Amending the Law on Tax Administration: Improving the role of banks in e-commerce tax management

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How do you evaluate tax administration in general and e-commerce tax administration in particular of tax authorities?

Our tax administration in recent years has achieved many positive changes in the organization, administration and supervision and the management of revenues from taxes, fees and state budget revenues according to the law. At the same time, the reform of tax administrative procedures ensure mobilization of financial resources, state expenditures and facilitates taxpayers to abide by obligations to the state budget.

In addition to the results, the tax administration still has a number of shortcomings, tax revenue losses and failure to meet the tax administration requirements for certain new business types such as e-commerce. The IT application to tax administration has brought important results. However, there is a shortage of databases to determine revenue, costs, business results, taxpayers' taxable incomes, in particular, databases related to tax management for electronic commerce and transactions, which have not been specified. Sharing and connection of databases between relevant management agencies is not effective, such as the connection with credit institutions and units with payment functions to determine sales from selling goods and services is insufficient and weak. Tax administration has not reached the practical development of global trading of goods and services.

In order to enhance e-commerce tax management, the draft Law on Tax Administration (revised) stipulates that the State Bank has responsibility for directing commercial banks and credit institutions to coordinate with tax authorities in providing customers account information. What is your assessment on this content?

In Vietnam, trading of goods via the internet, social networks, even online TV are quite rich and diverse. Currently, we also have a circular regulating e-commerce business but it has not been included in the law. E-commerce business is growing, so the tax management for this activity needs to be regulated. This ensures both revenue for state budget and equality between traditional business and e-commerce business.

There are two issues in tax revenue management. The first is how to gain revenue; the second is how to collect tax. In my opinion, for revenue management, there must be coordination with banks. For now, the supply of value-added services from Vietnamese people to foreign websites is often paid via banks. This shows that the role of banks in determining transactions, thereby determining tax obligations for e-commerce activities is very important.

The current Law on Tax Administration only stipulates that banks must provide customer account information (individual) if taxpayers commit a violation, for other cases the Law does not stipulate. Therefore, the inclusion of the duties, powers and responsibilities of commercial banks in providing customer information into the Law on Tax Administration (revised) is essential for e-commerce tax management.

When collecting comments on the content of responsibility of commercial banks in providing account information as well as automatically deducting tax debts of taxpayers, tax agencies have encountered many conflicting opinions. Why is there such a situation?

There are some comments from banks that customer information is confidential, so it cannot be provided to tax agencies. However, the current Law on Tax Administration regulates that tax agencies are responsible for securing information of taxpayers. So, the customer information provided by banks to the tax agencies will also be secured.

The problem here is that after including the content into the Law, the General Department of Taxation and the State Bank need to have close coordination regulations and clarify the responsibilities of each party in information exchange. The State Bank must direct commercial banks and credit institutions to provide customer account information to tax agencies; and tax agencies must keep customer information secret.

It is expected that in the next National Assembly session, the revised Law on Tax Administration will be submitted by the Government to the National Assembly for approval and will officially take effect from July 1, 2020. Do you have any expectations about e-commerce tax management when this Law comes into effect?

The amendments and supplements to the Law on Tax Administration are to improve contents on developing databases in general and commercial databases in particular on electronic transactions.

With these regulations, the tax administration function throughout the stages will be clearer and more transparent for more effective tax management.

Receiving comments amending the Law on Tax Administration: Clarifying the responsibilities of relevant agencies VCN - Receiving comments from the Standing Committee of the National Assembly at the 31st Session on ...

The management of the database and the exploitation of the database related to e-commerce activities to determine tax obligations is required. Therefore, the provisions on responsibilities of the related ministries and sectors as mentioned in the draft revised Law on Tax Administration has improved the legal basis for tax management for e-commerce activity.

Thank you, Madam,