Although the Covid-19 outbreak has been affecting tax debt collection, the tax sector is still drastically implementing each specific measure to achieve the goals of tax debt management.

The Covid-19 outbreak has been affecting tax debt collection.
Photo: Thuy Linh

VND 86,367 billion tax debt

The total amount of tax debt managed by the tax sector as of February 28, 2021 wasVND97,460 billion, down 10.4% in the early-year period; up by 2.5% compared to December 31, 2020, according to the latest report from the General Department of Taxation.

Notably, if excluding tax debts under settlement (submitted for write-off, exemption, reduction, extension, gradual payment of tax) and tax debts in dispute, the total amount of tax debts as of February 28, 2021 was VND86,367 billion (down 14.5% year-on-year andup 4.8% compared to December 31, 2020).

According to analysis by the General Department of Taxation, the recoverable tax is VND43,679 billion (an increase of 8.7% compared to 2020); theirrecoverable tax debt (taxpayers who are dead, self-dissolved, go bankrupt, stop operation) is VND24,900 billion (down 44.4% year-ago period and down 4.3% compared to January 2021).

Thesharp decrease in irrecoverable tax debts is due to the implementation of tax debt freezing and late payment interest write-off under Resolution No. 94/2019 / QH14.

The total amount of tax debt collected in February was only VND1,860 billion. As of February 28, it was VND5,110 billion, a year-on-year decrease. Thereduction is due tothe Lunar New Year holiday in February and the implementation of Covid-19 prevention measures.

As of February 28, 2021, the tax debt ratio to the total estimated revenue in 2021 was 8.7%, 3.7% higher than the assigned target (5%). Specifically, the recoverable tax debt ratio to the total estimated revenue in 2021 was 5.5%; the irrecoverable tax debt ratio to total estimated revenue in 2021 was 0.8%; and the ratio of tax debt in dispute to thetotal estimated revenue in 2021 was 0.2%.

Prevent deliberate delay in tax debt payment

To manage tax debts and collect debts in accordance with assigned targets, from the beginning of the year, tax departments have assigned the task of tax debt collection, debt and tax debt settlement in 2021 to each branch to guide each tax officer in charge of debt management.

From the beginning, the entire taxation sector has also extended tax payment, exempted late payment interest for taxpayers affected by the Covid-19 outbreak in a timely fashion according to the Law on Tax Administration and guiding documents to support taxpayers and raise revenues for the state budget.

Also, the taxation sector has promptly removed difficulties and problems for taxpayers and promptly handled bad debts and late payment debts for firms facing force majeure difficulties.

The taxation sector is also reviewing and classifying debts, standardizing tax debts, reflecting the true state and nature of tax debts, analyzing the causes of each tax debtor especially reviewing and classifying tax debtors who are affected or not affected by the Covid-19 outbreak to introduce appropriate measures for debt collection.

In particular, the taxation sector is taking tax debt collection measures for tax debtors abusing the Covid-19 outbreak to deliberately delay debt payment such as: account deduction, account blocksand notice of invalid invoices, assets distraint, auction of distrained assets, and revocation of business licenses and publishing information of taxpayers on mass media.

The extended review and handling of large debtors will also be focused to make a list of tax debtors to urge tax debt and collect new debts in order to avoid prolonged debts, causing difficulties for debt collection.

The taxation sector will continue to work closely with the party committees, local authorities, relevant ministries and agencies such as: the police, the State Bank, the courts, market surveillance, investment and planning agencies and national defense agencies in collecting outstanding debts especially debts related to land or charges for granting mineral mining rights.

Moreover, the inspection of collection and handling of irrecoverable tax debts at tax departments that have large and complicated tax debts will be enhanced.