Recent media reports indicate that border-gate customs in a city sent a dispatch requesting the local Business Registration Office under the Department of Finance to revoke the business registration certificate of a company owing nearly VND6.3 billion in overdue taxes. The document even demanded that the registration agency “issue a business license revocation decision or explain the reason for not doing so within 10 days.”

If the draft amended Law on Tax Administration currently under public consultation by the Ministry of Finance is passed, this will no longer be an isolated case. The draft law includes a provision allowing tax authorities to “request suspension of business registration” when handling tax violations.

The right to do business is a constitutional boundary that must not be crossed

Nguyen Dinh Cung, former Director of the Central Institute for Economic Management, asserted that granting tax authorities the power to “request the suspension of business registration” violates the right to do business guaranteed by the 2013 Constitution which says “Everyone has the right to do business in fields not prohibited by law.”

He raises a critical question: “Don’t they realize the consequences of revoking a business registration? Taxes won’t be collected, banks lose capital, workers lose jobs, and the entire economy suffers.”

The essence of business registration is to recognize the fundamental rights of individuals and enterprises, not to issue a license that can be arbitrarily withdrawn. If the draft becomes law, tax authorities would act as both “tax collectors” and “judges,” with the power to shut down businesses at will. This is a dangerous overlap of authority that undermines the rule of law.

The Party’s Resolution 68 clearly states that institutional reforms need to remove barriers, reduce compliance costs, and nurture businesses, especially in the private economic sector which is the key driver of the economy. The mindset of “if it’s hard to collect, ban it; if it’s hard to manage, stop it” creates more administrative obstacles, pushing businesses out of the market.

Legal perspective

In Vietnam, the right to free enterprise is clearly stipulated in the Constitution and fundamental laws. Restricting this right can only be done through legislation and only in extreme cases, such as money laundering, terrorism financing, or large-scale criminal fraud.

Tax and customs agencies have the power to collect taxes and seize assets but lack the authority to directly interfere with business registration, which falls under the purview of registration agencies or commercial courts. Granting tax authorities the additional power to “suspend registration” would create jurisdictional conflicts and distort the principle of separation and coordination of powers.

Economic perspective 

Businesses can only pay taxes if they remain operational, producing goods and generating revenue. Forcing a business to suspend its registration effectively shuts down factories, halts cash flow, and pushes enterprises into insolvency. Aiming to collect taxes by eliminating the very source of tax revenue is a clear paradox.

The impact extends beyond a single business. The state budget loses revenue, banks face bad debts, and workers lose jobs. A single administrative decision can turn a company’s financial difficulties into a broader societal burden.

Public governance perspective: the principle of “due process” 

A modern governance system does not allow an administrative agency to act as tax collector, judge, and punisher simultaneously. The principle of “due process” requires that business registration suspension or revocation only occur after a court or independent adjudicative body’s ruling, with the business given the right to appeal or defend itself.

In practice, tax authorities already have sufficient enforcement tools: account deductions, asset seizures and cargo holds at ports. There’s no need for the additional power to “suspend business registration,” which is prone to abuse. 

Let businesses survive to sustain stable sources of revenue

To collect taxes, businesses must be allowed to operate, generate revenue, and contribute to the state budget. Shutting down businesses only leads to losses for all parties: the state loses revenue, banks lose capital, and workers lose jobs.

The right approach is to strictly apply existing enforcement tools, ensure transparent procedures, and create conditions for businesses to recover. Only then can tax authorities collect debts for the state budget while fostering economic growth.

Currently, tax debts have reached VND240,000 billion. How many businesses would face “business registration suspension” if tax and customs authorities are granted this power?

The answer lies in the spirit of reform outlined in the 2013 Constitution and Resolution 68: governance must be lawful, role-appropriate, and protective of national interests, rather than creating additional barriers and risks for businesses.

Tu Giang