Proposing Tax authority to collect compulsory social insurance

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Proposing Tax authority to collect compulsory social insurance for employers. Photo: Internet

According to the Ministry of Finance, in order to meet the requirements of society on strengthening administrative reform and international economic integration, the collection and management of tax and social insurance of Tax authority are in line with the current trend in the world. Some countries in Europe have applied this model. Therefore, between 2 solutions presented by the Ministry of Finance, it prefers the solution of the tax authority collecting compulsory social insurance for employers.

The Ministry of Finance has assessed that the positive aspect of this project is to reduce the quantity of declaration submitted to the State agency. Instead of submitting tax declaration and social insurance declaration to 2 different agencies, now only 1 declaration is required. For this project, the personal tax code can be used as the code of social insurance, social insurance book, and health insurance card. This can simplify procedures in tax and social insurance management, declaration and payment.

The Ministry of Finance said that the project would help to reduce management cost of the State agencies. There was only one agency to inspect and audit employers in the implementation of policies on Tax and social insurance.

However, for negative aspect, the Ministry of Finance also acknowledged that in the initial period of transferring the task of collecting social insurance to the Tax authority, the Tax sector needs to firmly grasp the insurance collection. Besides, it is necessary to restructure the apparatus of 2 authorities and the number of laborers transferred after the transformation of the model.

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Besides the project proposed by Ministry of Finance, it also proposed to retain the current policy that tax and insurance still managed by 2 authorities. For this project, the Ministry noted that the Tax authority and Insurance authority collaborate to collect and manage under coordination agreement signed by the General Department of Taxation and Social Insurance of Vietnam.

The representative of the Ministry of Finance said that the collaboration between 2 authorities has achieved certain results. However, it has not achieved as expected. The reason is that the Tax authority and Insurance authority had many differences such as the time of Tax declaration and payment and the basis to calculate personal income tax and social insurance. Because there are so many differences leading to the ineffective coordination.