The MoF proposes to freeze tax arrears/debts. This means it would temporarily cease collection of tax and late payment fines for those who have terminated their business activities for more than one year, due to actual dissolution of taxpayers (except for cases for splitting, merger or acquisition), and those who already had their business licence revoked.
The estimated uncollected tax amount of this particular group is now more than VND26.5 trillion (US$1.16 billion), making up the majority of total unpaid tax debt of around US$1.18 billion.
The ministry also plans to relinquish late tax fees for taxpayers who were struck by natural disasters, fires, accidents or other force majeure circumstances.
Such exemption only applies to late payments not exceeding the paid value and the suffered damage, which the MoF estimated to be around VND2.24 trillion (US$98.6 million) in total, as of the end of 2017.
In particular, tax debt exceeding the 90 days payment window accounted for more than VND26 trillion (US$1.14 billion); overdue fines were more than VND15.6 trillion (US$687.2 million); while irrecoverable tax from deceased or incapacitated people accounted for over VND31.4 trillion (US$1.38 billion), up to 43% of total tax debt and 3.2% of total domestic revenue in 2017.
Meanwhile, the total amount of tax arrears, late payments and fines under the management of customs in 2017 was more than VND5.4 trillion (US$237.8 million) - 70% of which is deemed irrecoverable - having increased by 23.5% from the end of 2016.
The combined amounts of tax loss under tax and customs agencies in 2017 amounted to almost half of the national tax debts.
Unrecoverable debt levels have been high in recent years, prompting tax authorities to implement drastic measures to speed up enforcement and recovery of tax debts.
In 2017, the entire tax branch scrambled to collect VND44.7 trillion (US$1.96 billion) in debt, equal to 89.9% of outstanding tax debt from 2016.
According to the General Department of Taxation, the tax branch will implement changes in tax debts management in order to improve State budget’s revenues in 2018, by associating tax recovery with administrative reforms for taxpayers across all economic sectors.
In addition, the department will also review debts that are possibly no longer subjected to collection, thereby proposing appropriate remedial measures and reducing tax arrears.