On January 10, 2020, a dossier about Xuyen Viet Oil Travel and Transport Trading Co Ltd was transferred from the District 3 Sub-department of Taxation to the HCM City Department of Taxation for management. The tax debt monitoring book showed that as of January 2020, Xuyen Viet owed VND89.57 billion in environmental protection tax to the state.

But just three years later, the amount of tax owed by the company had soared by 20 times. By August 2023, it owed VND1.528 trillion, including VND1.244 trillion in environmental protection tax.

Hai Ha Waterway Transport Co Ltd is another big debtor. To date, it owes VND1.7 trillion in tax, including VND815 billion in 2021 and VND761 billion in 2020.

The biannual financial report of Nam Song Hau Trading Investing Petroleum JSC showed that by the end of the second quarter 2023, it owed VND1.506 trillion in tax and other payables to the state, which was higher than the stockholder equity of VND1.262 trillion. 

In the case of Hai Ha, the General Department of Taxation (GDT) released documents urging Thai Binh Sub-department of Taxation to apply coercive measures to collect tax arrears from the debtor. Three documents have been released this year alone, in March and May.

The taxation body has applied coercive measures to collect unpaid debts by extracting money from the company’s account and blocking the account in accordance with six decisions, released from June 26 to August 28.

Another measure stopped the use of the enterprise’s invoices as per a Decision dated September 12, which took effect from September 13, 2023 to September 12, 2024.

On August 30, the Thai Binh Sub-department of Taxation sent a document to the Vietnam Immigration Department under the Ministry of Public Security, requesting a temporary exit ban on Hai Ha’s legal representative Tran Tuyet Mai.

High risk

The environmental protection tax debt is a common problem of many petroleum distribution companies.

Ninh Binh tax agency applied drastic measures, including decisions on stopping the use of invoices and suspending its executives’ exit, to deal with the debt worth VND203 billion incurred by Trung Linh Phat Co Ltd.

In March 2023, MSB released a notice on foreclosing the assets of Trung Linh Phat mortgaged before for loans, including 23 real estate projects.

On August 10, Tan Binh district Sub-department of Taxation sent a document to 63 local tax agencies with warnings about Trung Linh Phat’s unpaid tax debts. The dossier of the enterprise has been transferred to the police.

Tax officers have found problems in the company’s operation, including the circular sale of petroleum products between enterprises. A report provided by Trung Linh Phat showed that 11 businesses were both sellers and buyers of Trung Linh Phat Co HCM City Branch.

They also found that Trung Linh Phat used VAT invoices issued by six enterprises which no longer operate at the registered addresses and dissolved their businesses.

The General Department of Taxation (GDT) has named 22 cities or provinces which have the highest numbers of tax debtors, including Hai Phong, Dong Nai and HCMC. 

As some taxation agencies were slow in applying coercive measures stipulated in the Law on Tax Management and legal documents, on March 13, GDT released Dispatch 689 on measures to collect tax arrears from petroleum traders.

On May 30, GDT once again requested local taxation agencies to deal with debtors with a heavy hand.

A question has been raised about the state agencies’ responsibility of monitoring petroleum companies’ operations after licensing.

While petroleum companies were still owing tax, in October 2022, the Ministry of Industry and Trade (MOIT) asked the Ministry of Finance (MOF) to help these firms solve their problems.

It also requested MOF to instruct the General Department of Customs to create favorable conditions for Hai Ha, Nam Song Hau, Xuyen Viet Oil and Dong Thap Petroleum to get customs clearance for their imports. However, the request was rejected.