Xuyen Viet Oil used many "tricks" to cheat and deceive management agencies in the petroleum business and owed 1,500 billion VND in taxes, nearly 20% of the tax debt in Ho Chi Minh City.
Deputy Minister of Industry and Trade Do Thang Hai was arrested on December 21 on charges of wrongdoing in a case involving Xuyen Viet Oil. Previously, the Director of the Ho Chi Minh City Department of Finance and Mr. Le Duc Tho, former Secretary of the Ben Tre Provincial Party Committee, were also prosecuted and detained for investigation in connection with the case at this enterprise.
Many fraudulent tricks of Xuyen Viet Oil
Xuyen Viet Oil is one of 37 petroleum trading companies (including aviation petroleum trading companies) established in 2005, headquartered in Ho Chi Minh City. This company was first licensed in 2016, then re-licensed for the second time in November 2021. In Ho Chi Minh City and some South Central provinces, Xuyen Viet Oil's market share accounts for about 40%, and nationwide is nearly 10%.
In August this year, the Ministry of Industry and Trade revoked the company’s license to import and export gasoline when the term was 3 years. At that time, the Ministry explained that the license was revoked due to violations in the gasoline business and misappropriation of the Price Stabilization Fund.
In fact, since the end of 2022, violations by Xuyen Viet Oil have been pointed out by the Inspectorate of the Ministry of Industry and Trade when inspecting this unit and many other sources after the chaos in the market at the beginning of the year. According to the inspection conclusion, this petroleum source was licensed to do import and export business but did not meet the conditions on the distribution system (must have at least 40 general agents or agents, retail franchisees).
Xuyen Viet Oil fraudulently declared its dealer system, through signing a share transfer contract, to record 36 stores of Dai Dong Xuan Company in its distribution system. However, immediately after being licensed by the Ministry of Industry and Trade, in November 2021, these two enterprises immediately canceled the above share transfer contract.
A Xuyen Viet Oil gas station in Ho Chi Minh City, 2020. Photo: VietOil
Regarding the purchase of goods, according to regulations, the focal point is allowed to buy gasoline from many sources to ensure supply in the system. In addition to buying gasoline from two domestic oil refineries, Xuyen Viet Oil purchased goods from its own subsidiary - Viet Oil Group Lado Joint Stock Company. This violates the provisions of Decree 83/2014 on gasoline trading, according to the Inspectorate of the Ministry of Industry and Trade.
In addition, this enterprise also violated regulations on export, temporary import, re-export, and transit of petroleum, as well as failing to inspect and supervise the quality and operations of general agents and agents in the system.
The inspection results showed that the reports and records provided by this enterprise to the inspection team did not match the data monitored by the Domestic Market Department (Ministry of Industry and Trade). Regulations on quarterly and annual periodic reports on the business situation, petroleum trading, import - export - inventory data to the Ministry of Industry and Trade were also not complied with by Xuyen Viet Oil or were submitted late.
With a series of violations and fraudulent tricks in business, this enterprise was fined 390 million VND and had its gasoline import and export business license revoked for 1.5 months (from August 10 to September 13, 2022).
But before being cited by the Ministry of Industry and Trade Inspectorate for a series of violations at the end of last year, this enterprise was also among those inspected for petroleum trading since May 2021, but then the name Xuyen Viet Oil was removed from the list.
Explaining this, the Ministry of Industry and Trade affirmed that the adjustment of the 2021 inspection plan and the removal of Xuyen Viet Oil's name was objective and consistent with the actual situation. Because the inspection was interrupted and could not be carried out due to the complicated developments of the Covid-19 epidemic in Ho Chi Minh City (April - October 2021). On the other hand, at this time, Xuyen Viet Oil's license expired, the enterprise submitted an application for re-issuance in November 2021 and at that time, all the conditions for re-issuance of the license were met.
Businesses owe thousands of billions of dong in taxes
In addition to violations in the petroleum business, Xuyen Viet Oil continuously suffered losses and was on the list of tax debts of thousands of billions of dong.
The business results of the last 5 years of this enterprise show that it recorded "huge" revenue every year. Typically, in 2021 - when Ho Chi Minh City was heavily affected by the Covid-19 epidemic - the enterprise's revenue reached 22,500 billion VND, double that of 2020. However, in contrast to the large revenues, Xuyen Viet Oil continuously reported losses for many years, such as negative 371 billion VND in 2018. The loss increased to 424 billion VND in 2019 and doubled to 957 billion VND in 2020.
The loss will continue to increase in 2022 - the year when the domestic petroleum market will experience a supply disruption, world prices will fluctuate strongly, even equity will be negative, and solvency and debt will be high.
At the same time, according to the tax debt list made public by the Ho Chi Minh City Tax Department at the end of October 2023, Xuyen Viet Oil owed a "huge" tax of more than VND 1,500 billion, accounting for nearly 20% of the city's total tax debt of VND 8,000 billion. But it is worth noting that in the previous public tax debt list of 2023 and 2022, Xuyen Viet Oil was not named (according to the General Department of Taxation's document, Xuyen Viet Oil actually incurred tax debt before October this year).
From 2020 to July 2022, the General Department of Taxation assessed that the Ho Chi Minh City Tax Department had not resolutely requested businesses to fulfill their budget obligations with the tax amounts arising on the monthly declarations, from October 2021 to July 2022, even though at that time the businesses were still able to pay taxes. Only when businesses incurred large tax debts did the City Tax Department begin to apply urging and enforcement measures.
However, the Ho Chi Minh City Tax Department has only applied coercive measures such as deducting money from accounts, stopping customs procedures, stopping invoices, and revoking business registration certificates, but has not yet taken the next steps such as seizing assets, auctioning seized assets, and collecting money and other assets held by other agencies, organizations, and individuals.
Not only does Xuyen Viet Oil owe thousands of billions in taxes, it also has outstanding debts classified as bad debts, with nearly 5,500 billion VND at 4 banks. At the time its license was revoked in August, this enterprise was still "holding" more than 200 billion VND from the Price Stabilization Fund. The Ministry of Finance has repeatedly urged the enterprise to pay back but has not received any response.
Regarding the series of violations by Xuyen Viet Oil, Lieutenant General To An Xo, spokesman for the Ministry of Public Security, once said that there were many loopholes in the management and control of petroleum business. According to him, this is a commodity with a large daily consumption volume, a lifeline like air, but the fact that this situation happened shows that businesses are not afraid.
In fact, when concluding violations by petroleum hubs at the end of 2022, the Inspectorate of the Ministry of Industry and Trade also said that some departments and bureaus at this agency, in their role as State management agencies, had not promptly inspected, compared, and reviewed reports on violations by enterprises. These agencies were also slow in detecting violations, recommending competent authorities to sanction administrative violations, and applying penalties according to regulations.
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