Accordingly, the Government Inspectorate will focus its inspection on key areas such as tax debt and land fee debt management; compliance with policies and laws regarding tax declaration and settlement by businesses; and the handling of illegal invoices by the Ho Chi Minh City tax authorities.
1. Tax evasion by businesses and individuals is on the rise in Ho Chi Minh City.
The Government Inspectorate stated that the Ho Chi Minh City Tax Department is one of the leading tax units nationwide in implementing new tax policies, consistently achieving high state budget revenue, accounting for one-quarter of the national total, making a significant contribution to the socio-economic development of the locality, and meeting management requirements in the new situation.
However, the Government Inspectorate also pointed out limitations and violations in the management of the Ho Chi Minh City Tax Department. Firstly, the inspection plan still has a series of shortcomings in its planning, which is not aligned with reality and has not promptly prevented violations; the detection and handling of violations in the inspection process have not been carried out seriously; the calculation of taxes for taxpayers processed through inspections has been delayed; the processing of files is slow, accounting for 20%, and 61% of files are overdue by one year without timely inspection, prevention, correction, or handling.
Secondly, the results of the invoice verification revealed that 13 businesses used invoices that did not qualify for tax refunds. The reconciliation of outstanding debts was not frequent, and the data reflected the debt inaccurately. The audit results as of September 30, 2014, showed a total tax debt and late payment penalties of 161 billion VND. Notably, the tax authorities monitored and managed 844 cases that reported no outstanding debt at that time, with a total late payment penalty of 19,4 billion VND.
Thirdly, the Government Inspectorate also pointed out that tax debt in Ho Chi Minh City is increasing annually, especially debts overdue for more than 90 days, but the Ho Chi Minh City Tax Department has not fulfilled its responsibilities and lacked coercive measures to recover tax debts, such as not applying coercive measures or freezing funds from the accounts of 25 businesses.
The failure to apply other tax debt enforcement measures to 82 businesses has resulted in the tax amount not decreasing but increasing, especially those tax debts overdue for more than 90 days as of September 30, 2014, totaling 10,6 billion VND, accounting for 60% of the total tax debt.
The Government Inspectorate also pointed out that the widespread use of invoices from businesses that have absconded is becoming increasingly complex and prominent, causing significant revenue losses for the state budget. Specifically, inspections and verifications of 44 businesses (buyers) revealed the use of illegal invoices and invoices that did not meet the conditions for tax deduction.
See more: The director and accountant evaded taxes.
2. We request that the Prime Minister direct the Ministry of Public Security to take action.
In light of the violations and shortcomings of the Ho Chi Minh City Tax Department, the Government Inspectorate recommends that the Prime Minister direct the Ministry of Finance to supplement regulations on tax valuation for sales to commercial enterprises with parent-subsidiary or affiliated company relationships, ensuring the true nature of the economic relationship.
We propose that the General Department of Taxation implement tax management measures and conduct inspections and audits of business activities such as related-party transactions and capital transfers.
The Ho Chi Minh City Tax Department is directed to review and promptly and seriously handle illegal invoices as notified by the police, and to forward them to the police for investigation and prosecution if criminal violations are found, in accordance with the law.
Clarify the responsibilities for review and take appropriate disciplinary action against the leaders of the Ho Chi Minh City Tax Department involved in the shortcomings, while also clarifying the causes and responsibilities of each organization and individual leader for the deficiencies, and imposing strict penalties in accordance with the law.
Regarding economic sanctions, the Government Inspectorate recommended that the Ho Chi Minh City People's Committee direct the Ho Chi Minh City Tax Department to collect back taxes and remit to the state budget 113,1 billion VND from 60 violating enterprises. They also recommended collecting back taxes from 844 cases, with an underpayment of late payment penalties totaling 19,4 billion VND. Furthermore, they recommended collecting back taxes and remit to the state budget 2,1 billion VND from 21.377 cases with underpayment of late payment penalties discovered through tax audits and inspections.
For 10 organizations and 638 households with overdue land tax debts, the Ho Chi Minh City Tax Department is required to expedite debt collection and enforce collection totaling 100,7 billion VND. Regarding 9.116 businesses that used invoices purchased from businesses that have absconded, with a total value of goods and services amounting to 3.537 billion VND, as discovered by the Government Inspectorate, the Ho Chi Minh City Tax Department is required to conduct a full investigation of the information on these businesses, verify and handle the cases according to its authority, and recover the funds for the state budget.
Furthermore, the Government Inspectorate recommended that the General Department of Taxation and the General Department of Police (Ministry of Public Security) investigate, verify, and handle, in accordance with the law, 18 businesses that purchased invoices from the swindler, with a total value of goods and services amounting to 201 billion VND. The Government Inspectorate also requested the Ho Chi Minh City Tax Department to transfer the files to the police for investigation, verification, and handling in accordance with the law regarding tax evasion cases causing losses to the state budget. www.expertis.vn
