Four-star Duxton Hotel Saigon has spotted a small road to escape bankruptcy.
The Ministry of Finance (MoF) has ordered Ho Chi Minh City Tax Office to temporarily stop forcing the hotel owner to transfer all its small bank deposits to the State Treasury to pay a giant tax bill.
The move is an 11th hour reprieve for Vinametric Company, a wholly-owned subsidiary of Singapore's Low Keng Huat Company and also the owner of Duxton Hotel Saigon.
The order follows a Vinametric's document asking for the MoF's help after the Ho Chi Minh City Tax Office asked the company to transfer all its bank deposits to the State Treasury in order to collect VND110.4 billion ($5.3 million) in tax arrears, including a VND68.7 billion ($3.3 million) late payment penalty during 2006-2009.
The sum relates to a management fee to run an electronic gaming business. Duxton Hotel Saigon stopped this business in 2010 after allowing Vietnamese enter the facility, violating electronic gaming legal regulations.
"This is a positive sign for us at this time. At least, it helps us continue maintaining the operation of the hotel until the ministry issues a new decision," said Dang Di Nghia, general director of Duxton Hotel Saigon.
The 198-room Duxton Hotel Saigon is one of the most luxurious hotels in Vietnam's largest city. But, Nghia said the tax office's decision would be a killer blow for the firm.
Till April 17, the tax office collected VND56 billion ($2.6 million) from the company's bank deposits, Nghia said.
"The entire hotel's income was transferred to the State Treasury. We don't have any money to pay suppliers and staffs salaries," he added.
At present, Nghia said Duxton Hotel Saigon owned 187 suppliers, including Coca-Cola Vietnam, PepsiCo Vietnam, Metro Cash & Carry and the Phu Thai Group, about VND14 billion ($673,000).