Endeavour for Equal Tax Declaration Time to Average of ASEAN+6

In recent years, the reform of tax administrative procedures has been carried out regularly and continuously by means of simplifying tax forms and records in accordance with Project 30; building software and tools for tax declaration and settlement; deploying electronic tax and others. However, the number of hours spent on paying taxes and social insurance in Vietnam are still more than other countries. According to the World Bank (WB), Vietnamese companies spent 872 hours a year on tax and insurance payment, of which 537 hours is used for tax payment and 335 hours is for social contributions (inclusive of social insurance, health insurance and unemployment insurance).

 

Ms Hoang Thi Lan Anh, Deputy Director of Reform and Modernisation Department under the General Department of Taxation (Ministry of Finance), said Vietnamese companies spend more time on tax issues than those in ASEAN+6 countries because they need a lot of time to prepare documents and records to calculate taxes, sort VAT invoices and other forms, compare payment documents and customs declaration forms, etc. E-tax declaration has been launched but remained non-mandatory however.

Resolution 19 is a sweeping reform package aimed to improve the business environment and enhance the competitiveness of Vietnam by cutting costs, time and risks of doing business in Vietnam. One of the objectives of Resolution 19 is to make Vietnam on par with ASEAN+6 countries in terms of underlying business indices. After issuing Resolution 19, the Government promulgated the Directive 24/CT-TTg dated August 5, 2014 on enhancing the management and reform of administrative procedures in tax and customs fields. Regarding tax declaration and payment processes and procedures, the directive demands cutting the time required for tax declaration and payment to the average level of ASEAN+6 countries. By the end of 2014, up to 95 percent of companies will declare tax payments via electronic means, 15 out of 63 provinces and cities will deploy electronic tax payment; and, in 2015, all 63 provinces and cities carry out this method. These changes are aimed at reducing a half of time required for tax payment and to 171 hours a year, the average level of ASEAN+6 countries by 2015.

Resolution No. 19/2014/NQ-CP of the Prime Minister dated March 18, 2014 requires reducing the number of hours for tax declaration and payment to 171 hours in 2015 as that in ASEAN+6 countries. It means that the time for tax and insurance payment must be reduced by 701 hours, based on data from the WB. Ms Lan Anh said, to accomplish this objective, the Ministry of Finance and the General Department of Taxation have reviewed all legal documents, reported to the Government on solutions to amending legal documents to simplify policies and procedures, minimise differences in corporate tax and accounting regulations; step up information technology applications to serve 95 percent of companies performing electronic declaration forms by the end of 2014, enhance auditing and examination to prevent tax losses, raise the publicity and transparency of tax administration, internal control and supervision of the service of tax authorities and officials.

 

In addition, the Ministry of Finance and the General Department of Taxation suggested the Government and the National Assembly widen the scope of subjects applicable to quarterly VAT declaration by raising the revenue of VND20 billion a year to VND50 billion and abolish the regulation that businesses have to adjust input VAT when they do not have payment documents via banks at the time of maturity. Corporate income tax needs to be paid once a year and companies will self-calculate estimated advance payment.

 

On the other hand, the Ministry of Finance is drafting revised circulars for six circulars (Circular 156/2013/TT-BTC, Circular No. 111/2013/TT-BTC, Circular 219/2013/TT-BTC, Circular 08/2013/TT-BTC, Circular No. 85/2011/TT-BTC, and Circular No. 39/2014/TT-BTC), expected to come into force in October to reduce the time for tax payment.