The recent case of Luong Hoai Nam, CEO of Bamboo Airways, being barred from leaving the country over his company’s tax debts has ignited a debate about the use of exit bans as a tool for recovering unpaid taxes.
While many agree that strict measures are necessary for companies that refuse to pay, some business owners argue that applying exit bans for small debts is excessive.
On September 20, Phan Ba Quan, director of Phuc Thinh Digital, was surprised to learn that he had been placed on a temporary exit ban due to a tax debt of just 2.8 million VND ($115).
“It was the first time I received such a notice, and I didn’t even realize we had an outstanding debt,” Quan said. Due to a recent business relocation and a staff turnover, the tax was inadvertently delayed.
Like Quan, many other business owners have found themselves in similar situations. Nguyen Thi Huong, director of Xuan Huong Company, also faced an exit ban on September 12 due to an 8.6 million VND ($350) tax debt.
In another instance, Nguyen Van Cuong, head of a real estate company in Vinh City, was equally shocked to discover that his company had been placed under an exit ban despite ceasing operations.
“I thought we had filed all the paperwork to suspend the company, and we haven’t been operating due to the pandemic. I didn’t even know there was a tax issue,” he said.
Frustration among business owners
For many entrepreneurs, the exit ban adds insult to injury. Some argue that the process is unnecessarily harsh, especially when the debts in question are relatively small or tied to disputes over government fees.
“Yes, we owe taxes,” said an entrepreneur from Ho Chi Minh City, “but the debt relates to a land use fee that we’re still negotiating with local authorities. The moment this issue hit the press, everyone just assumed we were dodging taxes.”
He explained that while exit bans might be necessary for businesses that willfully refuse to pay, they can be punishing for those caught up in legitimate bureaucratic or financial challenges. “Nobody wants to be in this position. We’ve invested our livelihoods in these businesses.”
Other business owners echoed similar concerns. A business representative from Binh Duong said, “My company owes taxes, but we’re also waiting on a tax refund that’s been delayed. We’ve even asked to offset our debt against the refund, but that hasn’t been accepted.”
The broader debate
The use of exit bans as a method of enforcing tax payments is becoming increasingly common, with some cases involving prominent business leaders like Bamboo Airways CEO Luong Hoai Nam. While the airline’s unpaid taxes were acknowledged, Nam expressed frustration, emphasizing that the matter was administrative and not personal.
“I understand the importance of fulfilling tax obligations, but we’re working with authorities to resolve the issue amid our company’s financial struggles,” Nam said.
For some business owners, the exit ban represents a double-edged sword. On the one hand, it serves as a wake-up call to resolve outstanding debts. On the other, it can be perceived as a heavy-handed approach that punishes business leaders who are already facing financial hardship.
“I just took over this company, and I inherited a massive tax debt from the previous owners,” said a CEO from Binh Duong, who fears he could soon face an exit ban. “I’m trying my best to fix the situation, but it feels unjust that I might be punished for something I didn’t cause.”
Many business owners believe that while exit bans can be effective in some cases, they should be applied more judiciously, especially in instances where debts are minimal or contested.
“We need a more balanced approach,” said one business owner. “If a company is clearly avoiding taxes, then by all means, impose a ban. But for those of us who are working through these issues in good faith, there should be a more reasonable solution.”
Dieu Thuy – Binh Minh – Luong Bang
Vietnamnet.vn
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