2019: A year of comprehensive tax reform

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Mr. Cao Anh Tuan.

In 2019, Vietnam's tax payment index has achieved a good step by not only improving inrankings, but also the criteria of this index have changed positively. Could you speakmore about this?

In the Doing Business 2020 report, published by the World Bank, Vietnam's tax payment index has increased by 22 steps, from 131st to 109th position out of 190 countries. Accordingly, most of the indicators that decide this index have improved. In particular, the time to pay taxes decreased by 114 hours (from 498 to 384 hours). Of these hours, there was areduction of 94 hours due to reforms, simplification of procedures for VAT declaration and 20 hours due to reforms, simplification ofthe procedures for submission and finalization of Corporate Income Tax. Vietnam's tax payment times also decreased by 4 times (from 10 times in 2019 to 6 times in 2020). The total tax rate (ratio of total tax and contribution) decreased by 0.2%, from 37.8% (13.3% tax, 24.5% social insurance) in 2019 to 37.6% per year in 2020.

Thus, with Vietnam's tax payment index increasing by 22 levels, the tax industry has exceeded the Government's target set out in Resolution No. 02/NQ-CP (in 2019 increasing 7-10 steps in the tax payment index), approaching the target by 2021, the tax payment index will increase to 30-40 steps.

This is really an impressive result for the tax industry. If in the Global Business Environment Report published in 2018, Vietnam's tax payment index decreased slightly due to policy lag, then in 2019, the efforts of the entire tax industry have been recognized and evaluated in a complete and comprehensive manner.

To achieve this result, the tax sector has made continuous efforts to apply information technology to tax administration to reduce and simplify many aspects of the process and makingmore room for manual administrative procedurereform, creating more favorable conditions for businesses and people to perform their obligations to the state budget. This is the clearest evidence for the outstanding efforts in promoting comprehensive reform of the entire tax system during the past year from institutions, modes to apparatus.

Last year, in addition to being recognized by international organizations, the outlook of the domestic business community for the tax industry also changed significantly. How do you evaluate this?

In the Business satisfaction assessment report for tax authorities published by the Vietnam Chamber of Commerce and Industry (VCCI) in October 2019, up to 78% of businesses were satisfied with the results of tax reform. This is the third year VCCI has organized an assessment of business satisfaction with the results of tax reform. If this index was only 71% in 2014, 75% in 2016, then in 2019 this index increased to 78%.

On further analysis of this assessment report of VCCI, it can be seen that many indicators have reached a high rate.Up to 90% of businesses think that easy and convenient access to tax information; 80% assess that tax administrative procedures are easy or relatively easy to implement; or nearly 97% of businesses said that it was easy or relatively easy to implement electronic tax procedures.

We think this is a very positive source of encouragement for the business community towardsthe Tax Authority. The results also show the efforts of the Ministry of Finance in general and the General Department of Taxation in particular in implementing reforms, simplifying tax administration policies and procedures, amending business processes and the application of information technology to support enterprises in tax declaration and paymenthas brought about many practical benefits in the past, in accordance with the needs and desires of enterprises.

The strategy of reforming the Tax system in 2011-2020, approved by the Prime Minister, has set the goal "By 2020, at least 80% of taxpayers will be satisfied with the services provided by tax authorities". As a result, this year, I think that the tax industry is getting closer to the goal.

Professional operations at Hanoi Tax Department. Photo: Thuy Linh.

It is known that in the report by VCCI, the index "The service of tax officials" in 2019 has increased by 1.5 points compared to 2016 (2019 is 7.86 points, 2016 is 6.36 points). How has the tax industry tried to make the image of tax officials in the eyes of the business community better?

I think this is the result of the tax industry taking drastic measures, from the training of professional qualifications for tax officials to rectifying public discipline; practice working style, the spirit of service attitude of tax officials. Those things have been recognized and assessed fairly by the business community.

The tax industry has been strengthening the discipline in the performance of public duties of tax officials, especially focusing on the critical stages that are likely to cause trouble and harassment, such as supervising the implementation of tax inspection (recording inspection/electronic diary), handling post-inspection results; solving tax refunds of enterprises.

At this point, the whole tax sector will also continue to focus on trainingand raising the qualifications and ethics of public affairs, the spirit and attitude to serve people and businesses bytax officials; ensure the management and settlement of tax administrative procedures in accordance with the law and aim to improve the satisfaction of taxpayers.

It can be said that up to now, both the legal institution and administrative reforms have been done well by the General Department of Taxation. How will this contribute to the management of the tax industry both now and in the future, sir?

An important milestone for the entire tax industry in 2019 is that the Tax Administration Law No. 38/2019/QH14 was officially adopted by the National Assembly and will take effect on July 1, 2020. It must be affirmed that the new Law on Tax Administration will be the legal basis for reforms, simplifying regulations, procedures, apply risk management in tax administration, and apply electronic invoices.

In addition, to make it more convenient for taxpayers, the tax industry is also maintaining and ensuring the electronic tax system (declaration, payment, refund, tax registration) to meet the requirements of enterprises in terms of information network system, application and operation. The General Department of Taxation has also implemented the nationwide e-Tax system. This system allows enterprises to access to look up their tax declaration, payment, and tax obligations to ensure accuracy and synchronization between data of tax authorities and enterprises; in cases where an enterprise detects errors in data, it shall be promptly adjusted.

In the future, the tax industry will continue to reform and catch up with other countries in the region and the world in the process of modernizing the whole industry. The goals of this reform are: Transparent tax policy institutions; simpleadministrative procedure, scientific and in line with international practices; quality human resources, integrity; application of modern information technology, cohesion, integration and high automation. This is considered the most practical and meaningful job to support and create conditions for organizations and individuals to fulfill their obligations to the State budget.

Thank you Sir!