committee of Budget and Finance of the National Assembly.

According to the report of the Ministry of Finance, together with the legalization of cases of tax debt elimination in the Tax Administration Law, the Ministry of Finance is drafting a Resolution on handling tax debts for taxpayers who are unable to pay. What is your opinion onthe Resolution?

There have been three additions and amendments of the Tax Administration Law since 2006; however, it does not have regulations on handling tax debts, so the amount of tax debt, penalties for late payment, and delayed payment is constantly increasing over the years.

The Tax Administration Law No. 38/2019/QH14 (2019 Law on Tax Administration) which has just been approved by the National Assembly and will takeeffect from July 1, 2020, has specific provisions on freezing tax debts,eliminating tax debt, fines, and late payments.However, these regulations are applicable to taxpayers arising from July 1, 2020 onwards.Therefore, in order to clear this gap, I think that it is necessary to issue a Resolution on handling tax debts for taxpayers who are unable to pay.

In essence, the elimination of tax debt includes principal debt, tax debt, penalty of late payment.It should be asserted that this is not the removal of real money, but tax obligations, in other words, nominal money, not bad debt of the bank (because the bad debt of the bank is that a bank lends with real money and losesreal money). Tax debt elimination does not cause damage to the state budget. If we can collect it, the state budget will have revenue.

Along with the implementation of handling tax debts according to the Resolution, propaganda for people to understand it is very important. The cases under the Government's proposal are unrecovered. In the Government's report, it was clearly stated that the target of debt elimination was the dead, missing, bankrupt businesses and places of business that cannot be tracked.If this situation persists, it will not reflect the financial situation substantially, because unrecoverable tax debt is mainly the late payment interest in addition to the principal.Therefore, it is necessary to remove the tax debt to ensure the structure of the state budget, contributing to financial transparency.

Has the resolution of tax debt eradication been guaranteed to taxpayers, sir?

In order to ensure transparency, in addition to being publicized in accordance with the new Law on Tax Administration, it is also necessary to clearly state in case the enterprise has a decision to eliminate the tax debt, but it is found to be in business again, the decision will be canceled and the enterprise must pay the tax debt to the state budget. That is an additional issue to avoid policy abuse.

Or in the provisions on the authority to eliminate tax debt, in addition to being held responsible in accordance with the law on duty performance, a higher discipline will be applied in case of a violation. In my opinion, this regulation should be added to the draft Resolution.

The 2019 Law on Tax Administration does not stipulate the establishment of a tax debt elimination advisory council, but specifically for this Resolution, the council should be set up.Because the eliminated amount of money is not small and there are many objects in this component.Therefore, to ensure transparency and publicity, a Consulting Council should be established and it will dissolve itself when the task is completed.

Thank you, sir!

Mr. Cao Anh Tuan, General Director of General Department of Taxation:

"It is very important for tax authorities and taxpayers to remove debt fairly and appropriately.At the same time, existing problems in tax debts of businesses as well as individuals must be dealt with from now to the effective date of the 2019 Law on Tax Administration(July 1, 2020).The draft Resolution of the National Assembly on tax debt settlement for taxpayers who are unable to pay the state budget plays a very important role at this time.The debt elimination for the right subjects, in an effective way, avoiding loss of budget revenue is the goal set by the Ministry of Finance and the tax agency. Accordingly, it is required to strictly regulate subjects including accrued debt and eliminated debt in order to ensure that the debt elimination is performed fairly and in accordance with the law provisions.”

Ms. Nguyen Van Chi, Standing Member of National Assembly’s Committee for Financial and Budgetary Affairs:

“I completely agree with the draft Resolution of the National Assembly on tax debt settlement for taxpayers who are unable to pay the state budget.Instead of proposing the removal of both principal and late payment penalties, in the latest draft, the Ministry of Finance only proposes to freeze debts with 7 groups of subjects and eliminate debts of fines and late payment interest arising before the effective date of the 2019 Law on Tax Administration only.This approach makes perfect sense.The draft Resolution together with the 2019 Law on Tax Administration will form a coherent overall, facilitating the tax industry and taxpayers in handling tax debts.”

Speaking at the meeting of the NA’s Standing Committee on the Draft Resolution on tax debt settlement for taxpayers who are unable to pay the state budget on September 17,National Assembly Vice Chairman Phung Quoc Hien asked the Government to review all the tax-related laws from 2006, 2012, 2014, 2016, and 2019.It is necessary to include items which do not have relevant regulations on the subjects that need to be dealt with in the Resolution, complying with the spirit of Article 152 - transitional provisions of the 2019 Law on Tax Administration, ensuring the coverage for all subjects that are unable to pay the state budget.

The Government needs to clarify the responsibilities of taxpayers, tax administration agencies, officials of ministries, branches and localities related to the situation of tax arrears in recent years to report to the National Assembly.Especially the number of VND41,000 billion which cannot be recovered; and VND11,000 billion that will be cancelled according to the Resolution.

By Bao Minh/ Ha Thanh