Loss of private transport tax revenue

(Baonghean) - Every year, Nghe An can collect about 30 billion VND in private transport tax, but currently due to the lack of sanctions, scattered private transport activities, and vehicle owners avoiding paying taxes, tax losses in this field are still large.

Private passenger transport vehicles operate at Vinh Bus Station.

Current situation

In recent years, freight and passenger transport business has been one of the quite vibrant service activities in Nghe An. According to statistics from the Department of Transport (GTVT), the whole province currently has 2,395 vehicles licensed by the Department, mainly vehicles belonging to companies and cooperatives. Including: 92 container trucks, 121 buses, 996 taxis, more than 1,000 contract passenger transport vehicles and the number of private transport vehicles in some districts has not been fully counted. Transport business is truly a profession that contributes to the circulation of goods, travel, job creation and income for local people, especially in places with large raw material areas and developed transport activities. However, there is still a loss of revenue from transport business taxes.

In Dien Chau, one of the localities with quite vibrant transport business activities, not counting transport enterprises or vehicles serving internal businesses, the whole district has 450 cars for transport business, corresponding to more than 400 households owning vehicles. Previously, thanks to the tax inspection teams at the Motor Vehicle Registration Center, the collection of transport business tax in Dien Chau was quite favorable. However, since April 2014, these teams have no longer been active, collecting private transport tax has encountered many difficulties; even in the second and third quarters of 2014, it was very difficult to collect tax because transport business households were no longer bound, so they avoided tax obligations. On the side of the registration agency, because they are no longer responsible for controlling transport business tax, tax collection is even more difficult for the tax agency.

Mr. Cao Van Thanh - Deputy Head of Dien Chau Tax Department said: Dien Chau Tax Department currently manages taxes for 350 vehicle owners/450 vehicles in total and 350 vehicles have registered to pay taxes. In addition to the business license tax, Dien Chau collects an average of 160 million VND in transport business tax each month. Each year, Dien Chau collects about 2 billion VND. However, one of the limitations of transport tax collection in Dien Chau is that the collection level does not reflect the actual revenue of the vehicle owners (average tax is only 500 thousand VND/month/vehicle), the situation of debt collection is still quite common. Compared to other localities, Dien Chau has quite drastic measures when based on the monitoring records of the tax team and each commune, each time the interdisciplinary team checks and handles; in case of delay, procedures are carried out to enforce. However, with the characteristics of transport business often fluctuating, if the interdisciplinary team does not operate, tax collection will immediately encounter difficulties.

Do Luong District Tax Department is currently managing and collecting taxes from 507 business owners of freight and passenger transport vehicles of all kinds, with the total amount of VAT and personal income tax collected on average per month being 465 million VND. Tax management for the transport business sector, according to Mr. Mai Van Dong - Head of Do Luong Tax Department, is currently facing many difficulties and complications, especially for transport vehicle owners in mountainous communes; light-duty vehicles, irregular small-scale business activities, and vehicles that have been bought and sold but not yet transferred.

Vinh City Tax Department currently manages 1,426 private transport vehicles, of which 1,149 belong to cooperatives and transport companies. These vehicles generally have a mechanism to collect VAT and corporate income tax, while the 277 vehicles owned by business households have tax records but are very difficult to collect. The VAT and personal income tax of these 277 vehicles is calculated at 210 million VND per month, but due to the lack of a mechanism, the collection is not complete, especially the tax debt is lingering from year to year.

Although the Tax Department has implemented a coordination mechanism with the city, ward and commune authorities, the current tax debt in this field in the city is still 1.2 billion VND. Vehicle owners who buy and sell do not declare and pay taxes, many vehicles do not take them home but leave them elsewhere, so the investigation and review work is very difficult. In Nam Dan, the tax revenue from this field is estimated at 1.7 billion VND per year, but it is also very difficult to collect. According to district leaders, every year they have to set up an inspection and review team. The district Tax Department coordinates with the police and vehicle inspection but has not yet been effective in collecting enough private transport tax.

The Law on Tax Administration stipulates that any business or any production, business or service activity that generates revenue must pay taxes. According to the provisions of the Law on Tax Administration, individuals self-declare and self-pay taxes. However, most individuals in the transportation business do not declare their revenue correctly, and their activities are scattered, causing a large loss of tax revenue. This situation has made Nghe An tax authorities very worried and have been working hard to research.

