Business
Vietnam’s tax arrears pile to over US$3.5 billion
Of the total tax arrears, 35.2% are deemed collectible, 19.4% are tax penalty due to late payment and violation of tax laws, while the remaining 45.5%, equivalent to VND37.64 trillion (US$1.6 billion), is irrecoverable debts.
Vietnam’s total tax arrears reached VND82.97 trillion (US$3.54 billion) as of March, up 9% or over VND6.64 trillion (US$283.77 million) against the previous quarter, according to the Ministry of Finance (MoF).
By the end of last year, tax authority collected VND7.45 trillion (US$318.34 million), equivalent to 19.2% of total debts with maturities within and over 90 days.
According to the MoF, 35.2% of the total outstanding debts are deemed collectible, 19.4% are tax penalty due to late payment and violation of tax laws, while the remaining 45.5%, equivalent to VND37.64 trillion (US$1.6 billion), is irrecoverable.
Cases of irrecoverable debts mean the tax payers either are dead, missing, have lost the civil act capacity or their companies are subject to bankruptcy.
For bankruptcy cases, businesses failing to pay tax have seen their businesses licenses removed, however, their tax arrears remained irrecoverable.
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 irrecoverable. This would lead to an increase in the amount of tax fine, while there is no way to collect the principal debt.
Another issue is the late payment from land use or rent due to delay in the site clearance or compensation process.
State budget revenues in the January – March period reached VND381 trillion (US$16.43 billion), up 13.2% year-on-year. Meanwhile, Vietnam's state budget expenditures in the first quarter totaled VND315.6 trillion (US$13.61 billion), up 7.6% year-on-year.
This resulted in a budget surplus of VND66 trillion (US$2.84 billion) in the first quarter, indicating a sharp improvement from a budget surplus of VND18.48 trillion (US$797.02 million) in the same period of 2018.
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According to the MoF, 35.2% of the total outstanding debts are deemed collectible, 19.4% are tax penalty due to late payment and violation of tax laws, while the remaining 45.5%, equivalent to VND37.64 trillion (US$1.6 billion), is irrecoverable.
Cases of irrecoverable debts mean the tax payers either are dead, missing, have lost the civil act capacity or their companies are subject to bankruptcy.
For bankruptcy cases, businesses failing to pay tax have seen their businesses licenses removed, however, their tax arrears remained irrecoverable.
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 irrecoverable. This would lead to an increase in the amount of tax fine, while there is no way to collect the principal debt.
Another issue is the late payment from land use or rent due to delay in the site clearance or compensation process.
State budget revenues in the January – March period reached VND381 trillion (US$16.43 billion), up 13.2% year-on-year. Meanwhile, Vietnam's state budget expenditures in the first quarter totaled VND315.6 trillion (US$13.61 billion), up 7.6% year-on-year.
This resulted in a budget surplus of VND66 trillion (US$2.84 billion) in the first quarter, indicating a sharp improvement from a budget surplus of VND18.48 trillion (US$797.02 million) in the same period of 2018.
