Agencies in the Mekong Delta province of Ca Mau are investigating a case in which a gold shop is suspected of evading VND54 billion (US$2.6 million) in taxes with help from a tax official.
Vietnam's largest gold trader SJC Gold Co. was also allegedly involved in the case as a customer of Hoang Khiem shop in Dam Doi District.
According to the provincial inspectorate's conclusions, Hoang Khiem shop's invoices showed that its sales between January and November 2010 saw an increase of up to VND7.712 trillion ($366.6 million) within seven months.
Around 99 percent of the suspected sales were recorded as trades with SJC, while Asia Commercial Bank had trades worth VND70 billion ($3.3 million).
However, the shop declared to the Dam Doi District's tax office that its fixed monthly income was just VND714 million ($34,000), inspectors said.
It was Le Thanh Du, chief of Dam Doi District's Tax Agency, that allowed the shop to evade taxes worth VND54 billion, accounting for more than 71 percent of the district's budget, according to inspectors.
They said it was against regulations that Dam Doi's tax office imposed fixed taxes on the shop whose sales were not stable.
Meanwhile, when detecting the drastic increase in the shop's sales, allegedly in August, Du failed to report it to Ca Mau Province's Tax Agency, inspectors said. Not until September 14 did the official make the report, but he just mentioned the two months when the shop's sales were low, leading to the tax agency's incorrect assessments, they added.
Officials also accused Dam Doi's tax office of failing to follow the order to review Hoang Khiem's business issued by the agency on October 7 last year. The review wasn't launched until May 5 this year.
A source told Thanh Nien that the Ministry of Public Security's ant-economic crimes department was also investigating the origin of the gold recorded in the suspected sales.
Inspectors said while the sales were equal to more than seven tons of gold, the shop couldn't present documents showing its origin.
Dinh Phuoc Tho, deputy chief inspector, said they his office has proposed Ca Mau's People's Committee and the General Department of Taxation to order the provincial tax agency to collect the taxes from Hoang Khiem, and handle the case in accordance with laws.
"I was truly shocked at the findings," Tho said. "Hoang Khiem shop's sales in seven months were unbelievably high for such a business in a distant area."
Dam Doi tax division's statistics showed that the highest sales of local gold businesses were VND1.5 billion ($71,300).
Meanwhile, Pham Khac Ghi, head of Ca Mau tax agency, said his staff wouldn't make final decision on how to deal with the shop's violations until police conclude whether the business evaded taxes or sold fake invoices to other businesses so the latter could commit smuggling.
The accused taxes were calculated based on documents and invoices, Ghi said. If the shop did make the trades, the agency would collect the taxes, he added.
However, in a report to local agencies, Nguyen Binh Khiem, owner of the shop, said he opened a branch in Nha Be District, Ho Chi Minh City, where he processed gold for SJC.
Khiem said every day the branch process between 500 to 1,000 taels of gold at VND60,000 per tael. But SJC asked it to issue invoices stating that it sold the gold, so its sales increased dramatically, he added.
The case is being investigated.