Customers transact at the Dong Da District Tax Department ( Hanoi City Tax Department). Photo: Do Tam
Causes of increased tax debt
In 2023, the Tax sector will recover VND 41,557 billion in tax arrears; of which, collection by debt management measures is VND 37,605 billion, collection by enforcement measures is VND 3,952 billion. The total tax arrears as of December 31, 2023 is VND 163,591 billion, an increase of 2.6% compared to November 30, 2023, an increase of 10.7% compared to December 31, 2022. Excluding the tax arrears being processed and the tax arrears being complained about, the total tax arrears as of December 31, 2023 is VND 140,091 billion, an increase of 2.1% compared to November 30, 2023, an increase of 10.6% compared to December 31, 2022.
According to the General Department of Taxation, tax arrears have increased partly due to the consequences of the Covid-19 pandemic, which has negatively impacted the economy , people and businesses. Many businesses have withdrawn from the market, increasing the amount of tax arrears that are difficult to collect. Meanwhile, the assets of businesses have all been mortgaged at banks, making it difficult to implement measures to enforce tax debt collection.
In addition, the general difficulties of the capital market negatively affect the operations of real estate businesses, leading to increased debt from land revenues. In addition, many taxes were extended according to the Government 's regulations in 2023, but individuals and organizations have not yet paid them to the state budget on time.
In fact, in 2023, along with nurturing and managing revenue sources, tax authorities at all levels have removed difficulties and obstacles, supported taxpayers to restore production and business; promptly resolved cases of tax payment extensions, tax debt payments in multiple installments... The General Department of Taxation has also urged debt collection; reviewed, classified debts, clearly identified the causes of each debt to apply appropriate debt collection measures.
For businesses facing difficulties, the tax authority has measures to support them, but for businesses that are slow to pay, the tax authority applies debt collection measures. In addition, the local tax department publicly announces businesses with tax debts in the area; in some cases, the tax authority sends a notice to the Immigration Department (Ministry of Public Security) requesting a temporary suspension of exit for the legal representative.
Economist Nguyen Minh Phong said that classifying tax debts to find appropriate recovery solutions is necessary. If the business is still operating and has revenue, it is necessary to focus on propaganda and mobilizing the business to fulfill its obligations. If the business deliberately does not pay, strong measures must be taken, even proposing prosecution. However, if the business is really in difficulty, it needs support and obstacles removed.
Land revocation if obligations are not fully fulfilled
In 2024, the General Department of Taxation has directed tax departments to implement debt collection from the beginning of the year for debt groups that are collectible; immediately apply measures to urge, enforce and publicize information according to the provisions of the Law on Tax Administration in cases of large, slow and prolonged tax debts.
Specifically, in cases where tax arrears are less than 90 days old, the tax authority shall take measures such as calling, texting, sending emails, inviting to work, issuing tax arrears notices to urge payment to the state budget, not letting tax arrears linger, prolong, and limit new debts arising. In cases where tax arrears are more than 90 days old or tax arrears are subject to enforcement, the tax authority shall immediately apply enforcement measures and publicize information to recover tax arrears to the state budget. In cases where the enforcement decision expires and the taxpayer has not paid or has not paid the full amount of tax arrears to the state budget, it shall promptly switch to applying appropriate enforcement measures in accordance with regulations.
The next solution is to speed up the processing of pending debts and pending tax adjustments. Accordingly, for taxpayers with pending tax debts, tax departments focus on timely and properly resolving the documents that the tax authorities have received and are in the process of processing.
In particular, for debts of land use fees, land rent, and mineral exploitation rights fees, the tax authority shall review and accurately determine the amount of money the taxpayer still owes; fully account for and monitor the debts on the centralized tax management application system (TMS). In case of any problems, the tax department shall preside over and coordinate with relevant agencies in the area, report to the People's Committee of the province or city or competent authority to completely resolve the debt.
In case the land user has not fully fulfilled the obligation to pay land use fees and land rent and the tax authority has applied coercive measures but does not comply, the tax authority shall proactively issue a document requesting the People's Committee to recover the land in accordance with the provisions of the law on land...
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