Vietnamese authorities to crack down on tax evasion

HCM City - Vietnamese authorities will crack down on tax evasion by implementing strict measures to ensure individuals and businesses fulfill their tax payment obligations.

Minister of Finance Ho Duc Phoc has issued an official dispatch proposing that "those who have outstanding tax debts will not be allowed to leave the country until their debts are settled."

The government is focused on recovering tax debts, particularly in land use and lease taxes, to maintain state budget revenue, he said.

“To address the increasing tax debt issue, timely enforcement measures are needed,” he said.

In order to facilitate debt recovery, the tax authority will publicise information about negligent taxpayers in the media and work closely with other agencies to effectively enforce tax laws.

In addition, a steering committee has been established at the local level to determine recovery measures for taxpayers with large debts.

Experts attribute the rise in tax debt to multiple factors such as global economic uncertainties, political instability, and natural disasters, leading to financial challenges for individuals and businesses.

As of the end of last year, the total amount of debt managed by the tax authority was nearly 164 trillion VND, up nearly 11% year-on-year.

Previously, the authorities had banned the chairman of Trung Nam Group, a major hydroelectricity and renewable energy producer, from leaving the country due to its tax debts of 21 billion VND (840,000 USD).

High-income earners targeted

The General Department of Taxation is also urging individuals earning income through international e-commerce and social media platforms to fulfill their tax obligations.

High-income individuals in such sectors as marketing, IT, service industries, digital commerce, and social media have been found to owe billions of Vietnamese dong in taxes.

Tax authorities in Hanoi have identified more than 460 individuals with significant earnings from these platforms, with more to be added to the list.

In Ho Chi Minh City, the authorities are also reaching out to users of Google, Facebook, and YouTube who have not reported income or paid taxes.

Those on the list may face fines in addition to back taxes for their attempts at evading taxes.

Numerous YouTubers have already been told to pay substantial amounts in income tax and penalties for their failure to disclose earnings in previous years.

There have been various economic ups and downs in the post-pandemic era that have necessitated decisive measures to sustain growth. Despite an improvement in the third quarter of the year, Vietnam's economy still faces a number of obstacles to achieve its targets.

Lingering woes in domestic production have sparked a need for new or extended policies to fuel enterprises, regardless of state budget revenue dents.

Vietnam has been emerging as a significant player in the global semiconductor industry and aimed to become a key market for large-scale chip production. However, the country faces an intense competition from regional and global rivals such as South Korea, Malaysia, and Thailand, each offering attractive incentives to lure semiconductor investments.