Departure suspension (regulated in the 2019 Tax Administration Law and Decree 126/2020), applied from 2023, is one of the effective tools in encouraging individuals and businesses to fulfill their tax obligations.
This measure is not new because in the world, many countries such as China, Malaysia, the US... also apply similar policies to collect tax debts.
Statistics from the General Department of Taxation show that since the beginning of the year, there have been more than 6,500 cases of temporary suspension of exit due to tax debt, 3 times higher than last year.
And thanks to the exit suspension measure, the tax authority recovered 1,341 billion VND from 2,116 individuals and businesses.
However, one of the outstanding and inadequacies that has caused frustration for people and businesses over the past two years is that we do not have clear regulations on the tax debt threshold to apply for temporary suspension of exit.
This leads to a situation where, in reality, some individuals, even though they only owe very small taxes, sometimes only a few million VND, are still temporarily suspended from leaving the country, causing inconvenience and unnecessary consequences for them.
In the draft decree currently seeking comments, the Ministry of Finance proposes that individuals and business owners with overdue tax debts of VND10 million or more for more than 120 days will have their exit temporarily suspended.
For individuals who are legal representatives of enterprises and cooperatives, this measure will be applied if the unit's debt is overdue for more than 120 days and from 100 million VND or more.
According to the Ministry of Finance's estimate, the country will have about 380,000 individuals who will be temporarily suspended from leaving the country if the above regulations are applied. Not a small number.
This is a reasonable, fair and transparent proposal that both increases the efficiency of tax debt collection and does not greatly affect the business environment and supports the nurturing of budget revenue.
In addition, selectively applying temporary exit suspension to individuals and organizations with tax debts will also avoid causing unnecessary difficulties for business operations of enterprises.
Another issue that the Ministry of Finance needs to consider and include in the draft decree is that there are many cases where the legal representative of a business - who is just an employee hired to manage the business - is subject to the measure of delaying exit from the country when the business owes taxes, even though they do not have the right to decide on the company's finances.
This not only affects and damages the individual representative but also creates unfairness in law enforcement in the "you get what you pay for" manner.
Finally, in addition to the specific value - amount, the nature of tax debt should also be considered by the Ministry of Finance to include in the draft.
If you are procrastinating and intentionally owe taxes, then using temporary exit suspension is the right measure. But tax debt due to force majeure, natural disasters, epidemics... needs to be considered instead of automatically announcing exit suspension in a cold manner like before!
