Vietnam unleashes the taxman on dissent

Vietnamese authorities are cranking up tax evasion cases against activists in a bid to soften the complexion of their repression

 

By DAVID HUTT | Asia Times

May 4, 2022

On January 11, Mai Phan Loi, the founder and director of the nonprofit Center for Media in Educating Community, was sentenced to four years in prison on “tax fraud” charges.

The same day, Nguy Thi Khanh, the founder of an environmental group, was picked up by the Hanoi authorities on similar charges of “tax evasion,” which carries a possible seven-year prison sentence.

A few days later, on January 24, Dang Dinh Bach, chair of the Law and Policy of Sustainable Development Research Center, another civil-society group, was jailed for five years also for “tax evasion.” 

Repression is common in one-party Vietnam, where the Communist Party has ruled uncontested since 1975.

But the situation for activists and dissidents has worsened substantially since Nguyen Phu Trong won his second term as party boss in 2016, and further still after he gain an unprecedented third term last year. Many of his more liberal-minded colleagues have been sidelined, making way for security apparatchiks. 

There are currently 206 activists in prison and another 334 at risk, according to The 88 Project, an independent political prisoner monitoring group. Reporters sans Frontières reckons Vietnam is the world’s third-largest jailer of journalists and bloggers.

The length of prison sentences is also increasing. Of the 32 people jailed in 2021 for political “crimes”, almost two-thirds were sentenced to five or more years in prison. In 2020, it was just under half.

Usually, the communist authorities have been rather bland in their allegations. Many activists are jailed for “making and disseminating propaganda against the state”, a crime so vaguely defined that it can be wielded against any dissident pro-democracy activists or unfortunate Facebook user whose critical post gets picked up by the censors. 

But the authorities have sharpened their arsenal. Increasingly wary of foreign criticism amid a warming trend with the West, the government frequently hires thugs to rough-up campaigners rather than arresting them. “Abusing democratic freedoms,” defined under article 331 of the Criminal Code, has also been wielded more commonly in recent years. 

Now “tax evasion” is being added to the repressive mix. There is an “emerging and disturbing pattern in the use of Vietnam’s tax laws to criminalize environmental leaders, and follows the broader targeting of civil society leaders, as well as shrinking civil society space,” said the International Federation for Human Rights and the Vietnam Committee on Human Rights in a recent report. 

Analysts say the reasons are two-fold.

First, it’s a less obvious means of repression. Foreign governments can easily complain about Vietnam’s woeful human rights conditions when an activist is jailed for “spreading anti-state propaganda”, a bare-naked admission of despotism. But it’s more puzzling for foreign observers whether cracking down on the tax affairs of a civil-society group is heavy-handed or fair enforcement of the law. 

For the Vietnamese people, too, it’s more sonorous. Trong, the Communist Party boss, has made himself popular with swathes of the public through his “burning furnace” anti-corruption campaign, the most effective graft-busting exercise from the party in decades. The great and the good, including capitalist billionaires, have been fingered as part of the campaign while in a few high-profile cases death sentences have even been handed down. 

As such, the tax affairs of activists and NGOs can be framed as part of the anti-graft campaign. Local laws aid the authorities since the legality of NGOs or civil society organizations (CSOs) is opaque in Vietnam. 

“The reality is these NGOs have been operating in a gray area, unable to realistically comply with the VCP’s harsh and unrealistic edicts for local and provincial committees to give final approval over civil society plans,” said Phil Robertson, deputy director of Human Rights Watch’s Asia Division. 

“Now that the scrutiny has come on donations and taxes, the NGOs have nowhere to hide, which is all part of what appears to be a [Communist Party] effort to reel them in and put them under closer control,” Robertson added. “This is more about power than taxes, and forcing NGOs to appease the party and avoid critical topics.” 

“The real losers in this whole situation will be the Vietnamese people who were benefiting from the NGO programs that sprung up in part because of the Vietnamese Communist Party’s lack of concern and priority on solving real problems faced by local people,” Robertson added. 

The other reason, analysts say, is that communist authorities are moving their sights away from political dissidents, who they have now effectively crushed, and onto the informal NGO sector. 

In recent years, scores of organizations have sprouted to campaign for environmental conservation, land rights and worker protection. In part, this is because many activists think it’s safer to wage their campaigns through an organization, allowing them to work together and, supposedly, gain some sort of protection against the state. 

They have also been encouraged by foreign governments. When Vietnam signed a free trade agreement with the European Union in 2019, the communist government vowed to give more space to civil society groups. Brussels saw this as progress and many Vietnamese activists believed the hype.  

Moreover, while cracking down on alleged tax improprieties may be novel, it actually stems from a historic and permanent trend in the Communist Party’s fight to snuff out any meaningful opposition. 

In 2006, activists from across the board came together to form Bloc 8406, a coalition centered around a manifesto that called for democratic reforms and was arguably the country’s first pro-democracy movement.

It survived for just a few months but was representative of a broader trend: disparate individuals and small groups were joining together to form hierarchical, broad-based organizations. The country’s first two recognizable independent trade unions were formed the same year. Independent journalists and bloggers also formed associations. 

Activism was thus moving from the individual to the communal, a problem for the communist authorities as it could more easily pick off isolated activists. The attempt at forming these coalitions failed in 2006, in large part because of repression. But they sprouted again years later, such as when the founders of Bloc 8406 formed the Brotherhood for Democracy in 2013, which, again, was snuffed out but it’s message stuck.

Just after he helped form the Brotherhood, Nguyen Van Dai, a now-exiled dissident lawyer, stated that movements in Vietnam “were just individual-based” and “there was no coordination. That was why they were weak.” He went on: “it is time for domestic democracy activists to gather to discuss and find the shortest path for democracy in Vietnam.”

The cycle repeats itself. For communist authorities, the new cohort of NGOs and CSOs poses a similar threat to their hold on power as the past coalitions of democrats and campaigners: people are converging, conversing and campaigning in new, ill-defined spaces not controlled by the Communist Party.

But authorities are striking back yet again by wielding equally ill-defined laws to tackle the finances and tax obligations of the groups.  

Follow David Hutt on Twitter at @davidhuttjourno