Need to increase deterrence in handling tax violations

On the morning of May 8, the Provincial National Assembly Delegation held a conference to collect comments on the draft Law on Tax Administration (amended). Deputy Heads of the Provincial National Assembly Delegation: Nguyen Thanh Hien and Tran Van Mao chaired the conference. Photo: Thanh Le

Anti-tax loss

Commenting on the content of the Draft Law on Tax Administration (amended), Mr. Nguyen Ho Canh (legal collaborator of the Provincial National Assembly Delegation) suggested: Article 3, Point 5 on confirming the headquarters of enterprises to serve as the basis for tax collection, needs to be more flexible so that enterprises are closely linked to their business locations and avoid tax losses.

Mr. Canh cited evidence: Nghe An has more than 30 banks operating in the area, but only Bac A Bank pays taxes to the province; enterprises exploiting natural resources and constructing works in the districts but pay taxes in Vinh city.

The conference acknowledged the contributions of delegates. Photo: Thanh Le

Sharing the same view, Chief of the Provincial People's Council Office Nguyen Van Hoa said that enterprises must declare taxes and pay taxes in the locality where they are managed to create fairness among tax-paying units. At the same time, the draft Law needs to stipulate a post-audit regime to prevent tax losses.

In addition, the regulations on tax sanctions need to be stricter because the Law only stipulates penalties for administrative violations. "The Law needs to clarify which acts are subject to administrative sanctions and which acts are subject to criminal sanctions. This will create a deterrent effect for the Tax Administration Law," said Mr. Nguyen Van Hoa.

Delegates suggested that the draft Law should separate prohibited acts in tax management for tax agencies, officials and civil servants and for individuals and organizations paying taxes.

For Article 59, Section 2 needs to clarify: The rate of late tax payment is equal to the basic interest rate of the State Bank on the late payment amount at the same time in accordance with the State's regulations on civil judgment enforcement, instead of 0.03%/day as in the draft.

The draft Law on Tax Administration (amended) has 17 chapters and 152 articles, which are being consulted with the people, the business community, research institutions, and experts. After 6 revisions, it was submitted to the National Assembly for consideration and comments at the 6th session taking place in October 2018 and is expected to be approved at the session in May 2019.

This draft Law on Tax Administration has many amendments, supplements, new regulations, and modernization of tax administration to meet the requirements of tax reform, create favorable conditions for taxpayers as well as tax administration agencies, create an open, transparent, and fair corridor, and contribute to improving the investment and business environment in Vietnam.

Clearly define measures on tax enforcement

Regarding Chapter 14 on enforcement of administrative decisions on tax management, delegates said that the 12 articles in the chapter are written quite clearly, but in reality there are still many loopholes for taxpayers to "circumvent the law", causing difficulties for tax authorities and loss of State revenue.

The declaration measures are not implemented synchronously, especially the enforcement through withdrawing money from the taxpayer's account. When the statute of limitations is still valid, the account has no money, but when switching to another measure, the money is returned to the account.

Officers of Vinh Tax Department handle tax administrative procedures for businesses. Photo: Thanh Le

Besides, the management of small-scale mineral resource traders (soil, sand, gravel) without sales invoices is causing great loss of revenue for the State.

Therefore, the content of the Law needs to be more clearly written about enforcement measures, in which priority is given to collection by withdrawing money from accounts and this measure has no time limit. Along with that, it is possible to allow the tax authority to choose another feasible measure to implement to ensure strict tax enforcement.

In addition, delegates proposed a number of issues such as: needing to classify regulations on subjects and tax payment levels that must use electronic invoices; reviewing the use of the name of the tax advisory council at the commune and ward levels, instead it should be named the tax council and the management entity is the People's Committee of the commune and ward, the budget is paid by the People's Committee and ward to increase the effectiveness and efficiency of the tax council, the responsibility of inspection and auditing; the work of authorizing collection should be undertaken by the commune and ward, etc.

Deputy Head of Nghe An Tax Department Nguyen Hong Hai gave comments at the conference. Photo: Thanh Le

Concluding the conference, Deputy Head of the Provincial National Assembly Delegation Nguyen Thanh Hien acknowledged and highly appreciated the responsible and intelligent opinions of the delegates. The opinions and suggestions at the conference will be compiled, recommended and contributed to the upcoming session of the National Assembly by the Provincial National Assembly Delegation.