Administrative Reforms Stepped Up in Tax and Customs Fields

According to the Public Administration Reform (PAR) Index 2014 released by the Minister of Home Affairs on September 5, which measured the public administration reform in ministries and ministerial-level agencies, the Ministry of Finance ranked second out of 19 ministries with 81.54 percent, slightly behind the top-placed Ministry of Transport by 0.29 percent. The Ministry of Finance jumped two places over 2013 from fourth position. The above result partly reflected the success of the ministry in the implementation of Resolution 19/NQ-CP of the Government, especially in administrative procedure reform in tax, customs and State Treasury sectors.

Speaking at the conference, Deputy Finance Minister Tran Van Hieu emphasised that, in order to enhance national competitiveness and support business development, the Ministry of Finance has conducted numerous administrative reforms, particularly especially tax and customs fields.

 

In affirming successful results of administrative procedure reform, he noted that the time required for tax payment of enterprises was reduced from 537 hours a year to 167 hours as of August 2015, with an eightfold reduction in VAT declaration and fourfold reduction in pro forma income tax declaration. In customs clearance, the time needed to clear customs procedures for commodities labelled green channel is just three seconds.

 

The application of the automated customs clearance system (VNACCS/VCIS) and single-window system marked an important milestone in the process of reform and development of the customs service. So far, the system had been implemented at all 34 local customs departments and 171 customs offices nationwide. More than 99.65 percent of export declarations are now completed through VNACCS. In the first year of implementation (from April 1, 2014 to March 31, 2015), a total of 56,000 companies filed 6.774 million declarations via the system and paid approximately US$271.5 million. Export tax payments have been now done automatically through the exchange of information on budget and revenues between customs authorities and commercial banks, thus enabling taxpayers to settle their tax at any time and any place. Electronic customs monitoring helps reduce congestions at port gates.

 

Along with the successful deployment of VNACCS/VCIS system and IT application in core business areas, the customs sector has strengthened the deployment of the National Single Window (NSW) and ASEAN Single Window (ASW) mechanisms. To date, the General Department of Vietnam Customs has officially connected NSW with six ministries, including the Ministry of Industry and Trade, the Ministry of Transport, Ministry of Health, the Ministry of Natural Resources and Environment, the Ministry of Agriculture and Rural Development, and Ministry National Defence. The general department is working to make preparations for the admission of the Ministry of Culture, Sports and Tourism, the Ministry of Information and Communications and the Ministry of Science and Technology. It has also prepared technical and legal conditions for the official connection with at least one ASEAN country in September 2015. Customs modernisation and information technology application results have facilitated businesses to tackle customs procedures, hence saving a lot of time in shipping commodities across borders. Specifically, on average, the present time for customs clearance of goods has fallen from 21 days to 14 days for exports and 13 days for imports. This has reduced costs by 10-20 percent as well as clearance time by 30 percent for businesses.

 

However, the administrative reform roadmap in tax and customs fields still face some difficulties in infrastructure, equipment, under-capacity transmission lines for electronic tax declaration, and psychological concerns over the degree of security and safety of electronic tax payment. Particularly, Vietnam is still relatively far behind the group of the four top ASEAN countries.

 

To address these existing problems, the financial sector needs a comprehensive assessment of administrative procedure reform and IT application in tax and customs fields to reveal difficulties in administrative reform processes to work out necessary reform requirements, according to specialists at the conference. Besides, it is necessary to clarify global IT trends in tax and customs fields and draw development experience for Vietnam.