State of mind and position of taxpayers changed, strengthen the trust in authorities

Assoc.Prof. Dinh Trong Thinh

The Tax Management Law of 2019 has been approved by the National Assembly, with many points considered breakthroughs compared to the current Law. How did you evaluate the importance of this law?

The reform of the tax system was an urgent requirement, especially with Vietnam becoming a signatory country quickly and fully implementing a series of free trade agreements (FTAs) with many regions and countries around the world. Therefore, the reform of the tax system is a mandatory requirement that the tax authorities in particular and the state management agencies in general need to look forward to. The Tax Management Law of 2019 was an important step for tax authorities to reform their tax policy and obtain the tools for managing better tax collection and payment.

In this law, the new provisions as well as regulations about the time limit and methods of tax calculation are relatively specific, clear, public and transparent. Regarding the content of tax management, the Tax ManagementLaw 2019 stipulated 11 groups of management content. Besides the contents specified in the current Law ofTax Management, the new law amending and supplementing the important and necessary contents with current practice such as: no tax collection; moratorium; apply invoices and documents; international cooperation on tax and propaganda, supporting taxpayers.

The Tax Management Law 2019 also stipulated some prohibited acts such as colluding, linking and covering between taxpayers and tax officials and agencies in order to transfer prices and evade taxes; causing trouble and harassing taxpayers; intentionally failing to declare, or declaring inadequate, timely and inaccurate payable tax amounts; selling goods, providing services without invoices as prescribed by law and using illegal invoices.

In particular, this Law has set out many principles in tax administration, that are: all organisations, households, business households and individuals are obliged to pay taxes in accordance with law; tax management must ensures publicity, transparency, equality, the rights and interests of taxpayers; apply tax management principles in accordance with international practices, including operational principles, transactions that determine tax obligations; risk management principles and other principles in accordance with the conditions of Vietnam.

This is a relatively clear and complete law on tax management in recent years. This law should continue to improve in many different angles during the implementation process.

When the Tax Management Law of 2019 was approved, many taxpayers expressed happiness because at the provisions of the law, the position of taxpayers is higher than before. What is your opinion on this issue?

The Tax Management Law 2019 has many new points related to the rights and obligations of taxpayers. In particular, it focused on some key points: Extending the time for submission of personal income tax finalisation from 90 days up to 120 days; extend taxpayers' rights; allow tax agents to provide accounting services for micro businesses if they meet the prescribed conditions.All the point are stipulated specifically. From that, this helps the coordination between tax authorities and taxpayers happen more easily, conveniently and transparently.

In particular, clear regulations from papers, processes and conditions help taxpayers feel secure and avoid harassment from tax officials. Since then, the state of mind and position of taxpayers are also better. This is very important and meaningful to changing the minds and feelings of taxpayers, helping taxpayers feel their position and responsibility to society and the country. If taxpayers trust State authorities more, they will be more self-aware in paying taxes, cuting the phenomenon of evading tax obligations, helping the State budget reduce loss of revenue and make tax collection more stable and more timely.

One notable point in the Tax Management Law 2019 was the content related to e-commerce tax management. Are the provisions of management methods and coordination among many stakeholders in the law correct and sufficient?

The management of e-commerce tax on digital platform was clearly paid attention to by tax authorities as clearly shown in the new law. However, this was a relatively new field and wasgrowing very fast and diverse so it is neccessary to regular monitor, graps, manage and have measures to amend regulations of tax authorities. If asking the provisions of the Tax Administration Law 2019 related to e-commerce tax, I asserted that it was correct. And if asking whether it was enough and sufficient, I would like to say that it was not enough. The reason was that e-commerce was growing day by day, hour by hour and changing quickly. Therefore, if it was only based on hard regulations, tax authorities would never be able to cover all this field.

Therefore, the law also stated it would assign the Government to provide further guidance on this content. What needed to be done by the tax authorities was to regularly monitor and study the facts, thereby adding new regulations on management and declaration in order to effectively combat loss of tax revenue. In particular, they must coordinate closely with the relevant agencies such as: Network operators, Ministry of Information & Communications, State Bank, commercial banks to have accurate and completeinformation hub and additional information to the tax authorities in management.

What do you expect when the law comes to life, its impact on the tax management, businesses and taxpayers?

By July 1, 2020, when the Tax Management Law of 2019 takes effect and comes to life, it would partially change the way of behaving and working between tax agencies and taxpayers, strengthen the capacity of tax authorities, improve trust and cooperation between taxpayers and tax authorities. In particular, this law would also enhance transparency in State management activities.

Thank you!