Vietnam’s tax authorities have issued 61,492 travel ban notices against individuals associated with unpaid taxes totaling 83.028 trillion VND (approx. 3.3 billion USD), yet only 4.955 trillion VND (approx. 197 million USD), or one-seventeenth of the total, has been recovered - raising concerns over the effectiveness of the current sanction.

One business owner, asked about his highest hopes under the sweeping reforms promised by Resolution 68, said he wished for an end to the rule banning businesspeople from leaving the country due to their company’s tax debts. This regulation, recently updated in Decree 49/2025/ND-CP (issued February 2025), has been seen as a major bottleneck in Vietnam’s business environment.

He noted that tens of thousands of CEOs - many of whom are merely employees of their firms - are currently affected by this restriction.

Another entrepreneur agreed, stating that he and many peers are unable to travel abroad to secure new business due to tax debts incurred by their companies.

Resolution 68 encourages Vietnamese enterprises to expand globally and explicitly seeks to limit the criminalization of civil and economic cases, inspiring renewed confidence among business leaders.

The travel ban has sparked widespread public debate over the past year. Prior to Decree 49, there were no clear thresholds for tax debts that would trigger travel restrictions - this was left to the discretion of tax authorities. As a result, even minimal debts could lead to a legal representative being barred from travel, severely disrupting business operations.

Decree 49 now sets specific criteria: individual business owners and household business heads are subject to exit bans if they owe 50 million VND (approx. 2,000 USD) or more for over 120 days. Legal representatives of enterprises face bans for debts of 500 million VND (approx. 20,000 USD) or more under similar conditions. All cases must also involve enforcement of administrative tax decisions.

As of last week, authorities have retrieved 4.955 trillion VND from 7,309 taxpayers currently restricted from traveling. Yet this represents a small portion of the 83.028 trillion VND in outstanding tax debt.

From an administrative perspective, the sanction is understandable amid rising tax delinquency. It’s a protective measure against business leaders fleeing the country with tens or hundreds of billions of VND in unpaid taxes, leaving companies abandoned, assets liquidated, and bank-collateralized machinery and factories in limbo - making tax recovery nearly impossible.

Still, as the two aforementioned entrepreneurs emphasized, the restriction backfires by denying companies a chance to recover. They lose opportunities to find new contracts, partners, or clients abroad, leaving struggling businesses unable to bounce back.

Moreover, as shown by the data, the measure has limited success in recouping lost revenue.

While Decree 49 has tightened criteria and increased the thresholds for enforcement, many in the business community still feel the standards fall short. They argue that travel bans should be reserved for exceptional, serious cases involving significant unpaid taxes.

With tax authorities now holding data from millions of bank accounts, and digital payment adoption rising, a more effective solution - such as directly deducting tax debts from bank balances - is both practical and preferable.

If this approach is executed well, other measures like invoice invalidation or travel bans should be limited to extreme cases with substantial debts. This is also the practice in many other countries, where restrictions on travel - a basic right - are only a last resort.

Resolution 68 stresses the principle of clearly distinguishing criminal from civil and administrative liability, and separating corporate from personal accountability.

This suggests an urgent need to revise criminal, civil, and procedural laws to prioritize civil, economic, and administrative remedies first - allowing companies and entrepreneurs the chance to rectify violations and recover from damages.

In practice, if a case could be resolved without criminal charges, then criminal enforcement should be avoided. If criminal charges are warranted, economic restitution should come first and be a key factor in further legal decisions.

As Resolution 68 rolls out, the time may be right to reassess this travel restriction - balancing tax enforcement with an environment where entrepreneurs can thrive - by implementing other effective, rights-respecting measures.

Tu Giang