The exit ban measure has proven largely ineffective in collecting overdue taxes.

A businessman, asked about his wish from the newly released Politburo’s Resolution 68, said that he wanted to abolish the regulation banning business owners from leaving the country due to corporate tax debts.

The sanction was adjusted recently with the issuance of Decree 49/2025 in February 2025. However, it remains a bottleneck in the business environment. 

It is estimated that tens of thousand of businesspeople working for business owners have been affected by the measure.

Another entrepreneur echoed this, stating that he and others cannot travel abroad to secure new contracts due to their companies’ tax debts.

Resolution 68, described as bearing ‘an unprecedented reform spirit’, encourages Vietnamese businesses to expand business globally. Its guideline of limiting criminal handling of business and civil cases has fueled the confidence of businesspeople.

The exit ban policy sparked public concern over the past year. Previous regulations did not specify the tax debt level for which temporary exit suspension measures would be applied. 

The determination of the threshold depended entirely on the tax authority. This led to cases where businesses only owed a very low tax, but their legal representatives were still temporarily suspended from leaving the country, greatly affecting the business's operations.

In February 2025, Decree 49/2025 clarified tax debt thresholds: individuals or sole proprietors face exit bans for tax debts of VND50 million or more, overdue by over 120 days, while legal representatives of companies face bans for debts of VND500 million or more, also overdue by over 120 days. These apply to cases under enforced tax administrative decisions. 

Last week, tax authorities reported recovering VND4,955 billion from 7,309 taxpayers under exit bans, out of the VND83,028 billion owed.

From the watchdog agency’s perspective, exit bans are necessary to address rising tax debts, as authorities fear business leaders might flee to avoid massive debts, which are sometimes tens or hundreds of billions of dong. 

When business leaders leave the country, the company falls into a state of ownerlessness, and many assets may be dispersed while the factory and machinery are mortgaged at the bank, making it very difficult for the tax authority to collect tax debts from the business.

However, as the two entrepreneurs noted, this measure may do more harm than good as it hinders businesspeople’s ability to seek new contracts, partners, or opportunities, stifling struggling businesses’ recovery. The data showed the insignificant impact of the policy, with only 1/17th of the debt recovered.

This suggested that the exit ban on business owners with tax debts does not significantly increase tax debt recovery, stifling opportunities to generate revenue and profits needed to pay taxes to the state.

Compared to prior regulations, Decree 49 sets clearer, higher debt thresholds, narrowing the scope of exit bans. Yet, the business community finds these thresholds still insufficient, and advocates for restrictions only in severe cases with significant debts.

Currently, tax agencies are holding data on millions of bank accounts. In the context of rapidly developing non-cash payments and effectively connected data, the deduction of money from accounts is feasible and should be prioritized.

Once the measure can be implemented effectively, other measures such as invalidating invoices or exit bans should be reserved for serious cases with large debts instead of being applied on a large scale. Many other countries use alternative methods to address tax evasion without restricting basic rights like travel.

Resolution 68 calls for clear distinctions between criminal, administrative, and civil liabilities, and between entities and individuals. 

It urges amendments to criminal, civil, and procedural laws to prioritize administrative, economic, and civil remedies, allowing businesses to rectify violations. When criminal prosecution is possible, non-criminal measures should be favored, and economic remedies prioritized as a basis for further action.

Resolution 68 requires compliance with the principle of clearly distinguishing criminal, administrative and civil responsibilities; between legal entities and individuals in handling violations.

It urges amendments to criminal, civil, and procedural laws to prioritize administrative, economic, and civil remedies, allowing businesses to rectify violations. When criminal prosecution is possible, non-criminal measures should be favored, and economic remedies need to be prioritized as a basis for further actions.

As Resolution 68 is implemented, it’s time to reassess this exit ban policy to support entrepreneurs’ wealth creation while adopting equally effective alternatives for tax debt enforcement.

Tu Giang