HÀ NỘI – Prime Minister Nguyễn Xuân Phúc has asked the Tax Department of HCM City to hold back on enforcing a tax decision on collecting VNĐ3.14 trillion (US$134.2 million) from Sài Gòn Beer-Alcohol-Beverage Corporation (Sabeco) for violations on special sales tax.

This request was made in an express document of the Government Office signed by Minister and Chairman Mai Tiến Dũng on Wednesday.

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

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

“If handled quickly, it can affect the general investment environment of the country,” he told the media.

On December 28, Sabeco sent a document to the Prime Minister to call for help after receiving five decisions of the HCM City Tax Deparment to compel the company to pay the tax fines by taking money from the Sabeco’s bank accounts.

Sabeco has been requested to pay a total VNĐ3.14 trillion for its monetary penalties and overdue payment for administrative violations on special sales tax during the 2007-15 period.

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

Dũng said after the Government Office collected the opinions of relevant ministries and agencies, the Prime Minister would preside over the meeting for advisory bodies to make proposal to deal with this case.

Shares of Sabeco plummet

The market reacted negatively to this dispute.

Sabeco’s capitalisation has been evaporated by more than VNĐ14 trillion ($598.3 million) in the last two days after its shares, coded SAB on the Hồ Chí Minh Stock Exchange, plunged by more than 8 per cent from VNĐ267,500 per share by the end of 2018 to VNĐ245,500 ($10.49) on Thursday.

Vietnam Beverage Co Ltd, a business related to ThaiBev’s billionaire Charoen Sirivadhanabhakdi, lost about VNĐ7.5 trillion ($320.5 million) as it owns more than 343 million shares, equivalent to 53.59 per cent of Sabeco’s capital.

Ending September 2018, Sabeco reported net revenues of VNĐ25.54 trillion ($1.1 billion), up 8 per cent year-on-year, of which beer sales accounted for 85 per cent of total revenues. However, its net profit declined 6 per cent to VNĐ3.3 trillion ($141 million).

Sabeco’s total assets increased by 4 per cent to more than VNĐ23 trillion ($983 million). – VNS