Social Insurance - Nghe An Tax Department: Coordinate to ensure workers' rights

(Baonghean) - After more than 2 years of implementing the coordination regulations between the two sectors of Social Insurance and Tax in Nghe An province, the results achieved are very clear, contributing to more closely and accurately managing tax and social insurance payers; limiting tax evasion and social insurance debt...

Although since 2009, the Provincial Social Insurance and the Nghe An Tax Department have proactively developed Regulation No. 671/QCPHLN dated July 9, 2009 on coordination of work and provision of information to improve the effectiveness of the implementation of the Law on Personal Income Tax, the Law on Corporate Income Tax, the Law on Social Insurance, and the Law on Health Insurance, at that time, the coordination only stopped at exchanging general information about economic organizations that had registered tax codes between the two sides; coordination in inspection and examination work was not carried out regularly; the implementation of coordination between the Tax Department and Social Insurance of districts, cities and towns was still limited.

This reality poses an urgent need to establish regulations for information exchange and closer and more accurate coordination between tax payers and social insurance payers; limit tax evasion and social insurance debt; promptly detect and prevent cases of abuse and fraud such as deducting social insurance money to calculate taxes but not paying social insurance...

The provincial Social Insurance inspection team worked at Viet Tien Investment and Trading Joint Stock Company (Vinh City).

By December 2014, the Regulation on coordination between Vietnam Social Security and the General Department of Taxation was issued, creating a legal corridor, "untangling" the Social Security agencies and Tax Departments of localities, including Nghe An. Immediately after that, Nghe An Social Security actively researched and coordinated with the Tax Department to develop a coordination regulation between the two units. This coordination regulation opened a new phase of cooperation, creating a basis for continuing to reform administrative procedures in both the fields of Tax and Social Security; better protecting the rights of employees and businesses.

According to the signed regulations, the two agencies must actively exchange and provide information on organizations and individuals paying income from wages, participating in compulsory social insurance contributions and paying taxes, managing the collection of compulsory social insurance, health insurance, unemployment insurance and managing tax collection; at the same time, exchanging tax codes for use in managing organizations paying income participating in social insurance. Along with that, the Social Insurance and Tax Departments of 21 districts, cities and towns have promptly signed coordination regulations in June and July 2015.

Over the past 2 years, the coordination, exchange and provision of information between the two sectors has been carried out quite smoothly. Accordingly, periodically according to the coordination regulations, the Tax Department and the tax branches of districts and cities have provided a list of income-paying organizations that have been granted tax codes and are currently operating; provided a list of income-paying organizations that have been newly established, dissolved, bankrupt, ceased operations, temporarily suspended operations, or abandoned their business addresses; the number and list of employees in income-paying organizations, the compulsory social insurance deductions that income-paying organizations include in expenses for tax calculation; provided a list of income-paying organizations in the approved inspection and examination plan in accordance with specific regulations...

In parallel, in 2015 and 2016, the provincial Social Insurance provided the Tax Department with a list of income-paying organizations participating in social insurance, the number of employees participating in social insurance, the salary fund contributing to social insurance, and the amount of social insurance contributions for 14,850 units.

Mr. Ngo Xuan Dung - Deputy Head of Debt Exploitation and Collection Department, Provincial Social Insurance said: Every year, based on the list of income paying organizations under tax management provided by the Tax Department, the Provincial Social Insurance has reviewed and identified 2,947 income paying organizations that have registered tax codes but have not participated in social insurance for employees with a number of 42,911 people.

Since then, the Social Insurance sector has made efforts to promote propaganda, mobilize, and guide units to register for social insurance for employees in accordance with legal regulations. In 2015, 338 more income-paying organizations registered for social insurance for 5,031 employees; in 2016, 1,479 more income-paying organizations registered for social insurance for 11,878 employees.

In addition to the remarkable results, there are still limitations in coordination work, requiring the thorough participation of both sectors. According to the assessment, on the part of the Tax Department, although the list of newly established, dissolved, bankrupt, inactive, and business address-less income-paying organizations has been provided to the Social Insurance every quarter, in reality, some organizations have changed information about the number of employees, contact addresses, and phone numbers but have not notified the Tax Department, so the information provided has not been updated accurately, the data provided by the Tax Department and the data of some district tax branches are still inconsistent due to different reporting times. In addition, at the district level, there is still direct exchange or written documents, which is quite time-consuming and limited in the amount of information conveyed.

The "key" to solving these limitations is identified as information technology, especially in the coming time, when the goals set in the coordination between the two units are increasingly facing many practical challenges.

Mr. Le Truong Giang - Director of the Provincial Social Insurance said: "The best solution to increase coordination efficiency is to soon build and deploy interconnected software; exchange information through an automatic connection system, develop a centralized data system between the Social Insurance agency, Tax, Department of Planning and Investment. At the same time, build a process to grant tax codes to income-paying organizations according to regulations, use tax codes in tax collection management and mandatory social insurance payments".

Phuoc Anh