Enhance the role of tax agents

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Tax agents are considered as “pro-longed arm” between Tax Agency and taxpayers. photo: Thuy Linh.

According to the current Law on Tax Administration, Tax agents only provide services related to tax procedures and are not allowed to provide other services such as accounting service. This raises a lot of shortcomings for enterprises wanting to use services such as accounting and tax declaration because they must hire 2 units at the same time (one provides tax service, the other provides accounting service). This is costly for enterprises, because enterprises which use these services are normally small and micro enterprises.

Regarding this issue, Mrs. Nguyen Thi Thuan, Director of Science Institute of Small and Medium Enterprise Management under the Vietnam Association of Small and Medium Enterprises said that one of the obstacles for why business households do not want to become enterprises is the complicated and costly accounting and taxation.

"Having not opened as an enterprise, business households do not have to think of hiring employees specialized in professional activities, tax, and accounting. But as an enterprise, if they recruit accountants who have just graduated from universities, those accountants may not work effectively but are paid a salary of around VND 5-7 million VND. If they still operate as business households, they shall operate as normal and shall be guided by tax officers for calculating tax payable every several months. As a result, small and micro enterprises typically want to hire a full service package including accounting and tax declaration," Mrs. Thuan shared.

According to the General Department of Taxation, the Ministry of Finance plans to set up a separate accounting regime for small and micro enterprises with a simple and easy accounting system. Consequently, those who have tax agent certificates can be sufficiently qualified to provide accounting services for small and micro enterprises. In order to ensure the development of the tax agent system and to facilitate and reduce costs for small and micro enterprises in compliance with accounting and tax law, it is necessary to expand the scope of services of tax agents.

In addition, to ensure the approved development target of the tax agent system in the Tax System Reform Plan 2011-2015 and the Tax Agent System Development Plan until 2020, which is to build the tax agent system to become a bridge between Tax Agency and tax payers, it is necessary to expand and diversify the services of the tax agents.

To do this, in the draft Law on Tax Administration (revised) the General Department of Taxation has amended and supplemented the function of organizations of tax procedure-related services with the objectives of: Expanding the scope of services by tax agents and specifying the scope of service provision towards adding content of tax consulting service and accounting service for small and micro enterprises.

Also, in order to simplify administrative procedures and create favourable conditions for tax agents, the draft Law has been amended towards only re-phrasing the regulation to "the procedures for registration of tax agent services" instead of “Application for certificates of eligibility for tax service business" as before.

However, this content is also causing controversy because some people say that it will affect accounting providers. According to Bui Thi Le Phuong, Director of Centech Finance and Tax finalization company, if the Law on Tax Administration adds functions to tax consultancy organizations, it will conflict with the many circulars issued by the Ministry of Finance on improving the quality of the accounting service and enhancing the integration of the accounting service in the region.

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At present, the General Department of Taxation and the Ministry of Finance are continuing to collect comments on the contents of the draft Law on Tax Administration (revised), including contents related to the scope of services of tax agents.