Electronic Value Added Tax Refund: A new move towards the transparency of the tax sector

Enterprises will no longer have to go to the tax authorities to submit, supplement the VAT refund dossier as before. Picture: Thuy Linh.

Benefits for parties

Electronic VAT refund is an electronic public service that allows the tax sector to receive the dossiers and return the results of VAT refund dossiers electronically. In addition to providing electronic services which receive dossiers and return the results to taxpayers, the tax agency’s system also has internal processing functions such as monitoring, issuing decisions, or informing, ... to facilitate enterprises as well as support the tax agency to well manage the VAT refund. The dossiers, documents, notices, and decisions related to the process of handling tax refund dossiers of taxpayers are sent to tax offices or vice versa via the electronic information gate of the General Department of Taxation will bring many benefits to the parties.

Being one of the first two pilot locations for tax refunds, the Hanoi Department of Taxation can see the benefits clearly. According to Mr. Vien Viet Hung - Deputy Director of the Hanoi Department of Taxation, the electronic tax refund is an advanced method, creating a great advantage for businesses with many utilities. Enterprises submit the entire dossiers of tax return via online, including additional records. The tax office does not require enterprises to send paper documents, except for the case that enterprises need to submit too much paper or enterprises themselves do not know how to update that they can bring to the tax authorities for guidance. The electronic mode is completely implemented in the network environment, helping businesses save costs, travel time, direct contact, reduce annoyance, the negative, waiting time...

Agreed with him, Mr. Le Ngoc Tru, Head of the Hai Phong Department of Taxation, said that through the method of an electronic tax refund, tax officials and the business community have been approached and familiarized with the new service, have changed the way of processing records under the modern, transparent direction. In particular, it has contributed to simplify procedures for a tax refund, facilitate the taxpayers, save time, costs for enterprises, creating conditions for businesses to improve competitiveness. After more than 4 months of pilot implementation, the electronic tax refund service has brought many benefits for enterprises and taxpayers.

However, according to Mr. Vien Viet Hung, although the application of electronic tax refund is the process of facilitating enterprises, it is creating a great pressure on the tax authorities. Unlike the procedures for declaring, filing and paying taxes mainly on the activities of enterprises (self-declaration, self-submission, less intervention from tax agencies), a tax refund is the handling process of tax agencies, is the spending of the state budget. The inspection, supervision is done directly by the tax officers that requires enterprises to update more frequently and with greater risk, with six days of paying for post-inspection records and 45 days of record checks.

On the other hand, Mr. Le Ngoc Truc said: Some enterprises are not familiar with the use of new services, so they are not confident. Some technical issues related to the application system are not stable, which affect partly on the time of receiving and returning dossiers of taxpayers...

In order to overcome the situation above, local tax units of the pilot application have assigned their staffs directly to provide professional guidance for enterprises and taxpayers, and to report the difficulties to the General Department of Taxation for timely support in terms of application and technology, help taxpayers for peace of mind to use services and timely serve the dossiers for electronic tax refund of enterprises.

Smooth deployment

Nguyen Dai Tri, Deputy General Director of the General Department of Taxation, recently, the General Department of Taxation has launched the services to 13 provincial tax departments, including Ho Chi Minh City, Hanoi, Hai Phong, Dong Nai, Binh Duong, Da Nang, Can Tho, Quang Ninh, Kon Tum, Khanh Hoa, Vinh Phuc, Binh Thuan, Thai Nguyen. In May 2017, the General Department of Taxation also completed the training for localities and expanded the scope of service throughout the country, with each province selected 50 suitable taxpayers to apply for the electricity tax refund. Expected, on August 1, 2017, the electronic tax refund will be officially applied to all enterprises. At the same time, the tax authorities will continue to coordinate with the State Treasury to develop and link the information technology application system between the two branches, allowing the tax office to send the refund decision and the electronic return order by online method to the Treasury agency and tax authorities receive the results of the refund from the Treasury agency. Thus, enterprises will only need to send electronic refund records to the tax office and receive fully the results of processing electronic tax refund by the tax authorities (from the stage of submission of refund request) and the Treasury agency (to the final settlement of dossiers, payment of tax refund by the Treasury agency).

To facilitate the implementation of electronic tax refunds, the leaders of the General Department of Taxation have requested localities, after completing the training, they should immediately perform the work related to the implementation of electronic tax refund such as establishing steering committees, deployment teams, support groups, assigning specific tasks to each department, selecting taxpayers to participate in the pilot under the guidance of the General Department of Taxation, planning to train taxpayers and tax staffs. Tax departments should also coordinate with the mass media to spread information widely in the local media to raise awareness of taxpayers of the electronic tax refund services, from that to receive the largest support from the taxpayers; improve the awareness of initiative and willingness of taxpayers in submitting tax declaration dossiers to ensure that they are declared a timely, complete, accurate, transparent and stable manner. "On that basis, the tax office will have enough conditions and database to be able to solve the tax refund dossiers and return the results of tax refund quickly and in time," Mr. Tri emphasized.

To unify the implementation, the General Department of Taxation requires the selection of enterprises in the expansion period must meet the criteria such as a history of good observance of tax law in general and VAT refund in particular; have made electronic tax declaration, electronic tax payment through electronic portal of the General Department of Taxation; taxpayers regularly submits a dossier of request for VAT refund in the case of export refunds, refunds of investment projects on a monthly or quarterly and receives the refunds via bank accounts already registered with tax offices.

Although the pilot stage has started and expanded, the electronic tax refund has brought some positive effects, promoting transparency and limiting negative aspects of tax refund on the reviewing of a tax refund as before. That proves that electronic tax refund is really one of the effective solutions for tax reform, which will greatly improve the business investment environment in accordance with the goals of Resolution No. 36a and Resolution No.19 that the Government has set.

Roadmap for implementing electronic tax refund:

- On December 27, 2016, the Ministry of Finance issued Decision No. 2790/QD-BTC on the pilot application of receiving dossiers and return the results of solving the VAT refunds by electronic methods. Accordingly, from January 9, 2017, it implements the pilot application of electronic tax refund services in Hanoi and Hai Phong.

- Since March 1, 2017, the General Department of Taxation has expanded its pilot implementation in 11 provinces and cities including Ho Chi Minh City, Dong Nai, Binh Duong, Da Nang, Can Tho, Quang Ninh, Kon Tum, Khanh Hoa, Vinh Phuc, Binh Thuan, Thai Nguyen.

- On April 24, 2017, the Ministry of Finance issued Decision No. 710/ QD-BTC on the receipt of dossiers and return results of VAT refund by electronic methods. Accordingly, from May 15, 2017, the General Department of Taxation expands its application on the entire country, initially, each Tax Department selected 50 eligible taxpayers for electronic tax refund service.

- Expected on August 1, 2017, if under all favorable conditions, the General Department of Taxation will officially carry out electronic refunds nationwide with all enterprises.