Tax dodgers heavily tax the state’s coffers

Customs staff have an uphill battle nailing down tax dodgers

Figures released last week by the General Department of Police under the Ministry of Public Security indicated that from 2005 to 2007, the Economic Police, in coordination with Tax and Customs agencies, uncovered 720 cases that involved generating fake invoices.
“Total damage to the state budget amounted to VND546.3 billion ($34 million) of which VND200 billion ($12.5 million) was recovered for the state,” the police report stated.
The report also stated that only 26.7 per cent of the 720 uncovered cases were brought to the criminal court, while another 53.9 per cent were only settled under administrative form. The rest remain unsolved because violators had disappeared.
Pham Duy Khuong, deputy head of the General Department of Taxation (GDT), said that offenders appeared in almost all provinces and cities. In cases where firms had generated fraudulent invoices to take advantage of tax breaks, the state had already refunded large amounts of tax.
The GDT’s figures illustrated that between 2003 to 2007, the Ho Chi Minh City Taxation Department, in coordination with the economic police in Ho Chi Minh City, unveiled 6,809 enterprises had disappeared from their operating address.
The GDT’s figures also indicated within just four years from 2004 to 2007 the Hanoi Taxation Department, in coordination with the Economic Police in Hanoi, disclosed that 6,710 enterprises had disappeared from their company address.
Khuong said that perpetrators of this crime mainly appeared in Ho Chi Minh City, Hanoi, Can Tho, Haiphong, Tien Giang, Vinh Long, An Giang, Kien Giang and Ha Tay.
Vu Ngoc Anh, deputy head of the General Department of Customs, said that the violators used sophisticated techniques and their tricks were difficult to discover.
“When the customs staff examine and inspect invoices from violators, these [actually] show input and output materials and commodities, signatures of economic contracts, transfer of money, so it is difficult to charge against them” he said.
He added that the coordination amongst police, customs and tax departments should be improved especially given the liberalisation of Vietnam market in alignment with World Trade Oraganization conditions.
He said enterprises had purchased and sold invoices to dodge tax amounting to VND50 million ($3,100) each, but there had been no settlement in either criminal or administrative courts.
Ninh said addressing tax avoidance was a priority for the state and tax debts from enterprises were severe problems that the GDT needs to settle.
He said that it was estimated that tax debts at present amounted to around VND1,500 billion ($94 million) and this money was difficult to recover.