07:45 (GMT +7) - Wednesday 08/07/2020

Banking & Finance

Quang Nam gold miners must pay tax debts before re-licensing

Released at: 16:14, 12/07/2016

Quang Nam gold miners must pay tax debts before re-licensing

Photo: Duc Anh

Deputy PM Truong Hoa Binh tells local authorities that tax debts must be collected or guaranteed before two gold mining companies are issued new licenses.

by Duy Anh

Two gold mining companies in central Quang Nam province must pay their tax debts in order to be re-issued with licenses, Deputy Prime Minister Truong Hoa Binh told a meeting with the Provincial People’s Committee on July 10.

The Phuoc Son Gold Company and the Bong Mieu Gold Company, under the ownership of the Canadian Group Besra, reportedly owe VND430 billion ($19.5 million) in tax payments, according to the provincial Department of Taxation.

In addition to having tax debts, Bong Mieu Gold was also caught working illegally after its license expired last March. Provincial authorities released a statement on June 16 shutting down the company’s operations.

“Relevant ministries and authorities need to carefully review all matters before granting a new license to these companies,” Deputy PM Binh said at the meeting.

He also mentioned that administrative prosecution would be replaced by criminal prosecution in certain circumstances. “This is to deter other gold mining companies who are working illegally in Quang Nam province,” he said.

Viet A Bank, which holds 35 per cent of Phuoc Son Gold, has proposed being its tax debt guarantor. According to a statement sent to the Quang Nam Provincial People’s Committee on July 7, the bank would be responsible for tax debts if the gold mining company cannot pay.

Mr. Dinh Van Thu, Chairman of the People’s Committee, told local media that “Viet A Bank guaranteeing the payment of Phuoc Son Gold’s tax debts is an important step in the gold company being re-issued a license.”

Phuoc Son Gold’s tax debts of VND334 billion ($15.2 million) will be fully paid to the provincial tax department within 12 months, with VND27 billion ($1.2 million) paid monthly. Payments will begin in mid-August.

Mr. Thu responded that the People Committee will work with authorities to reach an agreement on the re-issuing of Phuoc Son Gold’s license. “We will help Phuoc Son Gold be back in business in mid August,” he was quoted as saying. “They will therefore be capable of paying their tax debts.”

However, Deputy PM Binh said that there is no general term and policy for the debt guarantee. “The term and policy needs to be detailed and there will be sanctions if Viet A Bank and Phuoc Son Gold don’t pay the amount owing,” he said.

Binh Mieu Gold has recently proposed returning to operations but their license application was rejected by authorities. It suspended its illegal operations after it was forced to shut down on June 16. The company currently owes more than VND100 billion ($4.5 million) in tax debts.

Viet A Bank’s total charter capital as at the end of 2015 was VND3.1 trillion ($139 million), according to the bank’s annual report. On June 2015, Besra sold 35 per cent of its stake in Phuoc Son Gold to the bank. The deal was set to reform the gold mining company after it reported accumulative losses of VND352 billion ($16 million) in June 2014, while Bong Mieu lost VND662 billion ($30.1 million).

Besra reported a loss of nearly VND1 trillion ($46 million) and short-term loans of VND2.5 trillion ($112 million) as at June 30, 2014, and with falling gold prices, interest payments on loans and other expenses over the last two years the actual loss may be much higher.

User comment (0)

Send comment