Many businesses operating in Da Nang have managed to avoid paying some taxes by taking advantage of a loophole in the business registration law.  The problem occurs because a business in huge tax arrears can abruptly close down their operations, but then register to set up a new business in another locality.  This deliberate tax evasion has adversely affected the city’s tax collections.

According to the Taxation Department, by the end of October around 800 billion VND-worth of overdue tax arrears had been reported in the city.  Of this, bad debts stood at about 300 billion VND and 170 billion VND in fines was imposed for delays in tax payments.  Amongst local tax debtors, the ITG-Phong Phu Company in the Hoa Khanh Industrial Park now owes over 5 billion VND.

In an attempt to deal with this problem, the city’s Taxation Department has taken strong measures to collect tax debts from local businesses.  The tax debtors’ bank accounts were frozen, invalidating their businesses’ invoices, and other penalties have been imposed on the tax evaders.  Since the beginning of this year, 12,539 tax debtors locally have had their bank accounts blocked, whilst another 527 have had their businesses’ invoices invalidated.