At a meeting on 25/11 concerning key initiatives to combat revenue loss, the Tax Department announced that a significant number of businesses, particularly small and medium-sized enterprises (SMEs), currently report consecutive losses over many years. A segment of these businesses shows unusual signs: no revenue generated yet continuously declaring losses; expenses not serving production and business activities; improper provision allocation; and related-party transactions not complying with the arm's length principle.

Audits of high-risk companies have revealed numerous violations. Therefore, the Tax Department recommends that units continue reviewing tax declarations and develop audit plans for 2026, specifically targeting loss-making businesses with high tax risks.

In parallel, tax authorities must review databases from companies in their areas, research, and establish appropriate selection criteria. Provincial and city tax departments will compile violations and difficulties encountered during tax audits of multi-year loss-making companies and those with lower-than-industry-average profit margins. Additionally, they will enhance professional training to improve the capacity to detect tax fraud in multi-year loss-making business models and boost public awareness to encourage voluntary compliance.

Director Mai Xuan Thanh speaking at the meeting to implement key initiatives to combat tax revenue loss. Photo: Tax Department

During the meeting, Director Mai Xuan Thanh also urged tax authorities at all levels to focus on combating value-added tax (VAT) refund fraud, especially in the gold, silver, and gemstone trading sector. Recent reviews have revealed many risk indicators, including gold transactions through individuals without invoices, improper authorization, and revenue declarations not matching actual figures.

Beyond this sector, audits in localities have also identified numerous non-compliant behaviors in other industries. These include renting "virtual" offices without actual production and business operations, non-bank payments, incorrect invoice issuance timing, and exported goods showing unusual signs regarding origin or usage status.

The department urged provincial and city tax departments to focus resources on completing audits and reviews of all organizations and individuals, particularly the gold, silver, and gemstone trading group. They must promptly detect and strictly penalize violations. Simultaneously, tax authorities will prioritize resources to swiftly complete VAT refund audits in the final two months of the year and intensify efforts against invoice trading fraud.

For localities severely affected by natural disasters, Director Mai Xuan Thanh requested that provincial and city tax departments both ensure support for appropriate tax management solutions and, based on actual conditions, delineate affected areas and entities, assess damages, and estimate recovery times.

"The implementation of these initiatives will not only contribute to combating state budget revenue loss but also create a transparent, fair business environment, strengthening the trust of citizens and businesses", he said.

Tat Dat