Taxation Service with 60 Years' Development

On the occasion of the 60^th anniversary of the Vietnamese financial sector, VIB Forum interviewed Nguyen Van Ninh, director of the General Department of Taxation, about the service’s contributions to Vietnam’s socio-economic development and its preparations for forthcoming international integration.

During the renovation process, the taxation service provided advice to the Party and State in developing a system of taxation policies, which has basically covered the economy’s revenue sources to complete a target of mobilising financial resources for development as assigned by the Party’s ninth congress. Tax has become an important tool for the State to regulate the economy, following its socialist orientations, encouraging investment and economic restructuring, boosting exports and international economic integration. A unique taxation policy system has been applied to all economic sectors, creating an equal competition environment.

 

Effective activities of the taxation service can be seen via the great results in financial resource mobilisation for the 2001-2005 period, which exceeded the target assigned by the Resolution of the ninth Party Congress. Revenues reached 23 per cent of Vietnam’s GDP, on average, higher than a target of around 21 per cent of GDP. Tax and fee revenues account for over 95 per cent of total State budget revenues. The annual growth rate reached 17.1 per cent. This figure in three years, from 2003 to 2005, reached 20 per cent. The contribution of non-oil domestic revenues of total budget revenues increased from 50 per cent in 2000 to 55 per cent in 2005. Therefore, the State budget can afford current expenditures of the State with an increase in development investment and foreign debt payment. Budget deficits are under control. Administrative reform has been promoted with simplified procedures. Accordingly, taxpayers can calculate, declare and pay their tax to the State Treasury. This has created more favourable conditions for taxpayers while helping the taxation service collect taxes precisely as stipulated by the law.

 

However, there are still some shortcomings in the service’s activities as the existing taxation policies have yet to cover all revenue sources while State protection has yet to be made suitable for promoting domestic production. Some taxation policies are issued in combination with social policies, so that the independence of the taxation policy system has been reduced. Furthermore, tax management mechanisms don’t yet encourage taxpayer’s legal responsibility. The socio-economic environment has not improved in a manner that facilitates tax management. In addition, the service’s technology and equipment have not been modernised in order to meet the requirements of the new period.

 

Having considered enterprises ‘fellows’ in observing the State’s taxation laws, over the past few years, the taxation service has improved its operations. Accordingly, the service has boosted the education and dissemination of taxation policies and laws on the mass media and provided free guidelines on taxes for enterprises and taxpayers to help them have better understandings about the taxation laws.

 

At the same time, administrative procedures have been simplified and amended to match with business activities of taxpayers. With taxation policies publicly announced on the mass media, taxpayers can more easily access information about tax payment. We have regularly organisated dialogues between taxation agencies and enterprises to help the taxation service understand the difficulties facing enterprises, thus working out solutions to help them.

 

In recent years, the taxation service has proposed that the State honour organisations and individuals, who recorded outstanding business and production achievements, and tax payment, a move highly appreciated by all involved.

 

This, in turn, has strengthened the relationship and understandings between taxation agencies and enterprises.

 

The taxation service has promoted its reform of the taxation system throughout 2010 as assigned by the Government. Concretely, in 2005, the laws on import, customs and special consumption will be amended and supplemented to meet the international integration process’s requirements. We will consider proposing that the Government issue regulations on allowing the establishment and operation of domestic and foreign tax consulting agents in Vietnam.

 

We will continue to build and perfect the existing taxation policies, modernising taxation management to ensure financial resources for the country’s industrialisation and modernisation process.

 

We will improve taxation management capabilities to the same level as other countries in the region. At the same time, we will continue to promote the dissemination and education of taxation laws and policies to organisations and individuals, encouraging them to perform their responsibility as stipulated by the law.