Last updated: Saturday, April 22, 2017
Tax, Customs Administrative Procedures Need More Drastic ReformPosted: Wednesday, March 22, 2017
A recent workshop on business satisfaction with reform of tax administrative procedures in 2016 held by the Ministry of Finance in cooperation with the Vietnam Chamber of Commerce and Industry (VCCI) and the World Bank (WB) reported a relatively positive appreciation of the business community in tax and customs sectors. The Ministry of Finance issued action plans and drastically and synchronously implemented those across in the financial sector, especially tax and customs systems.
Assisted by the WB, the cooperation and sharing of the business community, the Ministry of Finance modified and simplified administrative procedures to reduce tax payment duration. Up to now, the time required for settling tax payment in a year was 117 hours, a sharp reduction of 420 hours. In 2016, the Ministry of Finance abolished 32 tax administrative procedures, including 13 procedures at department level and 19 at sub-department level. At the same time, tax agencies strongly applied information technology to tax collection and payment to further shorten the time and expense of tax payment and help taxpayers to get their jobs done.
Up to now, 99 per cent of companies registered to declare tax online with 35.4 million dossiers filed; more than 96 per cent registered to pay taxes online; and nearly 94 per cent completed tax collection service registration with banks. More than 2 million electronic tax transactions were successfully concluded with a total tax value of over VND404 trillion.
Particularly, the customs sector finalised, added some contents and sent them to the Prime Minister to sign and issue the master plan on implementation of the National Single Window (NSW) and the ASEAN Single Window (ASW) mechanisms for the period of 2016-2020. To date, 10 out of 14 ministries have got connected through NSW with 36 administrative procedures, and more than 200,000 applications filed by 8,200 companies were handled on the portal. As a result, the time of fulfilling customs procedures and export-import procedures has been significantly slashed.
Mr Vu Tien Loc, VCCI President, said, the financial sector still needs intensive reform and has to add more efforts for this. At an event of announcing the Provincial Competitiveness Index (PCI) 2016 in mid-March 2017, surveys showed that administrative procedures relating to tax, social insurance and customs remained the biggest concerns of foreign-led enterprises. Although tax and customs indicators improved to 30 and 25 points respectively, companies still had to spend over 10 per cent of their time in a year to study administrative procedures. This was a worrisome tendency, even while the Government had continuously taken positive moves to accelerate the reform of administrative procedures in Vietnam, most remarkably Resolution 19 and Resolution 35, the results of administrative reform remained below expectations.
For the tax sector, the electronic tax system still posed certain difficulty to enterprises. For example, 12 per cent of companies still fraught with registration of first-time online tax payment services. Up to 64 per cent of taxpayers complained that data transmission lines frequently congested and 8 per cent said it was expensive to use digital signatures. Sometimes, tax authorities refused to answer questions via telephone but required companies to go to tax offices although issues were very simple and insignificant. With tax administrative procedures reformed, 41 per cent of respondents still bemoaned troubles they faced with tax procedures. Report formats are often changeable, time-consuming and cost-extensive. At present, VAT refund procedures got better, but about 3 per cent had to wait for 90 days to get the tax refunded. Especially, some waited a year to receive the refund. Companies also expressed displeasure of being visited and inspected too many times by tax authorities. During their visit and inspection, companies had to give facilitation payments in order to avoid having business operations interrupted. Report formats are often changeable, time-consuming and cost-extensive. At present, VAT refund procedures got better but about 3 per cent had to wait for 90 days to get the tax refunded. Especially, some waited a year to receive the refund. Companies also expressed displeasure at being visited and inspected too many times by tax authorities. During their visit and inspection, companies had to give facilitation payments in order to avoid having business operations interrupted.
In 2017, the customs sector will further diversify its information exchange channels so as to engage the business community in contributing opinions and drafting tax regulations and documents; extend the scope of applying electronic procedures to procedures such as cargo management at seaports; administer goods stored in warehouses and priority areas; and control commodities with peculiar specifications. With these efforts, the time for handling customs clearance procedures will be reduced to less than 36 hours for exports and 41 hours for imports in 2020, while cutting administrative compliance costs by 10 per cent a year.
To achieve these goals, the General Department of Vietnam Customs will further carry out such works as applying specialised inspection, as well as NSW and ASW mechanisms. According to a high-ranking official from the General Department, this will be a heavy task as it touches many ministries and sectors, but it must be accelerated to catch up with internal economic requirements and pressures of free trade agreements (FTAs). Presently, only 36 procedures are being carried out via the NSW, but the target is having 137 sets of procedures there in 2017.