Improving the efficiency of tax administration

In recent years, the tax self-declaration of enterprises has had many advantages in terms of administrative procedures. However, there were some enterprises did not perform tax declaration, or committed tax evasion. On the other hand, tax collection still encounters some difficulties, affecting budget revenue. Therefore, the empowerment of tax management to Tax Department according to Circular No. 127/2015 / TT-BTC of Ministry of Finance will consolidate inspection and control to each business in the province.

Many efforts

Since 2013, implementing PPC’s policies on decentralization of tax management of non-state-owned enterprises with registered capital of VND 50 billion or more to Tax Department, Tax branches in districts, towns and city were assigned to manage totally 1,030 enterprises. The decentralization has helped enterprises to quickly receive instructions in accordance with actual situation from local tax branches; thereby, enterprises were enabled to actively arrange their schedule, works. In addition, tax branches were able to utilize sources of revenue, effectively perform tax administration, contributing to provincial budget revenue increase.

The assignment of tax administration is an important step in administrative reform, facilitating tax payment, stimulating business activities. Image: Korean companies gave opinions on tax administrative reform at the latest dialogue with Korean firms investing in Binh Duong province

Huynh Dinh Tri, Deputy Director of Tax Department, said efforts to reform tax administration procedure, tax declaration, tax administration, and tax payment have been generally appreciated by enterprises. However, while collecting taxes, the sector still faced problems that need to be addressed. According to Mr. Tri, the tax reform and modernization requires modern information technology applications to quickly serve the needs for information updating, exchanging between tax authorities and businesses. However, currently, IT equipment of tax branches is asynchronous, and network congestion often happens when receiving large data from enterprises, affecting tax declaration and payment of other enterprises. On the other hand, the number of tax payers is on its rise, which is the main cause leading to insufficient facilities for tax administration.

Mr Tri said the organizational structure of this sector was also a problem. Some tax branches do not have inspecting competence, thus as detecting tax evasion or tax frauds, the branches must forward files to Tax Department for inspection. Tax arrears management and enforcement also faced difficulties while tax debts of enterprises in the province are increasing. Tax arrears of non-state-owned enterprises were relatively large, while tax managing staff was too thin to recover all tax debts.

Bettering tax administration

Tax revenue from non-state-owned enterprises has played an increasingly important role to tax bureaus in the country. In Binh Duong, in recent years, due to efforts of tax managing staff, tax revenue from these enterprises have increased over the years. In 2015, total tax revenue was estimated at VND24,000 billion, increasing 6.67% year-on-year. However, there were some non-state-owned enterprises did not complete their tax obligations. After tax examination in 2014, the sector recovered over VND 126 billion / 1,759 non-state-owned enterprises.

To address this, on Aug 21, 2015, Ministry of Finance issued Circular 127/2015 / TT-BTC to guide the automatic issuance of identification number for businesses and assign tax agencies to manage businesses. Accordingly, provincial Tax Department developed decentralization criteria of tax management to businesses operating in Binh Duong province.

According to leadership of Tax Department, based on these decentralization criteria, tax revenue will be allocated depending on administrative boundaries, while the assignment of tax administration will not affect local budget revenue. It is encouraging that the tax administration reassignment to non-state-owned enterprises was approved by the 18^th session of the eighth Provincial People’s Council. This will reduce administrative procedures to businesses; create favorable conditions for tax payers to quickly fulfill tax obligations, bringing the most efficient tax administration in the future.

Reported by T.Hong – Translated by Ngoc Huynh