The ministry has asked the local tax departments to make public the names of firms owing tax, hasten the collection of arrears and use coercive measures, if necessary. — Photo hanoimoi

HA NOI (Biz Hub) — The Ministry of Finance has officially made public the names of 600 companies that had accrued tax arrears till June end.

The ministry has asked the local tax watchdogs to expedite collection of these arrears in line with the Law on Tax Management.

The list of firms includes those with large tax arrears and firms that have not paid their arrears more than 121 days after the payment was due.

The 600 companies have combined tax arrears of VND12.658 trillion (US$586.64 million).

Among the 63 provinces and cities, Ha Noi and HCM City are the two cities with the largest number of firms, 200 each, named in the list. Collectively, these firms owe combined tax arrears of VND4.672 trillion ($214.3 million) and VND3.517 trillion ($161.3 million), respectively.

The ministry has asked the local tax departments to make public the names of firms owing tax, hasten the collection of arrears and use coercive measures, if necessary.

According to the tax management law, money can be deducted from the firms' bank accounts to pay tax arrears, banks can be asked to freeze their accounts, and their invoices can be invalidated as part of the coercive measures.

Reports on the collection of tax arrears have to be submitted to the ministry by the end of this month.

The ministry said the names of firms with long overdue tax arrears had been announced in order to be fair with firms that paid taxes on time, and to enhance transparency in the business climate.

The General Department of Taxation had said earlier that large tax arrears were the result of an economic downturn in the past that had hit businesses hard.

Name and shame

Fifteen of the 38 property investors in Ha Noi with combined dues of VND2.267 trillion ($103.9 million) in land use fees have paid all or part of their arrears after their names were made public.

However, the payment, totalling VND219 billion ($10 million) as of mid July, was modest, accounting for only 9.6 per cent of the overdue fees. Earlier, names of all 38 investors were made public.

According to lawyer Pham Van Truong, Director of Thien Quang and Associates Law Firm, the delayed payment of land use fee, totalling billions of Vietnamese dong, by property developers would have a negative impact on the budget's revenue and also on the development of the property market.

In addition, it would be difficult for home buyers to obtain home ownership certificates unless the developers pay their arrears, Truong said.

To date, the developers of only three property projects have paid all their tax dues, while many others are seeking further deferrals.

Nguyen Thi Hai Yen from the Ha Noi Tax Department said investors who had not paid their overdue land use fees would have to pay a fine at the rate of 0.05 per cent of their arrears per day. Further coercive measures could be applied if necessary, including revocation of the projects.

Home buyers should not buy apartments from investors who had not fulfilled their financial obligations to the state, as the first risk it poses was that they would not be granted home ownership certificates, Yen said.

According to Le Thanh Nam from the municipal Department of Natural Resources and Environment, 35 property projects in the city still have financial problems.

As per Decision 327, home ownership certificates will not be granted to the buyers in projects which were implemented after 2013 but where overdue land use fees have not been paid.

Making public the names of property investors who had not paid their overdue land use fees will give home buyers more information to help make their purchase decision.

The Deputy Director of the Ha Noi Department of Taxation said publicising the names of firms with tax arrears was considered an effective way of collecting tax dues.

"The department of taxation will continue to check and publicise the names of firms with tax arrears until the year-end," he said, adding that if needed, coercive measures would be applied to collect the tax dues. — VNS