TAX AND CUSTOMS: FURTHER POLICY REFORM FOR BETTER BUSINESS ENVIRONMENT

The Ministry of Finance recently cooperated with the Vietnam Chamber of Commerce and Industry (VCCI) to organize a dialogue conference on tax and customs policies and administrative procedures in 2020. The event attracted the attendance of nearly 500 northern enterprises.

Business companion and support

Speaking at the conference, Deputy Finance Minister Vu Thi Mai said, domestic and global social and economic development has been tougher recently due to the impact of the Covid-19 pandemic. Up to VND99.3 trillion has been already used for tax extension, exemption and reduction and VND110 trillion is estimated to be used for this purpose in 2020, of which VND80 trillion will be used to exempt tax, fees and land rents and VND30 trillion will be used for other exemptions.

The Ministry of Finance has coordinated with concerned ministries and agencies to support policies for workers and people badly hit by the Covid-19 pandemic. Up to now, 12.79 million people affected by the Covid-19 pandemic have been supported a total of VND12.69 trillion.

Despite emerging difficulties in 2020, the State budget revenue collection still basically met expectations, she said. The fiscal revenue to the gross domestic product (GDP) in the 5-year period from 2016 to 2020 was about 24.5%. The tax and fee revenue to the GDP was about 20.4%.

The increasingly sustainable tax and fee revenue guarantees development investment and helps strengthen social security and national security. Deputy Minister said that these positive results have a great contribution from the business community.

Representing the business community, Mr. Hoang Quang Phong, Vice President of VCCI, said that the business community has always recognized strong reforms of the Ministry of Finance, particularly by the tax and customs sectors, for better support for, sharing with and guidance to businesses. They have helped enterprises properly and promptly correct their mistakes. In particular, a lot of complaints filed by enterprises have been resolved to bring great peace of mind to the business community. Tax and customs authorities have applied advanced information technology to carry out procedures and greatly support enterprises to overcome difficulties and stand firm amid the Covid-19 pandemic.

Existing problems

Although it is clear to see positive effects of conferences and business support in the context of the Covid-19 pandemic, tax and customs policies and administrative procedures must be continually improved and updated in time to match actual requirements while business activities of enterprises are always very vibrant and diversified, she added. Therefore, difficulty is certain when tax and customs policies and administrative procedures are applied to practice.

At the dialogue, Mr. Pham Minh Khoa, Director of An Phat Trading and Investment Support Co., Ltd., said that his company has been operating for eight years and getting refunded in 31 periods of value added tax. Documents for the refund are the same in all 31 periods and tax authorities conduct thorough inspection before making a refund. If the company is accused of wrongdoing, will tax officers who checked and refunded the tax for the company in previous periods be held responsible?

In case the inspectorate intentionally falsifies documents filed, refuses evidence provided by the company and transfers the case to the police force for investigation, the time to get tax refund will be interrupted and prolonged. If the company is proven to have no violations, who will be responsible for compensating for all economic and reputational damages of the company and how will the officers who deliberately falsified records that result in to this damage be disciplined? Currently, are there any communication channels for businesses to know that foreign partners are operating or have stopped working?

With respect to tax regulations in Decree 126, Mr. Le Hoang Tung, Chief Accountant of Vietcombank, asked how commercial banks will provide customers' account information? What are their obligations to withhold tax on income from electronic transactions on Google and Facebook platforms? Meanwhile, commercial banks are just payment intermediaries that just provide payment services. Therefore, in reality, banks and payment intermediaries lack information to determine the source of income to determine whether it is subject to tax obligations or not. It is difficult for banks to fulfill this obligation. Much more detailed guidance on this regulation is desperately needed.

Mr. Dang Ngoc Minh, Deputy General Director of the General Department of Taxation, answered that the Law on Tax Administration stipulates that commercial banks are responsible for providing taxpayers' account data for tax authorities. To carry out this regulation, tax authorities will require banks to provide an account for specific cases and subjects in the given order. In the coming time, the General Department of Taxation will coordinate with the State Bank of Vietnam and credit institutions to promulgate regulations and procedures for providing customers' payment account data.

“In order for policies to be truly effective in practice, the Ministry of Finance hopes to receive more candid and constructive contributions for tax and customs policies and procedures from the business community to reform and improve them towards more transparency and specificity, help taxpayers fulfil tax policies quickly and conveniently. This will help us encourage investment, encourage export and match international practices and international commitments to economic integration in the region and the world of Vietnam,” said Deputy Minister Vu Thi Mai.

Source: VCCI