Recently, efforts to strengthen budget management have led to increased measures to recover tax debts. This has resulted in a growing number of business leaders being temporarily banned from leaving the country, even for very small amounts of tax debt, under VND1 million (less than $50).

According to Thanh Nien Newspaper, at the end of May, the Customs Department of Saigon Port Zone 4 (Ho Chi Minh City Customs Department) sent five notices to the Immigration Department, requesting a temporary travel ban for several business leaders with tax debts. Among them was Ms. L.H.B, Chairwoman and Director of G.T Chemical Trading Co., Ltd. in Binh Duong Province, who was recommended for a temporary travel ban from May 18 due to her company's tax debt of 997,222 VND.

According to An Ninh Thu Do Newspaper, several other business leaders have also been banned from leaving the country due to tax debts. This includes Mr. T.T.Q, Director of Ngoc Dieu Construction Trading Service Co., Ltd., whose company owed just over 10 million VND, and Mr. D.H.S, Chairman of Saigon Indochina Wood Co., Ltd., who was banned from May 18 due to a tax debt of over 61 million VND. In February, a director of a company in Ho Chi Minh City was also banned for a tax debt of 1.1 million VND, excluding late payment penalties.

Temporary travel ban as a tough measure

Banning individuals from leaving the country due to tax debts has been practiced for several years. However, the issue has gained attention recently as many business leaders with tax debts have been publicly named on local customs websites.

While many believe the regulation is necessary, it is viewed as somewhat rigid. Among those with tax debts, many face financial difficulties, and some are unaware of their tax debts. Banning individuals from leaving the country for debts of just a few hundred thousand VND is seen as disproportionate.

Some suggest clearer regulations are needed, such as increasing the threshold of tax debt that warrants a travel ban. No business would evade a debt of a few hundred thousand VND. Alternatively, tax authorities should notify individuals about their debts and the deadline for payment to avoid a travel ban.

Discussing the issue, lawyer Nguyen Quoc Toan, Director of IAM Law Firm (Ho Chi Minh City), told Thanh Nien Newspaper that any tax debt, even as little as 1 VND, is a violation. Individuals or businesses with overdue tax debts are subject to legal regulations regardless of the amount. Tax law does not differentiate between the rich and the poor; it concerns the fact of being overdue.

Assoc. Prof. Dr. Dinh Trong Thinh (Academy of Finance) told the media that current law does not specify the amount of tax debt that triggers a travel ban. To ensure the law's integrity, individuals with any amount of overdue tax debt, large or small, can be temporarily banned from leaving the country.

Meanwhile, tax expert Nguyen Van Duoc told the Financial Market that the travel ban for tax debts is regulated under the Law on Tax Administration. A tax debt of less than 1 million VND is very small compared to the operations and capital scale of a business. Therefore, citing financial difficulties as a reason for not paying such a small amount is unreasonable and shows signs of procrastination.

Lawyer Nguyen Thanh Ha, Chairman of SB Law Firm, shared with Vietnambiz that tax authorities should propose a threshold for tax debt when applying the travel ban, such as an individual owing more than 100 million VND or a business owing more than 1 billion VND.

In early June, the Ministry of Finance issued a statement noting that the number of taxpayers with tax debts under 1 million VND is very large, and most of these debts have been long overdue. For temporary travel bans, tax authorities conduct reviews, verify, and accurately determine the tax obligations of taxpayers before sending notices to the Immigration Department and the taxpayer, allowing them to fulfill their tax obligations before leaving the country.

"To enhance taxpayer compliance, the temporary travel ban is a tough measure and a warning to taxpayers with tax debts to ensure the completion of tax obligations to the state budget," the Ministry of Finance's statement emphasized.

In a recent interview with VietNamNet, Mr. Ngo Van Thuan, Deputy Director of Quang Binh Province Tax Department, said that the tax authority's recommendation for a travel ban does not depend on the amount of debt owed. Some entities with large debts but stable operations and low risk may not be recommended for a travel ban, while smaller-debt entities with high-risk factors may be recommended for a temporary travel ban on their legal representatives.

Hanh Nguyen