Tax administrative procedure reform: Striving to achieve "dual" goals

(Baonghean) - 2014 is a year with a special mark for tax system reform. Tax authorities are implementing the "dual" goal of tax administrative reform to save time and costs for people and businesses, contributing to improving the investment and business environment. Nghe An Newspaper had an interview with General Director of the General Department of Taxation Bui Van Nam about this "dual" goal, respectfully introducing it to readers.

PV:Dear Director General, why does the General Department of Taxation identify this as a "dual" target?

Comrade Bui Van Nam:The “dual” goal is that the Tax sector is striving to reform to reduce the number of tax compliance hours of enterprises according to the assessment of WB-IFC from 872 hours/year to 171 hours/year according to Resolution No. 19/2014 of the Government; at the same time, striving to achieve the goal of the Tax System Reform Strategy approved by the Prime Minister. Besides focusing on implementing revenue management and preventing State budget losses, the whole sector has focused on promoting administrative procedure reform, supporting and removing difficulties for people and enterprises. Some of the results achieved also make us quite satisfied: Before 2015, the General Department of Taxation advised the Ministry of Finance to issue a circular amending and supplementing 7 circulars, and submitted to the Government to issue a decree amending and supplementing 4 decrees; The Government has submitted to the National Assembly a law amending and supplementing a number of articles of 5 Tax Laws to amend, supplement, and simplify tax policies and administrative procedures for enterprises.

Mr. Bui Van Nam - General Director of the General Department of Taxation

The solutions implemented in 2014 focused on a number of contents considered essential. For example, regarding VAT, with the revised regulations in Circular 119 and Circular 151 guiding Decree 91, VAT declaration by enterprises has been much simpler. Basically, the information that enterprises must declare only for tax purposes has been eliminated, such as information on invoice form symbols, invoice symbols, items... or the regulation that enterprises must record payment deadlines on invoice lists and adjust input tax amounts in cases of late payment...

In addition, the declaration form is also simpler, enterprises do not have to declare information and indicators that are not related to the tax calculation of the enterprise such as invoices for the purchase and sale of goods and services that are not eligible for tax deduction, invoices that do not have to be compiled into the declaration, or declare information that the tax authority cannot check or compare directly on the file such as the list of goods and services enjoying a 0% tax rate, the list of invoices for cars, motorbikes, etc. Thus, enterprises will save a lot of time to prepare tax declarations, just need to transfer data from the accounting software to complete the tax declaration without having to enter additional indicators.

PV:What have these solutions saved taxpayers, sir?

Comrade Bui Van Nam:From January 1, 2015, the Tax sector has removed the regulation that enterprises must send a list of invoices for purchased and sold goods and services along with the VAT declaration to the tax authority as prescribed in Law No. 71/2014/QH13, creating fundamental changes in tax management. Enterprises will save costs and time in preparing, submitting and printing the lists. As for the tax authority, behind the simplification of tax policies, forms and tax declaration documents is a huge change in management techniques. Especially for VAT, management techniques have also changed from invoice-based management (enterprises must declare all invoices, whether tax deductible or not; tax authorities check, cross-check, verify invoices... which is very costly) to managing risky subjects; and synchronously implement tax management, inspection and audit work based on recording and accounting books of enterprises to simplify administrative procedures for enterprises but still prevent and combat revenue loss and fraud in tax deduction and refund.

Regarding corporate income tax, regulations on policies and procedures have also been simplified. Revenues and expenses that are temporary differences between accounting and tax have been eliminated, such as internal consumption; many expenses such as promotions, discounts, rebates, hospitality, etc. are no longer controlled when calculating taxable income, making it easier for businesses to open additional books to monitor and calculate... In particular, the declaration of corporate income tax has also been significantly amended, in that businesses only have to declare and settle corporate income tax once a year; during the year, businesses only have to temporarily pay tax without having to make a temporary payment declaration to send to the tax authority. According to calculations, with the solutions issued in these legal documents, by January 1, 2015, the number of hours for paying tax is expected to be reduced by about 370 hours.

Since the beginning of the year, based on the results of implementing Resolution No. 19/NQ-CP in 2014, in 2015, the General Department of Taxation continues to focus on reviewing and perfecting legal documents on tax in order to reduce administrative procedures and reduce the number of hours required to comply with tax for people and businesses. We have submitted to the Ministry of Finance for issuance of a circular guiding the implementation of a law amending many laws on VAT, invoices, natural resource tax and tax management. According to calculations, the amendment of administrative procedures in this circular has reduced another 10 hours related to the content of simplifying invoice procedures for declaring and deducting VAT of businesses. Or as we have submitted to the Ministry for issuance of a circular guiding the implementation of the content on corporate income tax. According to calculations, the amendment or abolition of corporate income tax declaration procedures under this Circular will reduce about 30 hours for taxpayers.

In addition to policy solutions, the General Department of Taxation also promotes the application of information technology to save time and costs for enterprises, while limiting intervention and direct contact between tax officials and enterprises in the process of tax declaration and tax calculation. As of June 30, 2015, tax declaration via the Internet has been implemented for 98% of enterprises under tax management; many tax departments have well organized the implementation and a large number of enterprises in the area have made tax declarations online, reaching a rate of 100%. At the same time, agreements were signed with 27 commercial banks to implement electronic tax payment in 63 localities nationwide. As of June 30, 2015, 301,993 enterprises had registered to participate in electronic tax payment, reaching 68.7% of the target assigned to tax departments with the amount paid to the State budget from the beginning of 2015 to June 30, 2015 being 35,119 billion VND.

Thus, up to now, with the above-mentioned implemented solutions, the number of tax payment hours will be reduced by more than 50 hours (in total, in 2014 and the first 6 months of 2015, 420/537 tax payment hours of enterprises have been and will be reduced), achieving and exceeding the target set by Resolution No. 19/NQ-CP of the Government on reducing the number of tax payment hours for taxpayers to less than 121.5 hours in 2015.

PV:So what will be the solutions in the coming time, comrade?

Comrade Bui Van Nam:To continue reforming administrative procedures to facilitate taxpayers and at the same time achieve the goals set by the Government, in the coming time, the General Department of Taxation will synchronously implement many solutions. Specifically: We will deploy IT applications, ensuring that 100% of enterprises declare taxes via the Internet (electronic tax declaration) with quality. Upgrade IT applications to ensure infrastructure and technology; strengthen coordination with commercial banks; perfect institutions and legal framework;... at the same time, research and deploy electronic declaration and tax payment for registration fees when organizations and individuals register cars, motorbikes, houses and land,...; personal income tax on real estate transfers; revenue from house rental activities;...

The Tax sector will also continue to review, amend and supplement tax management processes, especially those related to handling administrative procedures for taxpayers to comply with newly amended and supplemented legal documents, contributing to ensuring the reduction of time for tax administrative procedures, improving the effectiveness and efficiency of tax management. We will apply IT at level 4 (receiving tax refund dossiers online and returning tax refund results electronically online) to at least 95% by September 30, 2016. At the same time, build and publicize a unified nationwide centralized database of tax refund dossiers, carry out centralized monitoring of the entire system and database of taxpayers to serve tax inspection and examination based on risk assessment, thereby preventing fraud, tax evasion, preventing revenue loss, and preventing VAT deduction and refund fraud.

PV:Thank you very much, comrade!

Red River

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