Proactively mobilizing financial resources from the budget to modernize tax management

The Ministry of Finance proposes to allocate no more than 1% of the budget revenue to modernize the tax sector's IT. Photo: ST

Proposal to allocate no more than 1% of the revenue estimate to modernize the IT of the Tax sector

The Ministry of Finance has emphasized the need to modernize the tax and customs administration system, focusing on IT infrastructure upgrades, digital transformation, staff training, technology transfer, and enhanced taxpayer support as outlined in the Tax and Customs Modernization Strategy to 2030. Besides that, to effectively support economic and social development and fulfill government mandates, the General Department of Taxation and the General Department of Vietnam Customs are tasked with a substantial workload, often requiring immediate responses to emerging issues. Without dedicated financial resources from the state budget, the agencies' ability to modernize, invest in IT applications, and undergo digital transformation will be hindered. This could adversely impact the provision of online public services and compromise the security of taxpayer and e-invoice data.

To address this, the draft amendments to the Law on Tax Management introduce provisions to promote digital transformation and leverage e-invoice databases for effective tax compliance management.

Accordingly, the draft supplemented clause 1 of Article 11 outlines the need to accelerate digital transformation, regulate e-invoices, and utilize e-invoice databases for tax compliance oversight. The draft stipulates that the state will ensure adequate financial resources to implement these modernization efforts, based on the prevailing economic and social conditions. A portion of the state budget, not exceeding 1% of the annual budget approved by the National Assembly, will be allocated to fund IT systems, digital transformation, e-invoices, infrastructure, and specialized tasks related to tax administration. The government will issue detailed regulations to implement these provisions in accordance with the Law on the State Budget, the Law on Public Investment, and other relevant laws.

The Ministry of Finance clarifies that this provision does not introduce a new special financial mechanism but rather guarantees the necessary resources for modernizing the tax and customs administrations in line with the country's economic and social development. Annual budgeting, allocation, execution, and auditing for these modernization efforts will comply with the Law on the State Budget, the Law on Public Investment, and the Law on the Management and Use of Public Assets. To ensure efficient resource utilization, annual budgets for modernization will be determined based on actual needs, implementation capacity, and disbursement capabilities, while strictly adhering to the prescribed limits.

Modernization is not only for the internal use of the Tax and Customs sectors

The proposal to allocate budget funds for modernizing tax administration aims to strengthen the legal basis for using e-invoice databases to encourage consumers to request invoices when purchasing goods or services. This, in turn, will help change consumer habits, protect consumer rights, and foster a transparent business environment.

According to the Ministry of Finance, modernizing IT systems, digital transformation, electronic invoicing, infrastructure, and specialized tasks for tax administration is intended to provide better services to taxpayers, businesses, and organizations. These modernization efforts are ongoing and aim to ensure the stability, upgrading, and timely updating of systems across all tax and customs agencies. This will allow tax administration to be implemented more quickly and conveniently for taxpayers, thereby contributing to economic and social growth.

The Ministry of Finance asserts that modernization is not solely for the benefit of tax and customs agencies. The primary objective of investing in tax administration modernization is to serve the public, businesses, and related organizations by providing quick, convenient, secure, and confidential services that minimize the influence of subjective factors from tax officials. These services will be delivered using modern equipment and continuously updated technologies. Modernizing tax administration also helps ensure the collection of state revenue as planned by the National Assembly, supports fiscal policy implementation, and contributes to macroeconomic stability in line with the Prime Minister's directives.

In relation to this matter, at the August financial and budget coordination meeting, the Director General of Taxation, Mai Xuan Thanh, announced that the General Department of Taxation will continue to focus on promoting the application of IT in tax administration processes. Specifically, the department will continue to develop applications for provincial tax departments, with a particular emphasis on the E-tax mobile application. Due to delays in personal income tax refunds that have caused public discontent, the General Department of Taxation will pilot automatic personal income tax refunds and gradually expand to automatic VAT refunds when conditions permit. This will reduce the burden on tax officials and shorten processing time for businesses.