Tighten groups abandoning business addresses, still owing taxes
In the draft decree guiding the implementation of a number of articles of the Law on Tax Administration, the Ministry of Finance proposed to supplement regulations on temporary suspension of exit for business individuals, business households, owners benefiting from enterprises according to the provisions of the Enterprise Law, legal representatives of enterprises, cooperatives, and cooperative unions if they no longer operate at the registered address and have a tax debt of 1 million VND or more.
This measure is applied 30 days after the tax authority notifies that the taxpayer has not yet fulfilled the obligation.
According to the Ministry of Finance, there are currently nearly 1 million taxpayers who do not operate at registered addresses but still owe taxes, with a total debt of 32,130 billion VND. Of which, businesses owe more than 29,800 billion VND, and business households owe more than 2,310 billion VND. Notably, nearly 500,000 taxpayers owe less than 1 million VND but the total amount is only about 66 billion VND.
To date, about 65,000 taxpayers have been temporarily suspended from leaving the country; of which more than 7,100 people have contacted tax authorities to pay money and this measure has been cancelled. The number of taxpayers with debts under 1 million VND who are being temporarily suspended from leaving the country is 13,500 people, including 11,800 businesses and 1,700 business households.
Risk stratification is needed
Assessing the new proposal of the Ministry of Finance, Mr. Mac Quoc Anh - Vice Chairman cum General Secretary of the Hanoi Association of Small and Medium Enterprises said that tightening management for taxpayers who no longer operate at registered addresses is well-founded. This is a high-risk group in tax management because when taxpayers have left the registered address, tax authorities find it difficult to contact, difficult to verify actual operations, difficult to recover debts and there is a risk of developing a situation of abandoning business addresses, ghost businesses, using illegal invoices or leaving tax obligations and then disappearing.
However, Mr. Mac Quoc Anh said that the debt level of 1 million VND is very low if immediately linked to temporary exit suspension measures. According to him, temporary exit suspension is not only a measure to recover tax debt but also directly affects the right to travel, commercial activities, work, signing contracts, study, medical treatment, and visiting relatives of individuals. Therefore, policies must ensure three principles: being the right subjects, commensurate with the level of violations, and having a mechanism to protect good-hearted taxpayers.
Mr. Quoc Anh cited the current regulations in Decree 49/2025/ND-CP, according to which in cases where business individuals and business households are subject to enforcement of administrative decisions on taxes, the threshold is from 50 million VND and overdue for more than 120 days; for legal representatives of enterprises, cooperatives, and cooperative unions, it is from 500 million VND and overdue for more than 120 days.
The group that no longer operates at the registered address is regulated in the direction that it has expired and after 30 days of notification but has not completed its obligations. Therefore, according to him, when proposing the level of 1 million VND, the drafting agency needs to clearly explain that this is not equating with people who are operating normally, but is a mechanism to control groups with high risk signs.
This proposal should not be completely rejected, but the level of 1 million VND should not be mechanically applied as an absolute threshold," Mr. Mac Quoc Anh stated his opinion.
According to him, if the debtor owes 1 million VND but the taxpayer intentionally abandons the address, does not respond, does not explain, shows signs of embezzlement, uses illegal invoices, establishes a business and then abandons tax obligations, then the State needs to have strong tools. But if it is a small business household that has moved locations to rent premises without updating information; the individual does not know there is still a small debt; error is due to the system, due to accounting or procedures for dissolution, termination of tax identification number are not completed, then immediately applying temporary exit suspension measures will easily create a feeling of being too heavy.
From there, he proposed that the policy should be designed in the direction of risk stratification. For small debts from 1 million VND to less than 5 million VND, priority should be given to warnings, debt reminders, information updates, and permission to explain and pay immediately via eTax or VNeID. For debts from 5 million VND or more, overdue for a sufficiently long time and have been notified many times but no response, stronger measures can be considered. For cases of signs of absconding, establishing ghost businesses, buying and selling invoices, appropriating tax money or intentionally evading obligations, a strict control mechanism can be applied immediately without necessarily just looking at the amount of money.
In other words, 1 million VND may be a management warning threshold, but it should not be the only threshold for temporary exit suspension. Tax policies must be strict to protect budget discipline, but also must be fair so as not to turn a small debt, sometimes due to technical errors or lack of information, into a major barrier to people's right to travel and legitimate business activities," Mr. Mac Quoc Anh emphasized.
