Tax debt settlement under Resolution 94 has been in place for a lot of time, but the tax sector has quickly carried out debt freezing and write-offs to reduce pressure on the tax agency and help solve difficulties for enterprises

The Tax Department is urgently deploying the tax debt settlement
under Resolution 94/2019 / QH14. Photo: Thuy Linh

Tax debts of VND26 trillion processed

From the beginning of the year to February 25, tax agencies at all levels have frozen tax debts and cancelled late payment interests of irrecoverable debts under Resolution 94 VND1,803 billion VND. The frozen debt was VND1,386 billion and forgiven late payment interest was VND417 billion, reported by the General Department of Taxation.

By end of February, debts handled under Resolution 94 was VND25,958 billion, or 58.8% of irrecoverable debts at the end of 2019. Of which, the frozen debt was VND24 trillion and forgiven late payment interest was VND1,958 billion.

Although the time for tax debt settlement lasts three years from July 1, 2020, the tax sector has not delayed this important task. Tax departments nationwide have implemented debt freezing and cancellation for cases specified in Resolution No. 94/2019/QH14 and updated information on their own portals.

As at PhuTho Tax Department, so far, the department froze debts for 1,894 taxpayers to the tuneof VND118.9 billion; and cancelled debts for 2,432 taxpayers with the amount of VND50.6 billion. PhuTho Tax Department targets to finish tax debt freezing and write-offs of fines for late payment and late payment interest per the provisions of Resolution No. 94/2019 / QH14 on December 31, 2021.

Another unit is Bac Ninh Tax Department, Bac Ninh Tax Department and its affiliated tax branches have focused on profiling for tax debt freezing and cancelling fines for late payment and late payment interest. The unit has issued a decision to freeze debt for 4,490 taxpayers, equivalent to VND129.3 billion and proposed the General Department of Taxation consider debt relief for two firms and proposed the Ministry of Finance and the Government to forgive debts for one business with the total amount of VND29.9 billion. This unit also made a first proposal for debt relief to the provincial People's Committee for 4,014 taxpayers.

Great significance to enterprises 

As reflected in several tax departments, those who are proposed for debt freezing and write-off are: taxpayers who are dead, declared as dead by the court, missing or incapable of civil acts; taxpayers who are sending a dissolution decision to the tax agency and the business registration agency to carry out dissolution procedures, or taxpayers listed on the National Portal for their ongoing proceedings for dissolution but have not yet complete the dissolution procedures; taxpayers who have applied for dissolution or have been forced to be dissolved; or taxpayers who no longer operate at the business addresses registered with the business registration agency and tax agency.

According to a tax official at Thai Nguyen Tax Department, the number of taxpayers subject to the provisions of Clause 4, Article 4 of Resolution 94 accounts for the highest proportion among the total number of applications for debt settlement.

Most of these taxpayers no longer do business at the business addresses registered with the business registration agency and tax agency.

Although the number of applications is quite large, there are taxpayers who only owe a few thousand dong, even a few hundred dong and the tax agency still must monitor and manage on the management system. If the debt is not frozen, the late payment interest will continue to arise, leading to an increasing amount of tax debt.

In Thai Nguyen, only a few enterprises have large debts such as Viet Bac Construction and Mining Ltd,Gia Sang Steel Making and Rolling and Branch 522 - Viet Bac Construction and Mining Ltd.

The tax debt settlement is of great significance to many enterprises. For example, the case of Viet Bac Construction and Mining Ltd (Thai Nguyen City). The company is subject to dissolution under the Project on SOE restructuring of the Ministry of Defense that was approved by the Government in 2015. By May 2017, the Minister of National Defence signed a dissolution decision. Since then, the company has stopped all production and business activities. However, due to financial problems, especially fines for late tax payment, it cannot be dissolved. Therefore, tax debt settlement will help the company soon solve difficulties and problems.

This is the first time the National Assembly has issued a resolution related to tax debt freezing and cancellation of late payment fines and late payment interest for taxpayers. The resolution will help the tax sector reduce the pressure on debt management for irrecoverable debts.