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The Law on Tax administration created a basic legal framework and unified Tax collection management policy that complies with Tax laws and international practices. Photo: T.L

Tax policies are inconsistent

The Law on Tax administration approved by the National Assembly on 29th November 2006, took effect on 1st July 2007. After 3 amendments and supplements, the Law on Tax administration has created a basic legal framework and unified Tax collection management policy, that complies with Tax laws and international practices.

Assessing the impact of the Law on Tax Administration, the Ministry of Finance said that this was an important step, creating synchronization and enhanced transparency; Strengthened the role of inspection and supervision of the State and society in Tax administration; Created favorable conditions for taxpayers to abide by Tax law and voluntarily pay Tax amounts fully and promptly into the State budget.

On the other hand, the Law on Tax Administration has created an important legal framework for the Tax sector to accurately and promptly collect tax amounts and other amounts. Thereby, the Tax revenue is ensured and the Tax sector basically completed its tasks and exceeded the annual revenue assigned by the State. This can be seen in the annual revenue amounts, such as; VND 430 trillion in 2008, VND 454 trillion in 2009, VND 588 trillion in 2010, VND 721 trillion in 2011, VND 734 trillion in 2012, VND 828 trillion in 2013, VND 877 trillion in 2014, VND 988 trillion in 2015, VND 1.1 million billion in 2016. Especially, revenue reached over VND 1.2 million billion in 2017.

However, with the continuous development of economic institutions, over 10 years of the implementation, the law on tax administration has exposed shortcomings. According to the Ministry of Finance, provisions on Tax management has not been amended to comply with the change of policies for each tax type. In the management of tax collection, regulations on collection management policies under the new or revised laws on tax have not been unified in the Law on Tax Administration, leading to shortcomings in the tax collection organization that have not covered all revenues for expansion of the tax base. Along with that, although regulations on the IT development and application in tax administration have been promulgated, they fail to catch up with actual development of global trade transactions and fail to support well the purpose of modernization of Tax Authority.

Especially, the function and competence of the Tax authority has not been supplemented promptly with the complicated developments of Tax violations over the past time. Thus, reducing the effectiveness of fighting and handling violations, in which, handling criminal liability for violations of the law on Tax evasion or trade fraud.

Over the past time, Vietnam has signed many international treaties, multilateral and bilateral agreements in the Tax field. Therefore, some contents in the law on Tax administration have not been provided in line with international standards on tax administration to sign the Multilateral Tax Agreement and deploy the action plan on base erosion and profit shifting (BEPS). Therefore, international economic integration requires further supplementation of legal framework to strengthen international tax management and cooperation.

Also, the Ministry of Finance said that some provisions in the law on Tax administration were no longer suitable and feasible in reality, causing obstacles in the implementation, such as provisions on Tax debt management still have shortcomings for handling outstanding tax debt compared to reality. The policies on forgiving Tax debt were not in line with practice and have many obstacles for implementing it, and did not ensure fairness for tax payers.

In order to be consistent with the State management as well as market economy institutions in the current context, the amendment of the Law on Tax Administration is necessary and should be implemented soon.

Amending the law for integration

At the 12th National Congress of the Communist Party of Vietnam, the Politburo’s Resolution 07-NQ/TU dated 18th November provides policies and solutions to restructure State budget and public debt to ensure a safe and stable national finance system. Accordingly, in order to contribute to preventing the decrease of State revenue compared to the gross domestic product (GDP), it is necessary to amend and supplement the law on Tax administration to embrace revenues and expand the collection base (in the context of not revising the tax rate higher).

Over the past time, the administrative reform in the State management, including the reform of Tax administrative procedures has been implemented and achieved positive results. The reform has brought positive effects to the economy, contributing to reducing time and cost of procedures, enhancing competitiveness of enterprises and attracting foreign investment to Vietnam. These results must be improved and developed by the law. The revised Tax Administration Law aims to achieve this key objective.

According to the Ministry of Finance, the amendment and supplementation of the law on Tax administration need to ensure the goal of improving provisions on Tax administration to embrace revenues and expand collection base; enhance the capacity and efficiency of tax management to prevent tax evasion, Tax losses and tax debt; Strengthen the coordination between State agencies and organizations and individuals related to the Tax authority in the implementation of Tax law and Tax administration.

Amending contents and law articles in the direction of increasing provisions to reform administrative procedures; reforming procedures of tax management simply, clearly, transparently, and conveniently in an unified manner; Implementing e-Tax management, Tax management by risk management measures; protecting taxpayers' interests and creating a convenient environment for tax payers to abide by tax law and voluntarily pay tax accurately and promptly into the State budget.

Amending the tax laws: To Synchronize regulation of tax payment deadline VCN- At now, there have been many shortcomings in the implementation of the Law on Tax Administration ...

Amending and supplementing provisions to serve the strategy of international integration and international economic integration set out by the Party and the State. At the same time, it is to be consistent with international standards on tax and prepare legal frameworks for integration in the coming time.

The Ministry of Finance affirmed that the revised law on Tax administration will overcome obstacles that had arisen in the implementation of the law on Tax administration over the past time; Remove shortcomings and overlaps in the Tax administration system and ensure the unification with the relevant laws; Ensure the feasibility, transparency and convenience for implementing organizations.