Amending the Law on Tax Administration: Meeting the requirements of modern tax administration

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Tax operation at Ha Noi Tax Department. Photo: Internet.

In the spirit of inquiry

Stemming from the goal of preventing revenue loss but still creating favourable conditions for businesses and taxpayers, after developing the draft law in the end of 2017, the Ministry of Finance sent the revised draft law to ministries, sectors and agencies for consultation. In addition, it has coordinated with the Vietnam Chamber of Commerce and Industry (VCCI) and the Tax Consulting Association to hold seminars on the revised draft Law to get comments from the business community. The revised draft Law is also posted on the electronic portals of the Government, the Ministry of Finance, and the General Department of Taxation to gather comments from people and businesses. As a result, the Ministry of Finance received hundreds of valuable comments from agencies, businesses and people to improve the draft Law.

Cao Anh Tuan, Deputy Director of General Department of Taxation, Head of the Law Drafting Group, said the revised draft Law was built on the basis of reviewing and studying Vietnamese and foreign laws and international treaties related to tax administration. After gathering comments, the draft has been supplemented and amended to meet the requirements of administrative procedure reform, facilitate taxpayers and meet the requirements of modernisation of tax administration. Tuan said the Law Drafting Group has received and studied comments of experts and the business community during finalising the draft law.

Dau Anh Tuan, Head of VCCI’s Legal Department, said the amendment to the Law on Tax Administration will have great impact on businesses, because the reform, frequency of declaration, e-transaction and documents with relevant agencies is significant. Therefore, the draft law specifies key contents such as the promotion of e-transaction, e-invoice, e-tax refund, tax declaration and accounting that will directly affect enterprises. For the drafting agency, the amendment to the Law on Tax Administration is a remarkable achievement and amended problems to be consistent with the Government’s requirements on administrative reform and the development demand of enterprises.

“The Drafting Committee and the General Department of Taxation are very inquisitive and open-minded in collecting comments of businesses and impact objects. Therefore, the Committee’s performance in a transparent manner will meet demand and desire for changes in tax administration of enterprises,” Tuan said.

Basically agree

Evaluating the revised draft law at the seminar on the revised law on Tax administration and Resolution on handling irrecoverable tax debt held in February 2019, Chairman of the National Assembly Finance-Budget Committee Nguyen Duc Hai highly appreciated the inquiries of the Ministry of Finance in reviewing and receiving comments of experts, scientists and businesses to complete the draft Law. On the basis of opinions of National Assembly deputies, drafting agency and verification agency coordinate with relevant agencies to receive and explain opinions of National Assembly deputies and reported to the Standing Committee of the National Assembly for recommend.

Hai said that the Standing Committee of the National Assembly agreed with contents explained by verification agencies and the drafting agency. However, the drafting agency should further study the specificity and consistency of the law on Tax Administration with the Customs Law and the Law on Administrative Violations, the Law on Complaints and Denunciations; on tasks, competencies, and responsibilities of the State Audit Office; on tax consultation councils of communes, wards and townships; competence to write off tax debts and late payment fines.

In March 2019, assessing the content of the draft revised Law on Tax Administration, Member of National Assembly Finance-Budget Committee Tran Quang Chieu appreciated the amended and supplemented contents in the draft. Chieu said the revised contents in the draft met new requirements on tax administration and basically removed shortcomings in the current Law. Specifically, the amendments and supplements to the taxpayers' rights; responsibilities of tax administration agencies, concerned ministries and sectors; apply information technology to tax administration; supplement regulations on anti-transfer pricing.

Chieu also pointed out one of the notable contents of the draft Law to allow taxpayers to declare and calculate, pay and make tax finalisation by themselves and must be responsible for the tax payable. The tax administration agency is responsible for checking and inspecting to determine the tax payable amount, and not distinguish enterprise size. If the enterprise dissolute or bankrupt, tax payer must be responsible for tax finalisation and send them to the tax authorities for certification.

In addition, the regulation on the implementation of risk management mechanism in tax administration also contributes to improving the responsibility and awareness of taxpayers, reducing the burden on tax administration agencies and strengthening the post-inspection. Currently, this is the general trend of many countries in tax administration.