Amid the ongoing upward trend in tax arrears, the Da Nang Taxation Department is implementing numerous effective measures to promote collection of tax arrears and combat tax losses.

The Da Nang Taxation Department is implementing many measures to promote collection of tax arrears and combat tax losses. Tourists are pictured visiting the Han Market

As of the end of February, the total amount of overdue taxes and fines associated with the late payment across the city had been amounted to over 1,553 billion VND.

Of this figure, there were 746,416 billion VND in recoverable tax arrears, nearly 478 billion VND in tax debts that are overdue for more than 3 months and nearly 794 billion VND in bad debts.

In particular, the city is seeing a growing amount of bad debts. Corporate tax debts facing businesses which have changed the address of their headquarters to dodge taxes hit over 618 billion VND in total, accounting for 77.85% of bad debts. This figure is increasing day by day due to the associated fines for the late payment.

In 2018, it was reported that 225.7 billion VND in tax arrears was recovered by Hai Chau Taxation Division.

Meanwhile, the Son Tra District Taxation Division promoted the use of phone calls, text messages, and e-mails to remind enterprises of unpaid taxes that are overdue for a long period, and sent a dispatch to the Department of Planning and Investment to revoke the business license for 37 tax debtors. Thanks to the use of these strict measures, unpaid taxes of more than 23.1 billion VND which were overdue from previous years were recovered.

According to the assessment by the Da Nang Taxation Department, the amount of tax arrears reported last year, and the first 2 months of this year increased highly. The main reasons seem to be that many businesses changed the address of their headquarters to dodge taxes, went bankrupt or dissolved, faced financial difficulties. They, therefore, was unable to pay their persistent debts. Still worse, some taxpayers are not totally aware of fulfilling their tax obligations.

The municipal Taxation Department is taking stricter measures to collect unpaid tax debts. Accordingly, district-level taxation authorities are required to continue implementing the Minister of Finance –issued Directive No 04 regarding the promotion of debt management and the coercive collection of tax arrears in a bid to reduce outstanding tax debts.

According to the General Department of Taxation, for business tax debts that are overdue for up to 3 months, formal tax collection requests will be made detailing the amount of overdue taxes and any fines associated with the late payment.

Enterprises will have money extracted from their bank accounts or have their bank accounts frozen if the unpaid taxes remain for the 4th month.

Any overdue debts that last longer than 4 months will result in complete invalidation of the company’s invoices.