Vietnam tax authorities come under fire for naming, shaming defaulters

By Thanh Nien Staff, Thanh Nien News

Email Print


  A Hanoi tax office. Photo: Ngoc Thang
This week tax offices in Hanoi and Ho Chi Minh City released lists of hundreds of businesses with huge overdue taxes in an effort to shame them into paying the money.
They also threatened to block bank accounts or invalidate invoices of businesses that fail to pay up and hand over their cases to the police.
The move, a part of the Ministry of Finance's efforts to reduce back taxes estimated at VND72 trillion (US$3.24 billion) currently, seems effective so far with some businesses reportedly scrambling to pay.
However, the move has caused resentment among many companies and annoyed economists.
They said it is "unfair" that tax authorities go after private businesses, while the tax agencies themselves and many other state agencies get away scot-free with debts they owe businesses, especially tax refunds and payment for public construction works.
Ngo Tri Long, an economist, said government agencies and local governments sit on the money they owe contractors of public projects for years, causing financial trouble for many companies, but none of the officials responsible for this have been named or punished.
He quoted a 2013 report by the Ministry of Planning and Investment as saying the debts related to construction had risen to VND91 trillion ($4 billion).
Statistics from the General Department of Taxation showed that the government owed businesses nearly VND17.24 trillion ($776.33 million) in tax refunds as of last year.
'Extremely unreasonable'
Nguyen Thai Son, vice chairman of the Ho Chi Minh City Tax Agents Club, said though the law states that tax agencies have to pay interest when they delay tax refunds to businesses, they rarely do.
Nguyen Thi Thu Trang, finance manager of HCMC-based interior construction company C.N.D Aluminum Glass, said when her company delayed payment of taxes, it was slapped with interest much higher than bank rates.
But the tax offices themselves did not pay any fines in a similar situation, even in case of delays lasting years and amounts involving billions of dong, she said.
"It is extremely unreasonable and unfair to businesses."
Despite their resentment, businesses rarely dare take legal action against official agencies, Long said.
In Vietnam, laws are not enforced strictly and people rely on personal contacts to do business; so businesses tend to fear state agencies, he explained.
Another economist, Do Thien Anh Tuan, agreed, saying that in many countries when a state agency owes them money, companies can go to court.
"It is a pity that our laws are not that good."

More Business News