The draft Government Decree regulating tax debt thresholds and debt periods for cases of temporary exit suspension is being consulted for public opinion.

The Ministry of Finance proposes: From January 1, 2025, individuals/business owners with overdue tax debts of VND 10 million or more for more than 120 days will be temporarily suspended from leaving the country. Enterprises/cooperatives/cooperative unions that are forced to enforce overdue tax debts of VND 100 million or more for more than 120 days will have their legal representatives temporarily suspended from leaving the country.

Suitable for Vietnam but lower than the world

Sharing with VietNamNet reporter, Mr. Bui Quang Cuong, Director of iViet Business Development Solutions LLC, said that for individuals, taking the level of 10 million VND in overdue tax debt to apply the measure of temporary suspension of exit is considered reasonable, avoiding applying the measure of temporary suspension of exit for small debts, causing unnecessary trouble.

For businesses, the level of 100 million VND is also suitable, especially for small and medium enterprises. This level creates pressure for businesses to comply with tax obligations, but at the same time is not too low to cause difficulties for business operations.

Regarding the overdue tax period of more than 120 days, Mr. Cuong also assessed it as “reasonable”. This period of time is enough for taxpayers to arrange their finances and fulfill their tax obligations. At the same time, it helps tax authorities manage more effectively, avoiding the situation of prolonged debt.

Lawyer Pham Thanh Long, Founder of Gia Pham Law Firm, analyzed: Considering the current situation in Vietnam, the tax debt threshold of 10 million, 100 million VND and the 120-day deadline as proposed can be considered reasonable.

However, compared to many other countries, the tax debt threshold for temporary suspension of departure is still too low; the number of people at risk of being prevented from leaving the country will be very large.

“In the US, a tax debt of 55,000 USD (about 1.3 billion VND) including interest and penalties can be considered for temporary suspension of exit from the country,” Mr. Long cited.

Regarding the 120-day period, lawyer Pham Thanh Long suggested that we should consider when it is calculated, when the tax debt transaction occurred or after other tax enforcement measures have been applied. In many cases, tax debt notices are sent by post or text message, but taxpayers do not receive the information and therefore do not know they owe taxes.

In Canada and many other countries, temporary suspension of departure is almost the last resort, when other measures such as asset seizure, bank account freezing... have been applied but taxes still cannot be collected.

According to Lawyer Truong Thanh Duc, Director of ANVI Law Firm, when determining the tax debt threshold for temporary exit suspension, if the level is too low and the period is too short, it will affect production and business activities as well as socio-economic development.

“Each number given needs to have a logical basis and be linked to other legal regulations to make it simple, easy to remember, and easy to implement; then people and businesses will comply better,” said Mr. Duc.

For example, instead of setting a specific figure of VND10 million for individuals, Mr. Duc proposed using the starting level of personal income tax or the minimum wage as the basis for determining the threshold for tax debt to suspend exit. This avoids the case where the price later fluctuates or the reality changes, requiring the number to be adjusted accordingly.

Behind the tax debt threshold

“Many of my friends have been detained at the border. Now, whenever we are about to go somewhere, ‘Have you checked your taxes yet?’ has become a common phrase,” said lawyer Pham Thanh Long.

From a lawyer's perspective, Mr. Long emphasized: Which agency/organization has the right to use the restriction of travel as an administrative measure needs to be considered fully and in detail to avoid abuse of power.

Three joys of the new year 3.jpg
“Have you checked your taxes yet?” has become a common phrase for many people before going to the airport. Photo: Binh Minh

In the recent situation, many people only found out at the airport that their departure was delayed, causing a huge waste because they had booked flights, arranged schedules, etc., the director of iViet suggested that the management agency must "make sure that tax debtors know that they are in debt and are on the list of people banned from leaving the country".

In addition to diversifying the methods of notification to taxpayers (from electronic tax accounts, eTax Mobile to VNeID and email, SMS, Zalo...), tax authorities need to propagate so that taxpayers know where to look up tax debts and the list of delayed exits.

“Not everyone knows how to access the eTax Mobile application or electronic transaction account (thuedientu.gdt.gov.vn) to look up information themselves. Diversifying notification methods helps ensure that taxpayers receive timely and accurate information,” Mr. Cuong commented.

In addition, there needs to be a better coordination mechanism between tax authorities, airlines and immigration authorities. Tax authorities should regularly update the list of individuals who are suspended from leaving the country due to tax debts and share it with immigration authorities.

“With the support of modern technology, this process can be done in a short time, even in real time, helping taxpayers quickly be allowed to leave the country after completing their tax obligations,” Mr. Cuong affirmed.

According to Mr. Cuong, airlines and immigration authorities should also check passenger information based on the list of temporary exit suspensions; passengers should be immediately notified of tax debt status and the possibility of temporary exit suspension.

When discovering that a passenger is subject to temporary exit suspension, the airline or immigration authority should notify them immediately, giving them time to settle the tax debt before the flight takes place, avoiding wasting costs and time.

Proposal to temporarily suspend exit from the country for individuals with overdue tax debts of 10 million VND or more

Proposal to temporarily suspend exit from the country for individuals with overdue tax debts of 10 million VND or more

The Ministry of Finance proposes that from January 1, 2025, individuals/business owners with overdue tax debts of VND10 million or more for more than 120 days will have their exit from the country suspended. The tax authority will notify taxpayers electronically.
Don't let businessmen arrive at the airport and find out they've been delayed in their departure.

Don't let businessmen arrive at the airport and find out they've been delayed in their departure.

"If there were adequate notices and warnings, few people would trade their reputation to delay paying a few million dong in taxes," the expert said.
Businessman delayed from leaving the country due to debt of several million or billions: 'I don't joke about my business'

Businessman delayed from leaving the country due to debt of several million or billions: 'I don't joke about my business'

"Under normal health conditions, no one wants to owe taxes to the point of having to temporarily suspend their departure from the country. Enforcing invoices is already torture for businesses," a business representative shared.