Vietnam’s business lobby is pressing the government to wipe more than 27,800 billion dong of legacy tax principal, penalties and late-payment interest tied to millions of dormant tax IDs, in a move that could speed up corporate cleanup but also trim potential state revenue.
Vietnam lobby seeks tax debt write-offs for dormant firms
The Vietnam Chamber of Commerce and Industry, or VCCI, says the current draft rule is too rigid because it would require inactive taxpayers in status 03 and 06 to pay 100% of outstanding principal before any interest relief can be granted by June 30, 2028. That, it argues, leaves the government trying to collect debts that in many cases are no longer recoverable.
Sentiment Indicators
According to Finance Ministry data cited by VCCI, 2.52 million taxpayers are stuck in the two statuses, with 529,041 of them having stopped operating for more than 10 years. The associated tax debt has reached 27,805 billion dong, while uncollected business-license fee debt is estimated at more than 15,000 billion dong.
VCCI wants a more targeted regime that would allow the authorities to freeze and then erase all outstanding principal, fines and late charges for cases where the business owner has died, gone missing or lost legal capacity, or where a company has already completed bankruptcy procedures and has no remaining assets. It also proposes writing off small tax principal debts of less than 20 million dong for household and individual businesses, and under 50 million dong for micro-enterprises that have been inactive for more than five years and have no recoverable assets.
The chamber says keeping those liabilities on the books can cost more to monitor and enforce than the debt is worth, while leaving millions of tax codes in limbo blocks the closure of defunct businesses and clutters the tax system. For investors and lenders, a cleaner registry would improve the quality of corporate data and reduce friction in insolvency, dissolution and re-registration processes.
VCCI is also urging a faster mechanism for handling overpaid taxes, saying some companies delay liquidation because tiny balances — sometimes just a few thousand dong — must still be reconciled before a tax code can be terminated. It wants taxpayers to be allowed to waive repayment of overpaid amounts of up to 10 million dong so the tax office can close accounts without a formal refund process.
The proposal comes as Vietnam weighs broader tax-enforcement changes, including tighter controls on tax arrears and restrictions on exit bans for legal representatives of delinquent firms. The next step is whether policymakers adopt a narrower write-off framework that protects the budget while clearing out long-frozen liabilities, or keep the tougher blanket requirement and leave millions of inactive tax records unresolved.
| Entity | Gains | Losses |
|---|---|---|
| Dormant taxpayers | ▲Faster closure of tax IDs | ▼Less chance of carrying legacy liabilities |
| State tax authority | ▲Cleaner taxpayer database | ▼Potential loss of recoverable revenue |
| Active businesses seeking dissolution | ▲Quicker liquidation process | ▼More compliance if rules tighten elsewhere |
| Budget/investors | ▲Better data quality and legal clarity | ▼Immediate revenue collection may weaken |
