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Banking & Finance

Sabeco's $136mn tax bill to be reviewed

Released at: 14:09, 05/01/2019

Sabeco's $136mn tax bill to be reviewed

Photo: vov.vn

Tax penalty held back at PM's request.

by Long Van

Prime Minister Nguyen Xuan Phuc has asked the Ho Chi Minh City Department of Taxation to hold back on enforcing a tax decision on collecting VND3.14 trillion ($136.1 million) from the Saigon Beer-Alcohol-Beverage Corporation (Sabeco) for violations on special sales tax, the Vietnam News Agency reports.

The request was made in an express document from the Office of the Government signed by Minister and Chairman Mai Tien Dung on January 2.

“The Prime Minister is directing ministries and agencies to review the petition of the State Audit Office and the Government Inspectorate regarding the tax penalty for Sabeco,” the document stated. “The Prime Minister ordered the Ministry of Finance and the Ho Chi Minh City People’s Committee to ask the city’s Tax Department not to compel Sabeco to make this payment.”

According to the minister, tax enforcement on Sabeco involves foreign investment factors so the Prime Minister is very cautious, and during the time of considering this issue there has been no tax enforcement on the company.

“If handled quickly, it can affect the general investment environment of the country,” the minister was quoted by the news agency as telling media.

On December 28, Sabeco sent a document to the Prime Minister requesting help after receiving five decisions from the Ho Chi Minh City Department of Taxation compelling the company to pay tax fines by taking money from Sabeco’s bank accounts.

Sabeco has been directed to pay a total of VND3.14 trillion ($136.1 million) in monetary penalties and overdue payments for administrative violations on special sales tax during the 2007-2015 period.

According to the company, without the Prime Minister’s conclusion and a valid administrative decision, such enforcement action contradicts the law.

Minister Dung said that after the Office of the Government collected opinions from relevant ministries and agencies, the Prime Minister would preside over a meeting of advisory bodies to make a proposal for dealing with the case.

The market reacted negatively to the dispute.

Sabeco’s market cap has fallen more than VND14 trillion ($606.7 million) in the last two days after its shares, coded SAB on the Ho Chi Minh Stock Exchange (HSX), plunged by more than 8 per cent from VND267,500 per share at the end of 2018 to VND245,500 on January 3.

Vietnam Beverage Co. Ltd, a business related to ThaiBev’s billionaire Charoen Sirivadhanabhakdi, lost about VND7.5 trillion ($325 million) as it owns more than 343 million shares, equivalent to 53.59 per cent of Sabeco’s capital.

At the end of September, Sabeco reported net revenues of VND25.54 trillion ($1.1 billion), up 8 per cent year-on-year, of which beer sales accounted for 85 per cent of total revenues. Net profit, however, declined 6 per cent to VND3.3 trillion ($143 million).

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