Why Sai Gon import export services JSC enforced with account block

Authorities inspected a free-duty shop in Sai Gon port in 2004. Photo: T.H

Accordingly, On December 26, 2022, Sai Gon Port Zone 1 conducted an account deduction and requested an account block for Sai Gon Import-Export & Services JSC (address: 215-217 Tran Hung Dao, Co Giang ward, District 1, HCM City, Tax code: 0302976687) opened at Vietcombank – Sai Gon Cho Lon Branch to execute Notice 568/TB-KVIII dated November 28, 2022, on payment of tax and other payables for imported and exported goods of Sai Gon Port Zone 3 Customs Branch.

According to the notice, the enforced amount is over VND33.3 billion. The enforcement decision is effective within 30 days from December 26, 2022.

The above tax debt has resulted from inspection of the police from 1999 to 2004 for Nha Rong Port Duty-Free Shop of Sai Gon Import-Export & Services JSC. To the inspection result, the shop sold duty-free goods in contravention of regulations, including 26,790 packages of foreign cigarettes, 47,558 bottles of foreign alcohol and 23,107 cans of beer, causing revenue loss.

In December 2006, the Director of the Supreme People’s Procuracy issued Indictment No. 13/VKSTC-V1 stating that Nha Rong Port Duty-Free Shop had sold goods to the market in contravention of regulations, causing a tax loss of over VND32.3 billion for alcohol and cigarettes (excluding beer). However, as of October 2007, the Director of the Supreme People’s Procuracy decided to suspend the criminal case and switch to administrative sanctions because there was insufficient evidence to constitute a criminal case.

Due to the act of selling duty-free goods to the domestic market in contravention of regulations, the Customs will collect tax arrears. To solve the case, the HCM City Customs Department held many meetings with relevant parties and, based on the results of the tax assessment of the Supreme People’s Procuracy for the sold infringing goods, imposed a tax amount of more than VND 33 billion for three items including Tobacco, alcohol and beer.

After issuing the decision on tax assessment, the customs authority received a letter of explanation and complained about the two decisions on tax assessments. However, Customs still maintains the conclusion of tax assessment.

Although Customs has repeatedly urged and requested the company to fulfil its tax obligations, the company has not paid the tax debts. Thus, HCM City Customs Department has decided to enforce import-export procedures for Saigon Import-Export & Services JSC and name the tax debtor in the mass media.

To handle the above tax debt, at the beginning of February 2016, the Saigon Port Zone 2 Customs Branch had a meeting with the representative of the Saigon Import-Export & Services JSC and requested the company to provide dossiers and documents on the above tax debt so that the customs will consider whether the case is eligible for debt relief as prescribed in Circular 179/2013/TT-BTC dated December 2, 2013, of the Ministry of Finance or not.

However, in the document sent to the Saigon port area 2 Customs Branch on March 7, 2016, Saigon Port Import-Export and Services JSC still said that the company has neither owed tax nor sold the goods mentioned above in the domestic market and requested the customs authority to base on valid original documents to conduct tax finalization. Also, the company provided a dossier of the corporate valuation Council dated October 15, 2002, to the HCM City Customs Department.

According to HCM City Customs Department, the above tax amount was incurred for the Sao Gon Port duty-free shop while the company was still a 100% State-owned enterprise and was not yet equitized. Therefore, the company’s Board of Directors does not accept the above tax debt.

A company enforced to block account for tax debt of over VND185 million

HCM City Customs Department is taking enforcement procedures per the Law on Tax Administration to handle the above tax debt.