Experts said erasing uncollectible tax arrears was necessary but transparency must be ensured throughout the process to prevent losses to the State budget.

The Ministry of Finance proposed a sum of more than VND27.7 trillion (US$1.2 billion) of tax arrears classified uncollectable to be erased. — Photo phatluatxahoi.vn

In a draft National Assembly resolution about handling uncollectible tax debts which was recently published for comments, the Ministry of Finance proposed a sum of more than VND27.7 trillion (US$1.2 billion) of tax arrears to be erased.

The finance ministry said that erasing uncollectible tax debts would help ease the burden on tax management agencies and reduce costs for the Government. The deletion of tax debts also helped provide a more accurate figures for developing State budget revenue and spending plans and other macro-economic indicators.

According to Deputy General Director of the General Department of Taxation Phi Van Tuan, tax debts classified uncollectible were sums owned by taxpayers who were dead, lost or incapable of civil acts. The uncollectible debts also included enterprises that had been dissolved or declared bankrupt but did not implement dissolution or bankruptcy procedures as regulated.

Nguyen Duc Hai, Chairman of the National Assembly’s Finance and Budget Committee, said that there was a lack of detailed regulations about how to handle tax arrears, especially uncollectible sums.

For many years, uncollectible tax debts caused a lot of difficulty for management, Nguyen Thi Van Chi, a member of the committee said, adding that it was necessary to erase uncollectible sums, so tax management agencies could focus on other tasks rather than spending time chasing the debts.

However, transparency was critical in eliminating uncollectible tax debts to ensure the policy is used on the right subjects and prevents losses to the State budget.

Another member of the committee Vu Thi Luu Mai, said that tight regulations were needed to ensure transparency and fairness in the deletion of uncollectible tax debts. She added that the supervision on the deletion of uncollectible tax debts must also be enhanced.

The Ministry of Finance’s report showed that as of the end of 2017, tax debts totalled nearly VND78.5 trillion, 2.8 per cent lower than December 31, 2016. Uncollectible tax debts were estimated to total nearly VND31.5 trillion. — VNS