Ministry pushes to clear backlog of 1.1 million zombie businesses

Ministry pushes to clear backlog of 1.1 million zombie businesses

Around 1.1 million taxpayers have stopped operating nationwide, but have yet to complete procedures for closure.

Retail space for rent. The finance ministry has proposed allowing tax authorities to open bankruptcy proceedings against companies that have not operated at their registered addresses for more than three years. — Photo znews.vn

The Ministry of Finance is stepping up efforts to deal with more than 1.1 million inactive businesses that have ceased operations but have yet to complete dissolution or tax deregistration procedures.

The ministry has proposed allowing tax authorities to initiate bankruptcy proceedings against companies that have not operated at their registered addresses for more than three years or failed to settle outstanding tax debts.

According to the finance ministry, around 1.1 million taxpayers have stopped operating nationwide, including companies undergoing dissolution, businesses that have abandoned their registered addresses and firms that have fulfilled their tax obligations but have yet to complete procedures for revocation of their business registration certificates.

The backlog has accumulated over several years due to unresolved administrative files, limited processing capacity, missing corporate records, changes in legal representatives and difficulties contacting business owners, the ministry said. 

Some cases even involve identity fraud used to establish companies, requiring coordination among multiple Government agencies.

Leaving the cases unresolved would undermine the quality of tax administration data and make it harder for legitimate businesses seeking to dissolve or resume operations, according to the ministry.

To address the issue, the finance ministry has also asked the Department of Taxation to launch a nationwide campaign to clean up tax codes, with a focus on reviewing and standardising tax data.

The ministry said it would continue working with the Ministry of Public Security to verify identity information and crack down on the misuse of corporate entities, tax identification numbers and invoices for tax evasion, illegal invoice trading and other forms of fraud, while making it easier for businesses to enter and exit the market in accordance with the law. 

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