Strengthening inspections to combat tax evasion.

(Baonghean)In 2012, despite the economic downturn, the tax inspection work of Nghe An province was resolute and effective, inspecting 107 units, collecting back taxes and imposing penalties totaling over 69 billion VND, reducing losses by 31 billion VND, and decreasing the number of tax refund requests by 673 million VND…

From the beginning of the year, after analyzing information and data related to taxpayers, assessing their compliance with the law, verifying and collecting evidence to determine violations of the law, or complaints and denunciations, the Nghe An Tax Department has planned inspections of the subjects requiring inspection. One of the key requirements is that the inspection activities do not hinder the normal operations of the agencies, organizations, and individuals who are taxpayers, while complying with the provisions of the law.

Tax officials from Vinh City inspect compliance with tax laws at Trung Thanh Company (Vinh City).

In fact, in 2012, the Nghe An Tax Department implemented a plan to inspect each business sector, while also strengthening and accelerating inspections, thus contributing to the completion of the department's budget revenue plan. Throughout the year, the Tax Department inspected 107 units, achieving 100% of the plan, equivalent to 105% compared to 2011, collecting, refunding, and imposing penalties totaling 69.014 billion VND; of which 58.2 billion VND was collected and refunded, and 10.06 billion VND was imposed as penalties, averaging 690 million VND per unit. Through inspections, losses were reduced by 31 billion VND, and the amount of requested refunds was reduced by 673 million VND. The collection of outstanding tax debts and penalties through inspections was high, reaching over 80%. Any unit that was delinquent was transferred to the Tax Debt Management Department for enforcement according to regulations. Coordination with the Police in crime prevention was also improved. The Tax Department directed its branches and offices to transfer files of units showing signs of criminal activity for investigation and handling, such as: selling invoices, absconding with invoices, establishing businesses for the purpose of buying and selling invoices illegally, and fleeing the business area to evade tax debts. It also directed its offices and branches to handle units using illegal invoices from Cua Lo Gas Station and Anh Tuan Service and Trading Company Limited (Hung Nguyen Town) for tax declaration and administrative violations. During the year, the Nghe An Tax Department also transferred files of 5 network operator agencies that evaded taxes totaling 5.843 billion VND, discovered through inspections, to the police for investigation.

Regarding this issue, the leader of the Nghe An Tax Department stated: “In cases where tax audits uncover tax evasion with signs of criminal activity, within ten working days from the date of discovery, the tax authorities will transfer the file to the competent authority for investigation in accordance with the provisions of criminal procedural law. Tax audits will be conducted in the following cases: for businesses with diverse business activities and a wide scope of operations, an audit will not exceed once a year; audits will be conducted when there are signs of violations of tax laws; to resolve complaints or denunciations; or at the request of the head of the management agency at all levels or the Minister of Finance.”

Currently, a limitation of inspection work is the prolonged post-inspection processing due to policy and regulatory obstacles. In addition, during the inspection process, the preparation of inspection documents, such as compiling minutes confirming detailed data and comparing tax authority management data with declared and settled figures, remains complicated in some units.

In 2013, the Nghe An Tax Department strived to improve the quality of analysis, develop inspection plans, accurately identify inspection areas, shorten inspection time at businesses, and ensure no entities requiring inspection were overlooked. Simultaneously, it intensified self-study and research to enhance professional skills and develop innovative approaches for effective inspection work.

Photo credit: Tran Chau