Finance Ministry plans to forgive tax debts of SOEs
VietNamNet Bridge - The Ministry of Finance (MOF) has proposed that state-owned enterprises (SOEs) be forgiven their tax debts, which are equal to a total of VND10 trillion. 

Vietnam, SOEs, SCIC, MOF

SOEs which have incurred losses and cannot pay taxes on time would not have to pay fines for late tax payments for debts that arose prior to July 1, 2013 if they had paid an original tax prior to December 31, 2015.

MOF, which is compiling the law amending some provisions of the tax management law, has also proposed to free enterprises from their debts if their tax debts are equal or higher than the state’s ownership capital in the enterprises.

The attempt by MOF to free SOEs from debts has been harshly criticized by economists. 

Dr. Do Thien Anh Tuan, a lecturer of the Fulbright Economics Teaching Program (FETP), said in Mot The Gioi that the the proposal was “extremely unreasonable”.

“It seems that late taxpayers receive an award with tax debt relief. And this means that the enterprises which execute the policies get fined,” Tuan said. 

“Such an unreasonable policy must not be accepted,” he said.

Tuan also warned that if MOF cancelled enterprises’ debts, it would encourage enterprises to rely on the state.

“Businesses may think that the State today agrees to forgive debts. This means that it may also agree to do this tomorrow,” he explained.

An analyst commented that he can see no reason for the State to cancel enterprises’ debts. 

“All businesses are equal in the market economy. All of them do business and have to pay tax. Taking a loss is a normal thing in business and it is must not be the reason for them to stop tax payments,” he said.

Nguoi Lao Dong quoted an MOF official as saying that the policy suggested by MOF would help ease the big difficulties faced by enterprises, and that it would help ease the burden on taxation agencies. 

“The national economy has experienced very tough days recently, while many enterprises took losses and were dissolved,” he said.

According to the official, tax relief does not have much significance in reality, because many enterprises have stopped their business. 

Meanwhile, it is not easy for taxation bodies to track down taxpayers. As a result, the debts have been pending for a long time.

However, the analyst commented that canceling enterprises’ debts was not the right solution to help businesses ‘ease difficulties’, and may do more harm than good.

Enterprises which have not paid due debts may file for bankruptcy and then set up new businesses.

Kim Chi

Vietnam, SOEs, SCIC, MOF