Tax officials in Quang Nam Province Wednesday said they have recommended that the provincial government should cancel the license of a Canadian gold producer who owes more than VND296 billion (US$13.1 million) in taxes since last year.
Phuoc Son is one of two central Vietnamese mines worked by Besra Gold Inc.
The tax department has frozen the company’s accounts and stopped issuing VAT refunds (around 10% per transaction) to its customers since April last year, but said it has been unable to confiscate Besra’s assets since they have been pledged to banks.
Besra began working the Bong Mieu mine in Phu Ninh District in 1993.
In 1998 it began operations at Phuoc Son, the largest gold mine in Vietnam situated in a district of the same name.
Despite the fact that the latter has yielded 6.9 tons of gold since 2008, Besra reportedly failed to pay mining royalties, VAT and environmental protection fees.
The freezing of its accounts and stoppage of VAT refunds prompted Besra to stop work at its two mines since July last year shortly before its COO Darin Lee requested a reprieve saying the closure had left more than 1,000 workers jobless and exposed the mines to thieves.
A tax official said the department wanted to be tough on the company, but the provincial leadership kept ordering it to ease up on Besra.
Besra, which is owned by three brothers, has a poor reputation in Quang Nam, where it owes local businesses VND30 billion.
Le Dinh Thuc, the director of a fuel company, grabbed the microphone during a press briefing organized by Besra and Quang Nam officials on August 7 and demanded that the company should pay VND 6.6 billion ($311,000) it owed his firm.
In December 2013 hundreds of people, including food vendors, hotel owners, and Besra's primary local contractor (who claimed to be owed more than half the outstanding sum), staged a protest in front of the Phuoc Son mine.
The next day the company promised to pay its debts, claiming its operations had been strained by falling gold prices, rising mining fees and tropical storms.
But in January it announced it would not pay its main contractor, Quang An Company, saying it had organized the one-day protest, which stopped movement in and out of the mine and caused losses of $850,000.