Property developers run into some taxing problems

The Ministry of Finance’s (MoF) General Department of Tax reported that the city-based property firms’ debts totaled nearly VND1 trillion ($48 million).

Those big debtors include Vietnam Housing and Urban Development Group (HUD) with nearly VND400 billion ($19.2 million) in the red, Hanoi General Import Export Corporation (Geleximco) VND220 billion ($10.5 million), Vietnam International Township Development Joint Stock Company VND152 billion ($7.3 million) and Nam Cuong Trade and Service Company VND69 billion ($3.31 million).

Cao Anh Tuan, vice head of the General Department of Tax, ascribed the firms’ debts to cash shortages caused by the property market’s standstill.

Trinh Hoang Co, head of the MoF’s Debt Management and Tax Coercive Department, said many property developers could not fulfill their tax obligations and their tax debts were huge. He noted that the debt of non-state firms accounted for 58.8 per cent of the total  tax debts.

Nguyen Thi Cuc, chairwoman of Vietnam Tax Advisory Association, said it was hard for property firms to pay taxes and fines, but  firms could not use economic difficulties as an excuse to delay tax payments. She said firms had employed many devious ways to evade tax obligations.

She said, in order to shun taxes, firms would report low product prices, while the real value of these products was far higher. They also would use cheap-price materials to construct property projects to lower the value of their products. Besides, they also often established subsidiaries or cooperated with other firms to shun tax payments.

Tuan said to fight tax evasion, the tax sector would this year boost inspections of financing, banking and property sectors. Particularly, the inspections would be launched for all transactions with transfer pricing suspicions.