Business owners who owe taxes will be barred from forming a new corporation

DNHN - The legality that says that legal entities that are subjects of enterprises that owe tax will not be permitted to incorporate new companies is one of the main items in the process of completing the General Department of Taxation's tax arrears collection.

Speaking at the Vietnam Chamber of Commerce and Industry (VCCI) seminar "E-invoices following Decree 123/2020 and Circular No. 78/2021: Things Businesses Need to Know When Applying," held on the morning of May 27, Mr Nguyen Van Phung, Director of Large Corporate Tax Administration of the General Department of Taxation (Ministry of Finance), said: "To strengthen the tax administration system for people and enterprises, the General Department of Taxation is now cooperating with the Ministry of Public Security on exchanging registration information via citizen identity code (CCCD)."

When this operation is done, each individual will have only one identification number and a set tax code will be maintained on the authorities' data system, assisting in tightening tax administration.

Many business owners in the past were sluggish to pay taxes, owing taxes for an extended period, or filed for firm dissolution or bankruptcy. However, only a short time later, these individuals registered to open a new firm under a different name and conduct normal operations. This action is mostly intended to avoid paying taxes to the state.

As a result, tens of thousands of enterprises owe taxes and cease operations, posing a problem for tax officials.

To address the aforementioned scenario, the General Department of Taxation performed a search based on personal identifying information, and business owners who owe taxes will not be granted a new corporate tax code and will not be permitted to start a firm.

However, because consequences and management mechanisms are insufficiently severe, this conduct has not been tightened over time.

There is no "ambiguity" between the ideas of small business and domestic business. Many people continue to discover ways to "elude" tax officials by enrolling on both categories at the same time.

As a result, there was a huge loss of budget money. As a result, this is another item that has to be addressed in the plan for completing tax control in the future years.

Mr Phung stated: "Things will be different in three years, and all of the above will have to fit inside the framework. It's only a matter of whether the tax office is determined to do it or not. The Legislation on Enterprises will be updated shortly, and this clause will be placed in the law to make it tougher."

Ha Anh