Will business households declare taxes like enterprises?

These are two new points, according to Mr. Luu Duc Huy - Director of the Policy Department, General Department of Taxation (Ministry of Finance), in the draft revised Law on Tax Administration that will be submitted by the Government to the National Assembly at the session this October.

Mr. Huy said this bill aims to reform administrative procedures, shorten tax payment time, and manage taxes more effectively.

Households with revenue from 3 billion VND/year will declare tax

* How is the tax management content for business households revised and will it prevent negativity, harassment, and "snack-taking" by some tax officials?

- The new bill stipulates that households with no more than 10 employees and a maximum revenue of 3 billion VND/year in the fields of agriculture, forestry, fishery, industry and construction; 10 billion VND/year in the fields of trade and services must follow the accounting regime and pay tax declaration instead of lump sum as before.

Business households that meet the criteria of micro-enterprises but "hide" from becoming enterprises will have to apply the accounting and tax regime like enterprises. Applying tax declaration as mentioned above helps tax management for production and business activities of large-scale households to be more transparent and effective.

As for smaller-scale households, the contract system will still be used as before and will be made public at the commune and ward headquarters, tax offices, markets, etc. so that households and individuals can monitor each other and prevent tax losses, so tax management will certainly be better.

Business households that meet the criteria of micro-enterprises but "hide" from becoming enterprises will have to apply the accounting and tax regime like enterprises.

* Many opinions say that we should not focus too much on business households and micro-enterprises because their contribution to the budget is not much?

- It is true that the contribution of households and individuals to the state budget is not large, only 2-3% of the total tax amount despite the large number. But there are also opinions that we still lose revenue from this business household and the tax sector must have measures to prevent it. And the application of accounting and tax declaration regimes for households like enterprises is to ensure transparency in tax management. On the other hand, the Government is encouraging households to establish enterprises and micro-enterprises, so this regulation is also in line with the enterprise development policy.

* The total tax arrears of the country to date have reached more than 82,000 billion VND. To reduce tax arrears, will the tax penalties be increased?

- The Ministry of Finance does not increase the level of administrative penalties for tax violations because the current penalties are already quite severe. Specifically, if you declare taxes incorrectly, you will be fined 20% of the amount payable, plus a late payment penalty of 0.03%/day. In case of incorrect declaration leading to tax evasion, you will be fined 1-3 times the amount of tax evaded. For example, if Mr. Nguyen Van A declares 1 billion VND less, he will be fined 20% of 1 billion VND, which is 200 million VND, and will be fined 0.03% of the amount of tax underpaid each day, which is 300,000 VND, and will be fined 1-3 billion VND more for tax evasion.

The bank provides the account number for the tax

* Why do commercial banks have to provide customers' account numbers to tax authorities?

- Based on comments, the new bill only requires banks to provide account numbers associated with customers' tax codes, not account balances and transaction information as before. The purpose is also to better manage taxes, ensuring correct and sufficient tax collection for the state budget.

For example, in the case of a taxpayer who owes tax to the extent that it requires enforcement, the tax authority will have to take measures to freeze the account or withdraw money from the account. In reality, a person can open an account at many banks, but without their account information, it is impossible to collect taxes in cases of procrastination or intentional tax evasion.

* In what cases does the tax authority require commercial banks to provide customers' bank account numbers?

- Referring to the experience of other countries, most of them require banks to provide the customer's account number associated with the taxpayer's tax code to the tax authority. In our country, this is only done when requested by the tax authority. Or in cases where there are signs of tax risks, banks also provide the taxpayer's payment transactions.

It is expected that when the law comes into effect, the tax authority will guide taxpayers to add accounts at banks and banks will be responsible for providing the tax authority with accounts corresponding to the customer's tax code, so that later the tax authority will have taxpayer data.

* Is it guaranteed that account information will not be leaked or disclosed?

- I would like to reaffirm that when provided with an account number corresponding to the taxpayer's tax code, it is only for better tax management, and the responsibility of the management agency is to keep this information confidential.