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Official Gazette

Sunday, August 14, 2022

MOF proposes freezing tax arrears for difficulty-hit taxpayers

Updated: 16:13’ - 27/03/2018

The Ministry of Finance (MOF) is working on a draft resolution on handling tax arrears and irrecoverable fines for submission to the National Assembly.


Accordingly, the ministry proposes freezing tax arrears or tax debts. This means it would temporarily cease collection of tax and late-payment interests for those who have terminated their business activities for more than one year due to actual dissolution, except cases of splitting, merger or acquisition, and those who had their business licenses revoked.

Tax officers receive personal income tax dossiers at the Tax Department of
Hanoi__Photo: Hoang Hung/VNA


The uncollected tax amount of this particular group is now estimated at over VND 26.5 trillion (USD 1.08 billion), accounting for the majority of the total unpaid tax debt of around USD 1.18 billion.


The ministry also plans to relinquish late-payment interests for taxpayers who were stricken by disasters, fires, accidents or other force majeure events. However, such exemption would apply only to late payments not exceeding the paid value and the suffered damage, which the MOF estimated to be around VND 2.24 trillion in total, as of the end of 2017.


Nguyen Viet Loi, Director of the Institute for Financial Strategy and Policy under the MOF, said that “the ministry’s intention to freeze tax debts in some cases due to force majeure circumstances or objective obstacles is in line with new laws and regulations.”


However, in order to ensure that the tax debt remission is implemented in an objective manner, the stipulation of force majeure events should be clearly defined, he added.


Meanwhile, economic experts remained hesitant about the MOF’s plan.

Economist Nguyen Minh Phong said the basis for debt relief is enterprises’ ability to comply with the law, but tax arrears elimination also has limitations as it sets a bad precedent for enterprises and creates unfair competition.


“Therefore, in order to overcome these shortcomings, administrative criteria and principles for clearing tax arrears, late-payment interests and fines must be clear and justly issued,” Phong suggested.-(VLLF)


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