Vinashin pays outstanding taxes with restructuring funds

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Vinashin is scrambling to clear VND638 billion (US$30.6 million) in back taxes after a request for the dismissal of its arrears was turned down in May.

The state-owned shipbuilder is now utilizing funds that were granted as part of a government restructuring plan to pay VND353 billion in debts owed by four of its major subsidiaries,VnExpress reported last Monday.

The state shipbuilding company also requested permission to clear another VND285 billion owed by the Nam Trieu Shipbuilding Industry Corporation using the same funds.

Vinashin attempted to clear penalties for its own overdue tax debts in early May by unsuccessfully appealing for a government exemption. Following the refusal, the corporation has continued to accrue 0.05 percent penalties on its massive arrears every day that they have gone unpaid.

Last year, Prime Minister Nguyen Tan Dung stipulated that Vinashin would have to pay all outstanding taxes (and related fines) by the end of 2011 in order to qualify for an exemption on import and value-added taxes on goods for Vinashin's incomplete contracts through 2012.

Vinashin nearly went bankrupt in 2010 under the weight of a $4.5 billion in debt and nine of the company's high-ranking executives were sentenced to between three and 20 years in prison.

Vinashin has been slowly implementing a government-mandated restructuring plan designed to refocus the firm on shipbuilding and repair contracts.

The plan is designed to cut Vinashin's 200 subsidiaries and joint-ventures to 20 by 2013, Sai Gon Tiep Thi reported, citing the government website.

The restructuring plan will limit Vinashin to a maximum of 15 subsidiaries by next year's deadline.

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