MOF fails to collect tax arrears on 40 imported vehicles

The Ministry of Finance (MOF) has reportedly failed to collect the tax on the 40 vehicles imported by an enterprise in Phu Tho province. The decision to collect tax arrears has been rejected by the court.

MOF: investment license the key problem

Several years ago, the Phu Tho Passenger Transport Joint Venture imported 40 vehicles and enjoyed the import tax exemption. However, the customs agency later found out that the imports could not meet the requirements to be able to enjoy the tax exemption.

According to Deputy Minister of Finance, Do Hoang Anh Tuan, in 2008, after reporting to a Deputy Prime Minister and getting the approval from him, MOF sent a dispatch to the Phu Tho provincial people’s committee, showing the violations of the company and asking the local authorities to revoke the investment license of the company, so that the General Department of Customs (GDC) could release the decision to collect tax arrears.

However, to date, the Phu Tho provincial authorities still have not released the decision to take back the investment license. Therefore, the transport company decided to sue MOF for the decision to collect tax arrears on the 40 imported vehicles. Finally, the enterprise has won the case.

The People’s Supreme Court has decided to cancel the MOF’s decision on tax arrear collection.

According to MOF, the final verdict was made because the Phu Tho provincial authorities have not revoked the investment license of the company, which means that the company has been operating legally, which, in accordance to the current laws, still can enjoy tax incentives.

Meanwhile, a deputy chair of the Phu Tho provincial people’s committee said that the MOF’s decision to revoke investment license was unreasonable. “Why don’t the MOF and GDC do not use their power to collect tax arrears? We cannot see any job of the provincial authorities here in the case,” he said.

A GDC’s official explains that MOF asked to revoke the investment license of the transport company because it found out that the company could not meet the requirements to set up a joint venture, and that it made the corrupt use of the preferential policies applied to joint ventures to enjoy tax incentives.

The above reasons were also presented by MOF’s officials before the court, but the arguments were rejected by the court, which stated that the company is still operational, while the imported vehicles have been used to carry passengers.

“GDC did not agree with the opinion, but we have lost the case,” the official said.

MOF insists on revoking investment license

Expressing the disagreement with the court’s final decision, on August 9, Tuan of MOF, once again, asked the Phu Tho provincial authorities to check the current laws and revoke the investment license granted before to the Phu Tho transport company to pave the way for GDC to make the decision to collect tax arrears.

How can GDC collect tax arrears, once it has lost the lawsuit? The official from GDC said that the viewpoint of GDC is that the Phu Tho provincial authorities granted the investment license, therefore, they can revoke the investment license now.

Local newspapers once posted a series of articles in 2008, warning that a lot of enterprises under the patronage of the joint ventures with foreign partners tried to evade tax. At that time, the enterprises imported hundreds of vehicles at low costs thanks to the tax exemption, which then put big difficulties for domestic transport companies.

A regular trick played by the enterprises was that they declared that the imported vehicles would be used to carry passengers in remote areas in order to enjoy tax incentives, but in fact, they used the vehicles in other localities.

Source: Tien phong

Tags: Vietnam automotive, Vietnam automotive industry, Vietnam autos market, Vietnam car imports