Drafting amended Tax Administration Law: strengthen competence of leader of Tax and Customs sector

This draft is a continuation for regulating more specifically about the competency of the tax authority as well as facilitating taxpayers. Photo: TL

This draft is a continuation for regulating more specifically about the competency of the tax authority as well as facilitating taxpayers.

Ensuring the right of taxpayers

In the draft of amended Tax Administration Law, the rights of taxpayers have been stipulated more clearly and specifically. Taxpayers have a right to know the time for settling tax refunds; the amount of tax which hasn’t been solved for refund and legal basis for the amount of tax which hasn’t been solved for refund.

At the same time, the draft Law also supplements a regulation about time of tax dossier submission and electronic tax payment vouchers in cases of technical problems: The time limit for submission of standard charge declaration dossiers; time limit for additional declaration; deadline for tax payment and the accounting for late payment of tax amount via additional declaration,… to ensure uniformity, clarity and transparency between taxpayers and tax authorities.

Remarkably, the draft Law on Tax Administration has supplemented the regulations related to tax management for commercial activities toward the direction of building databases and widely deploying electronic tax services such as; electronic tax, electronic invoice and online tax payment.

The draft law also supplemented provisions on responsibilities of ministries, branches, organizations and units related to e-business activities of organizations and individuals with tax authorities such as the State Bank; commercial banks, Ministry of Industry and Trade, Ministry of Information and Communication, Ministry of Public Security ...

Strengthen the powers of the Tax authorities

The current tax administration law stipulates that if taxpayers pay tax late compared with the prescribed time limit, they will be charged with a late payment fine of 0.03% per day. This provision applies to taxpayers who are: No longer entitled to collect taxes; who have just died or are legally deceased, missing or have lost their civil capacity to act; who have left their registered business addresses, enterprises waiting for dissolution, insolvent enterprises and those that have already had their business registration certificates revoked by business registration authorities.

Due to this regulation, it has led to the amount of late tax payment of subjects that are ineligible for tax collection up to 31/12/2017, of 10.465 billion VND. The amount of debt which is monitored on the books of the tax authorities are virtual debt because of the inability to recover. This virtual debt has put pressure on costs and human resources of tax authorities in monitoring tax debt management. Therefore, it is necessary to write off the debt and the amount of late tax payment of the above taxpayers in order to decrease the number of virtual debts.

This amended draft Law on Tax Administration has supplemented the regulation on the authority to remove tax arrears, late payments and fines towards the direction: The Director General of Taxation and the Director General of Customs are able to remove tax arrears in cases where taxpayers owe amounts of tax, late payments and fines of between 1 and 5 billion VND. Directors of Tax Departments and Customs Departments shall be entitled to absolve payment of debts for cases where taxpayers owe an amount of tax, late payment and fine is under 1 billion VND.

Supplement the regulations on electronic invoices and vouchers

On the basis of the Ministry of Finance’s draft proposal of a Decree on electronic invoices to the Government for consideration of issuance, the draft Law also supplemented regulation of electronic invoices and vouchers. According to the General Department of Taxation, the reason for supplementing the regulation on electronic invoices and vouchers is that the current regulation for printing, publishing and using invoices is built basically for managing paper invoices.

The appliance of electronic invoicing, especially electronic invoices with a Tax authority identification code, has in recent times shown that it helps in reducing time for implementing administrative procedures of enterprises and tax authorities; reducing cost for enterprises; improving the situation of fake invoices, fraudulent invoices; reducing the cost for the benefit to the whole of society...