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Dang Thi Bach Tuyet (Front), a former official at the Dong Nai Province Tax Agency, is examined on Tuesday

The trial of six former senior tax officials charged with allowing a Taiwanese-invested fisheries company to evade years of taxes began Tuesday.

The defendants include Phan Van Hien and Vu Xuan Hieu, two former deputy heads of the Finance Ministry’s Foreign Sector Tax Department, Hoang Ngoc Nang Hong, former head of the department’s Foreign Investment Section, and three former officials from the Dong Nai Province Tax Agency, Dang Thi Bach Tuyet, Nguyen Thi Lan and Pham Van Ngo.

The defendants were all charged with “deliberately violating state economic regulations causing serious consequences.” The charge carries jail terms of between 10-20 years if the involved damages value VND1 billion (US$54,156) or above.

The defendants had illegally allowed the reduction and exemption of taxes for Grobest & IMei Industrial Company (Grobest) at the Amata Industrial Park from 2003-2005, according to the indictment sent to the Dong Nai Province People’s Court by the provincial Prosecution Agency in May 2009.

Prosecutors in the southern province near Ho Chi Minh City said the total amount of lost taxes was VND36 billion ($1.95 million).

The indictment said Grobest was established in 2000 to produce fisheries feed for the Vietnamese market and to produce fisheries products for export. The company was ineligible for preferential tax treatment but it managed to obtain approval from relevant agencies to access favorable tax policies, according to the indictment.

In 2004, the Dong Nai Tax Agency audited Grobest’s 2003 taxes and ordered the company to pay VND5.4 billion ($292,445) in tax debt.

Grobest then asked Tuyet and Ngo to obtain a two-year tax exemption and a 50 percent tax reduction for the following three years.

The company also signed a $155,000 contract with Accounting Auditing & Consulting Company (AACC) to help prepare documents seeking approval from the Finance Ministry’s General Department of Taxation to enjoy an even more favorable policy.

Hong then forwarded the documents to Hien and Hieu, who signed off on exempting Grobest of taxes for four years and reducing its taxes by 50 percent for the next four years.

Hien told the court on Tuesday that the document he signed responded only to questions Grobest had asked and was not a direct instruction to the Dong Nai Tax Agency.

“Dong Nai Tax Agency might have misunderstood the document or possibly mis-applied it when it exempted and reduced Grobest’s taxes,” he said.

Hieu and Hong also said they had issued relevant documents properly.

On the other hand, former officials at the Dong Nai Tax Agency said they had just followed instructions from higher authorities.

“As normal, decree is under a law, circular is under a decree and instruction documents are under circulars. We wouldn’t dare to refuse an instructions document from the Finance Ministry, which is just like our grandfather,” he said.

The court is scheduled to hand down a verdict in the case on January 29.

Reported by Hoang Tuan

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