The provincial Tax Department is focusing on handling and collecting tax arrears to supplement the state budget, serve the province's development investment and social security.
Increasing trend of tax debt
In recent times, the Provincial Tax Department has drastically implemented solutions to support and create maximum convenience for taxpayers. At the same time, it has strengthened propaganda to remind taxpayers to voluntarily fulfill their tax obligations in accordance with State regulations; and implemented strong measures against cases of lingering and prolonged tax debts.
Difficult business operations affect tax debt settlement.
Tax debt management and timely collection for the State budget continue to be considered a key task that the tax sector has focused on since the beginning of 2024. The tax sector has focused on urging and applying drastic measures to enforce tax debt collection against enterprises with large debts. As a result, the tax arrears of a number of enterprises have been recovered into the state budget, compared to the debt on December 31, 2023, it has decreased by VND 207.5 billion. However, the tax debt situation is still high, estimated at VND 1,428.6 billion as of February 19, 2024; of which: the total tax and fee debt is VND 744.8 billion; the total debt collection capacity of the previous year is VND 67.3 billion.
Ms. Tran Thi Dieu Hoang - Director of the Tax Department analyzed: The reason for the high tax debt is that after the pandemic, the "health" of enterprises has declined and encountered many difficulties. Production and business activities are not favorable, access to loans is limited, and the situation of losses is prolonged. Many enterprises operate at a low level, temporarily suspend production and business, leading to an increase in tax debt, causing difficulties in exploiting revenue sources in the area. According to preliminary statistics of the tax authority, in recent years, 520 enterprises have temporarily suspended business and closed tax codes in 2021, 997 in 2022, 869 in 2023, and 374 in the first 2 months of 2024 alone...
According to the tax industry, tax debt is likely to increase in 2024, with the current debt ratio over the province's total budget revenue accounting for over 10%. Tax debt is mainly concentrated in the following business sectors: real estate; mining industry; construction, wholesale and retail; repair of cars, motorbikes, motorcycles and other engines; banking and finance, insurance; accommodation and catering services, etc.
Difficulty in debt collection
According to the assessment of the Tax sector, the debt to total revenue ratio is still high, the reason is that some enterprises owe taxes, continue to incur additional taxes that have expired the extension period as prescribed in Decree 12/2023 of the Government. Some enterprises have long-term tax debts, due to problems, have not yet come into operation, exploitation, waiting for localities to clear the land, resolve compensation, disputes, or wait for approval of plans to adjust the purpose of use, adjust the exploitation area, so taxpayers have not paid money to the state budget, specifically: Saigon Investment Company Limited; 677 Traffic Construction Joint Stock Company; Cat Tuong Mineral Exploitation and Processing Company Limited... At the same time, debts for land rent and mineral exploitation rights of enterprises continue to arise every year but are difficult to recover.
The Tax Department analyzed that many enterprises are struggling in the general economic difficulties. Bank interest rates remain high, the real estate market is trading poorly, affecting the ability to pay debts and financial obligations. Capital is mainly used for restructuring and reinvestment, so if paying all tax obligations, enterprises will completely lose liquidity and cannot create surplus funds to ensure operations and maintain business activities. Specifically: Delta Valley Binh Thuan Company, Tan Ha Investment Company Limited... In addition, some enterprises have a very large amount of tax debt arising every month, however, due to financial difficulties and money sources, enterprises can only pay debts over 90 days and accept to pay late tax payment penalties of 0.03%/day, which is one of the reasons for the increase in tax debt and late payment, specifically: Song Binh Mineral Company, Tan Quang Cuong Trading Company Limited; Ta zon Joint Stock Company...
To effectively carry out the task of debt management in 2024, the Tax sector has proposed many solutions to focus on implementation. In particular, the Provincial Tax Department deploys and specifies the task of collecting tax debts, handling debts and annual tax arrears to each officer and civil servant in charge of debt management of the functional departments of the Department's office and the Tax Branches of regions, districts and cities. Review and classify tax debts to ensure that they are in accordance with the nature of the debt, analyze the causes of debt of each taxpayer to apply debt collection measures appropriate to each case of tax debt. Fully implement measures to urge, enforce and publicize information in accordance with the provisions of the Law on Tax Administration...
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