Vietnam’s finance ministry proposes canceling US$705.6 million in tax fine
Most of the tax arrears came from tax payers who were death, missing, have lost the civil act capacity or their companies are subject to bankruptcy.
ietnam’s Ministry of Finance (MoF) proposed to cancel VND16.4 trillion (US$705.6 million) in tax fine for late payment, according to Finance Minister Dinh Tien Dung.
Illustrative photo.
|
Despite strong efforts from the MoF in collecting back tax arrears, however, the amount remains high at VND88.25 trillion (US$3.79 billion) as of the end of August, up 8.2% compared to the end of 2018, Dung said at a hearing held by the National Assembly on October 22. The ratio of tax arrears to total tax revenue, however, has declined from 12.2% in 2014 to 6.9% as of late August, Dung noted.
According to Dung, of the figure, the amount of tax arrears considered uncollectible is nearly VND43 trillion (US$2 billion), or 49% of the total.
Most of the tax arrears, Dung said, came from tax payers who were death, missing, have lost the civil act capacity or their companies are subject to bankruptcy. A major part of the tax arrears are tax debt of enterprises and individuals no longer staying at their registered business addresses, reaching VND24.2 trillion (US$1.04 billion), Dung stated, adding half of this sum was penalty for late payment.
Additionally, the Law on Tax Administration stipulates the tax penalty for late payment is equal to 0.03% of the tax amount for each day of late payment, regardless of the tax amount being uncollectible.
This led to VND16.4 trillion (US$705.6 million) in the amount of tax fine as of August, and there would be no way to collect such arrears.
Chairman of the Finance Budget Committee under the National Assembly Nguyen Duc Hai said the amount of uncollectible tax arrears subject to be written off under the Law of Tax Administration is very low, accounting for 0.51% of the total uncollectible arrears. However, due to the tax penalty of 0.03% was added to such amount every day, the total sum has piled up and put pressure on tax authorities.
Hai requested the government to thoroughly review the responsibilities of tax authorities in having the situation of high amount of tax arrears for a long period of time.
