Resolution 19-2017/NQ-CP: Tax reform into reality

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The Taxation should reform policies and administrative procedures drastically. Photo: Thuy Linh.

Comprehensive reform

In Government Resolution No. 19-2017/NQ-CP in 2017, targeting to 2020, Taxation should perform comprehensive solutions on administrative reform which focuses on removing difficulties for production and business of enterprises. The most important goal of Taxation is to achieve the average level of ASEAN-4 on tax administration reform including 3 indicators: Tax refund and risk management, tax inspections; timing and results of tax complaints. Taxation must strive for the time of tax payment of less than 119 hours per year, and to 2020, the maximum time of tax payment will be 110 hours per year. Also, Taxation needs to continue to improve financial institutions and financial services to create a fair business and investment environment for enterprises and citizens.

Speaking to a reporter of the Customs Newspaper, Mrs. Nguyen Thi Cuc, the Chairwoman of Tax Consultants’ Association said that in recent times, Taxation had made relentless efforts to meet the requirements of Resolution 19, which was appreciated by the Government and the business community. In the period 2014-2016, the General Department of Taxation strived to reduce the time of tax payment to 117 hours in line with the objectives set out in Resolution 19-2017/NQ-CP. According to the business environment report in 2017 published by the World Bank (WB) in October 2016, the index of ease of paying taxes in Vietnam was improved significantly compared to previous years, but the time of tax payment remained at a high level. According to Mrs. Nguyen Thi Cuc, the cause of the above difference is that in the report of the business environment in 2017 (assessment results for 2015), the World Bank ranked countries only for 2 criteria (VAT refund and inspections of corporate income tax). However, currently, Taxation is assessed on the basis of 4 criteria: times of tax payment, time of tax payment, the total tax rate and index after declaration. Along with that, the assessment of the WB was released 2 years later, so many Taxation reforms have been implemented, but not yet recorded.

"Although the target is quite difficult to meet according to the WB, the time of tax payment in Vietnam has been reduced significantly. Therefore, I think the goal in 2017 can be achieved if Taxation can implement policy reforms and administrative procedure reforms drastically", Mrs. Cuc said.

Effectiveness from policies to practice

In accordance with the goals set out in Resolution 19-2017/NQ-CP on Taxation, in the draft Action Program, the General Department of Taxation has issued a number of solutions to implement the objectives of Resolution No. 19-2017/NQ-CP including: Solutions to achieve the objectives of supporting and removing difficulties for enterprises in the field of production and business; solutions to achieve the target of ASEAN-4 on tax administration reform; solutions related to the implementation of online public services at level 4, including IT application in the declaration, payment and electronic reimbursement at the rate of 95%; and solutions on reduction of tax payment, development of Taxation systems; implementation of value-added services for electronic transactions; revision of administrative reforms in State agencies under the Ministry of Finance. According to the leaders of the General Department of Taxation, in order to perform these jobs, Taxation should focus on reviewing tax policies to remove shortcomings and drawbacks.

Mrs. Nguyen Thi Cuc said: "Administrative reforms should focus on 3 main contents: Institutional policies, management technology for IT application and organizational structure. In particular, we should focus on the "core area" of Taxation, including VAT refunds, publicity of data on tax refund; and tax reimbursement in accordance with the Law. Also, we need to conduct tax administration on the basis of the level of risk management, the level of law observance of taxpayers and the validity of economic transactions. For institutional policies on business, we should reform towards simplification and transparency. In addition, Taxation also needs to build institutional policies in line with international practices on the basis of modern processes, particularly IT application in databases on tax accounting".

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Mrs. Cuc stressed that in accordance with Resolution 19-2017/NQ-CP, the relevant Ministries and Departments are determined to set out the objectives and measures to meet the goal. However, Taxation should focus on conducting these measures drastically, ensuring effectiveness from policies to practice, appreciated by people and the business community. Thus, the goal of improving the business environment and enhancing the competitiveness of the Government will achieve good results.