January 19, 2020 20:21

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Tax debt settlement: Enterprises, taxpayers and management agencies all benefit

19:34 | 08/11/2019

VCN – The draft resolution on freezing tax debts, writing off late payment fines and late payment for taxpayers who are incapable of paying is being submitted to the National Assembly at the 8th session of National Assembly term XI

tax debt settlement enterprises taxpayers and management agencies all benefit Difficulties in tax debt management
tax debt settlement enterprises taxpayers and management agencies all benefit Drastically recover tax debt in the last months of the year
tax debt settlement enterprises taxpayers and management agencies all benefit Create a legal mechanism to handle irrecoverable tax debts
tax debt settlement enterprises taxpayers and management agencies all benefit
Chairman of Vietnam Chamber of Commerce and Industry, Vu Tien Loc

Customs Newspaper spoke to Vu Tien Loc (photo), Chairman of Vietnam Chamber of Commerce and Industry about this issue.

According to statistics from the Ministry of Finance, the total amount of irrecoverable tax debt as of December 31, 2018 amounted to VND 41,378 billion. It is worth mentioning that, among the above debts, nearly 760,000 taxpayers have died, gone missing, lost civil act capacity, went bankrupt, dissolved, terminated their business and stopped operations at the registered business address with the tax office. What do you think about this situation?

Due to many reasons from production and business activities, many enterprises are facing force majeure debts. The causes of irrevocable tax debts are both subjective and objective. The context of socio-economic development in recent years has met many difficulties, affecting enterprises and their ability to pay taxes. For a long time, many enterprises have witnessed rapid growth, leading to the risk of prolonged tax debts or irrecoverable debts. This is a common problem not only in our country but also in many countries around the world, especially in the context of economic instability.

These irrecoverable tax debts are misbalancing the budget. To solve this problem, the Government has drafted a Resolution on freezing the debt, writing off late payment fines and late payment for taxpayers who are incapable of paying, which is being submitted to the National Assembly at this meeting. Do you think that a Resolution is necessary?

Regarding the actual socio-economic context, I think that the settlement of irrecoverable tax debts should have been proposed a long time ago. Irrecoverable tax debts now exist only on the books, making it difficult for the tax agency in recovery. Every day, the tax agency has to spend time and manpower to monitor the debts, while the late payment fine of 0.03 percent per day is still calculated. Every day this burden increases on the taxpayers and the state agencies.

The Ministry of Finance's proposal to deal with irrevocable tax debts sounds like it would reduce the budget, but it is not entirely so. Because many enterprises went bankrupt due to natural disasters, floods or had business licenses revoked, although the debt is not written off, the ability to recover these debts is almost zero. Moreover, the writing-off of late tax payment for these enterprises is also a way to help them quickly recover and develop production and business, thereby making them able to pay tax debt and creating a premise to increase state revenues in the future.

It can be seen that the debts which are proposed for settlement by the Ministry of Finance are in accordance with the provisions of the new Tax Administration Law and a number of related documents. Moreover, before proposing to the National Assembly, the Ministry of Finance had made very specific analysis, assessing the causes as well as the ability to recover these debts. Therefore, it can be affirmed that a Resolution on freezing tax debts, writing off fines for late payment and late payment of taxpayers who cannot afford to pay is extremely necessary. If approved at this National Assembly session, the Resolution will be a good start to begin a new phase, benefiting enterprises, taxpayers and tax agencies.

The draft Resolution clearly defines seven subjects in the case of tax debt freezing and writing off. In your opinion, is this regulation correct and sufficient?

The important issue for discussion is that the proposed subjects must be appropriate, if not, it may be a chance for subjects to take advantage of the regulation to delay tax debt payment. Subjects that had tax debts proposed to be frozen and written off will certainly be considered carefully, including objective or subjective reasons, to avoid abuse.

In fact, tax debtors are various, so it is necessary to have a specific classification and evaluation. The seven specific subjects proposed in the draft accurately reflect the necessary cases.

When dealing with these tax debts, the goal of fairness and transparency is very important. So according to you, are the provisions on conditions of freezing and writing off debts in the draft Resolution appropriate?

Stemming from the fact that tax debt write-offs must ensure transparency, fairness, honesty, avoiding abuse and "benefit sharing" between taxpayers and tax managers, the draft clearly stipulates conditions for debt freezing or writing off such as: death certificates or death notices, court decisions declaring a person as dead or missing; certification by a competent authority on no longer production and business activities; or certification by a competent agency on natural disasters or fires.

In particular, I appreciate the provision on responsibility of taxpayers subject to writing off of tax debts, late payment fines in case of being discovered as ineligible or returning to production and business, they still have to pay the debs which were written off.

tax debt settlement enterprises taxpayers and management agencies all benefit Ease the burden of "Irrecoverable debts"

VCN- The overlap of tax debt and fines is the reality of irrecoverable debts of the tax ...

Moreover, in order to ensure strict handling of tax debts, the draft Resolution clearly stipulates responsibilities not only of the tax sector but also of many other agencies such as Committees of the National Assembly and Vietnam Fatherland Front’s Committee, Government, Ministry of Finance, People's Committees at all levels, Chairmen of provincial People's Committees, Tax authorities, business registration agencies, police agencies where taxpayers have their business offices and courts handling applications for opening bankruptcy procedures.

Thank you Sir!

By Thuy Linh/ Huyen Trang