According to the tax system reform strategy for the 2011 - 2020 phase approved by the Vietnam Prime Minister in May 2011, Vietnam will be rated a top country in terms of tax facilitation by 2015 and the State budget revenue to GDP ratio will reach 24 percent. Vietnam Business Forum interviewed Mr Bui Van Nam, General Director of the General Department of Taxation, on this issue. Le Hien and Thanh Nga report.
Could you please talk about the goals of the taxation strategy and plan for the next period of integration and development of Vietnam?
With respect to the tax policy, we will build and complete the tax policy system to ensure transparency, clarity, explicability and practicability; expand tax establishments to develop income sources, comprising both new and restructured sources, to increase total domestic sources (excluding incomes from crude oil) to raise tax contributions to the State Budget to over 70 percent by 2015 and over 80 percent by 2020. The budgetary revenues to GDP ratio is estimated at 23 - 24 percent in 2011 - 2015. Incomes from taxes, fees and charges will account for 22 - 23 percent of GDP. Incomes from taxes, fees and charges increase 16 - 18 percent a year, on average.
As regards tax administration, we will comprehensively modernise tax administration in both methodology and administrative procedures to reach international standards; reduce the time for carrying out tax administrative procedures to be ranked among the Top 5 countries in Southeast Asia in tax facilitation by 2015, to have at least 60 percent of companies using e-tax services, 50 percent of companies registering to declare taxes on internet-enabled systems and 70 percent of taxpayers satisfied with services provided by tax authorities in 2015.
In the past years, administrative procedure reform and modernisation has always been the key for the tax sector to perform its annual tasks. How will these goals change as we go forward?
Tax administration reform and modernisation, which also includes tax administrative procedure reform to facilitate taxpayers, is a top priority of the tax sector, defined as a condition for breakthroughs.
The tax sector applies the single-window mechanism by cooperating with planning and investment agencies (since 2006) and police force (since 2008) to grant business certificates and tax codes, thus shortening the time for granting tax codes from 30 days to just five days.
Concerning tax procedures, declaration forms and guide books for software applications for tax payment have been provided for free for tax payers to declare and submit forms via internet. The General Department of Taxation has also applied internet-enabled tax filing services since August 2009 and more than 56,000 enterprises in 41 provinces and cities have to date declared taxes electronically.
The tax sector has also constructed and deployed the "paying taxes via banks" project and signed cooperation agreements with eight commercial banks to apply the project in taxation agencies in all 63 tax provinces and cities across the country.
After nearly five years, the single-window mechanism has made positive effects and facilitated taxpayers to contact tax offices. This mechanism is highly appreciated by citizens and the business community. In addition, the General Department of Taxation has directed provincial and municipal tax departments to open websites to update legal documents concerning taxes; support enterprises to carry out tax policies; answer questions about taxes; and hold regular dialogues with local companies.
The Law on Tax Administration has been tabled for amendments and supplements to meet the development trend, especially in the context of Vietnam’s economic integration. Is it expected to support enterprises further?
To reform administrative procedures and improve tax administration efficiency, the General Department of Taxation has studied and developed criteria for classification of enterprises for easier management. Accordingly, small and medium-sized enterprises are advised to reduce the frequency of value-added tax declarations from a monthly to a quarterly basis.
The second content relates the time for settling administrative procedures at tax offices. This catches the great interest of taxpayers. The time for “check first, refund tax later” will be shortened to 40 days from 60 days from the date of receiving sufficient documents and the time for “refund tax first, check later” will be reduced to 10 days from 15 days.
The third content concerns the documents submitted by taxpayers to taxation authorities. Documents deemed unnecessary and inappropriate will be removed.
The fourth content is the remission of duties and fines. The Law on Tax Administration specifies that tax debts are written off in case a company goes bankrupt, or a person is dead, missing or loses the capacity for civil acts. In reality, some entities incur debts due to objective causes but these become heavy burden on their operations. This usually results in the suspension of debts. In addition, some entities do not pay debts they incurred more than 10 years previously, and tax authorities have used all available measures but they cannot collect. These cases will be considered for being written off.
In addition, reform contents related to international integration will be also tabled for amendments and supplements to the Law on Tax Administration.
On this occasion, many have suggested expanding the scope of collecting information about taxpayers who have income sources from foreign countries. Tax authorities may be allowed to use this source to improve the efficiency of tax management.
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