Thousands of enterprises have been added into the taxation bodies’ black list because they have escaped with unpaid tax.
The Hoan Cau Company Ltd headquartered in district 11 of HCM City, a spongy bag producer has not paid the VAT of 22.799 billion dong.
Within just three months, from July 21 to October 17, 2008, the company made 87 customs declarations about the primary resin imports at five sub-departments of the HCM City Customs Agency, and three customs declarations at the Binh Duong provincial Customs Agency.
The imports were plastic resins which bear the import tariff of zero percent and the VAT of 10 percent. As such, the total tax sum the company had to pay was 22.799 billion dong.
Under the current laws, primary resin importers can pay tax within 90 days since the day they get the imports cleared. Exploiting the policy, La Hue Kiet, US nationality, Director of the company, and other foreign capital contributors have escaped Vietnam, repudiating the 23 billion dong worth of unpaid VAT.
As for other import products, including cars and motorbikes, importers cannot enjoy the grace period and they have to pay tax immediately on the customs clearance.
In an effort to collect the debts, the HCM City Customs Agency has sent a dispatch to the police, requesting the assistance to find out the debtor. In reply, the police promised to cooperate with customs agencies in collecting debts, then prosecuted Kiet for his “abusing of power to misappropriate assets.”
However, Kiet ran away during the grace period already, while the police have not arrested him though a wanted notice has been released.
Hoan Cau is just one of the over 1000 businesses which have unpaid tax or escaped from tax duties which have been marked in the customs agencies’ records as “irrecoverable debts.”
A report by the HCM City Customs Agency showed that by October 31, 2012, it had found 1118 businesses run away, leaving a huge sum of unpaid debt worth 421.5 billion dong.
The Saigon Port Customs Sub-department No. 3 alone has reported that 117 businesses have run away from their registered addresses with 66 billion dong unpaid debts.
An official of the sub-department said that many of the enterprises fled right in the grace period. Thien Thanh Phat Housing Construction and Development, for example, has not paid the tax sum of 5.4 billion dong which it should have paid in 2004 for the car imports. Him Lan Trade and Production Company is owing 4.5 billion dong.
In principle, coercive measures can be applied to force enterprises to pay tax. However, an official of the customs agency said the measures would be effective only if the enterprises are still in operation. Meanwhile, customs officials can do nothing with the enterprises which have escaped from the registered addresses.
In these cases, customs agencies would transfer the records of the violators to the investigation agencies. However, the measure still has not been exploited well, because of the lack of the cooperation among state management agencies, which has been explained by the lack of the legal documents stipulating clearly the responsibilities of the involved parties.
Customs agencies are the subjects covered by the Tax Management Law. However, under the current criminal laws, customs agencies have no authorities to prosecute criminal charges for “tax evasion.”
The HCM City Customs Agency has asked to give it more power in order to fight against the tax evaders.