The Tax Department has advised the Provincial People's Committee to issue Decision No. 41/2012/QD - Provincial People's Committee, regulating the minimum revenue and the maximum fuel consumption cost percentage compared to the revenue of each type of car and construction machine to serve as a basis for determining the amount of tax payable. Thanks to this regulation, Nghe An has collected an additional 30 billion VND in tax from private transport each year. However, due to the amended Law on Corporate Income Tax (2014) with many liberal reforms for businesses, the regulations on raw material and fuel consumption standards have been removed, so after reviewing, the Provincial People's Committee has abolished the above Decision No. 41/2012.

Since the abolition of Decision 41/2012, it can be said that Nghe An has "lack of sticks" to deal with the collection of private transport taxes. Mr. Nguyen Dinh Hoa - Director of Nghe An Tax Department said: Since the abolition of the decision, the private transport tax collection team at the inspection stations has also had to withdraw, making tax collection even more difficult, reducing the tax amount by tens of billions of dong.

Solution

Faced with the difficulty of collecting taxes from private transport, the Tax Department issued Official Letter No. 727 dated May 22, 2014 on tax management for transport business activities so that branches and offices can collect private transport taxes from households that pay lump-sum taxes. However, according to Ms. Nguyen Thi Hong Anh - Head of the General Department of Estimates of the Nghe An Tax Department, it is very difficult to implement because there are no regulations to coordinate with the inspection agency as before, and at the same time, private transport activities with their characteristics everywhere are also very difficult to collect, (previously, when registering a vehicle, you had to pay tax in advance, have confirmation from the tax department and then carry out the inspection).

However, in some localities, there have been measures to demonstrate good management of private transport tax collection activities. Dien Yen commune - one of the communes with the second largest number of transport business households in Dien Chau with 56 transport vehicles, most of which are cargo vehicles carrying sand, stone, and gravel in the district. Mr. Duong Dang Hoi - Chairman of Dien Yen Commune People's Committee said: When the monthly transport tax was transferred to the commune, it was very difficult to collect at first. Every time tax and commune officials came to investigate and distribute declarations, households reacted, households did not bring their vehicles home, so it was difficult to determine when the householder did not declare. Faced with the above situation, the Commune Tax Advisory Council determined to persistently propagate to households to understand; in cases of intentional evasion, the commune invited them or directly reminded them. In addition, surveys were conducted, a fair and objective tax set was established and publicly announced. Thanks to that, nearly 100% of households have complied so far; On average, each year the commune collects nearly 300 million VND and is one of the communes with good tax collection achievements in Dien Chau in this field.

Learning more, we learned that the above results were achieved because Dien Yen coordinated quite closely and responsibly with the Tax Department. The commune assigned 2 officers and supported the tax officers to mobilize and collect taxes. To effectively prevent loss of tax revenue from transport business, along with strengthening propaganda and mobilization of households, it is necessary to have legal sanctions, forcing transport business households to pay taxes. In addition, between the Tax sector and the Transport sector, it is necessary to strengthen coordination, thoroughly ensuring that transport business households comply with tax payment as one of the conditions for continuing to issue business vehicles.

To strictly manage taxes in the transport business sector, the Do Luong Tax Department has coordinated with the Tax Advisory Council of communes and towns to compile a list of taxpayers, review and compare with the tax register to detect cases that have not registered, declared, or paid taxes, thereby completing tax management records in a timely manner. By means of propaganda and mobilizing taxpayers to comply with tax policies, the Department has publicly disclosed taxes in accordance with procedures, organized meetings of business lines, announced on radio stations of communes and towns about subjects that are procrastinating, have tax arrears, or have not registered, declared, or paid taxes, etc., thereby tax management has been supported by the people, and basically, business households have voluntarily declared and paid taxes in accordance with regulations. Therefore, Do Luong has collected nearly 6 billion VND in private transport taxes/year. For business households that intentionally evade tax obligations or delay paying taxes, in addition to strictly implementing the tax debt management process, the Department has coordinated with the People's Committees of communes and towns to draw up working records or administrative violation records for violators, and at the same time coordinated with the District Police and the People's Committees of communes and towns to promptly enforce tax.

According to Mr. Lang Khac Dung - Deputy Head of Vinh City Tax Department: "The propaganda work on paying private transport tax needs to further strengthen the coordination between the Party Committee and local authorities, the hamlet is very important because the work of checking, investigating, issuing declarations, declaring, and collecting taxes requires a team of grassroots cadres. The inspection agency also needs to coordinate to provide a list of vehicles to the tax agency for management. In addition, the province needs to have a document on coordination between sectors in the issue of collecting transport business tax". Talking with the leader of Nghe An Tax Department, it is known that the Tax sector is currently advising the province to issue a document to strengthen coordination and better manage this field, this is a necessary issue, because the tax revenue from transport business, calculated per vehicle, is tens of billions of VND each year.

Chau Lan - Nguyen Hai