Duxton Saigon in a pickle

Vinametric, owner of the Ho Chi Minh City-based hotel finds itself deep in debt as local officials have demanded the company transfer all of its bank deposits to the state treasury to collect unpaid taxes.

According to Ho Chi Minh City’s Tax Agency, Vinametric owes VND110.4 billion ($5.3 million) in back taxes, including a VND68.7 billion ($3.3 million) late payment penalty for 2006-2009. Most of the unpaid taxes relate to an electronic gaming business which Duxton Saigon Hotel already closed in 2010.

In early December, 2011 the tax agency clamped down on the Singaporean company and forced it to start transferring bank deposits to the state treasury. Duxton Saigon Hotel director Dang Di Nghia confirmed its situation to VIR, but declined to comment further.

In a document sent by Duxton Saigon Hotel to the ministries of Finance, Planning and Investment and Justice, the hotel claims the tax agency had brought it to the brink of bankruptcy. “The amount owed in back taxes plus the late payment penalty is more than the company can pay,” said the company in its document.

By March 19, 2012, the tax agency had issued three decisions in an attempt to collect VND45 billion ($2.1 million). A fourth decision is expected soon. The 198-room Duxton Saigon Hotel is one of the most luxurious hotels in Vietnam’s largest city. Since February 2012, Duxton Saigon Hotel has not paid for many of its staff and it collectively owes them about VND4 billion ($192,000) in salary, bonuses and insurance, according to the document.  Meanwhile, the hotel owes 187 suppliers, including Coca-Cola Vietnam, PepsiCo Vietnam, Metro Cash&Carry and Phu Thai Group, with a sum amounting to about VND11 billion ($528,000).

If Duxton Saigon Hotel must continue to pay its back taxes in this manner, it would become insolvent, the document said.n