Reform tax system, ensure a sustainable budget revenue structure

Vu Xuan Bach make a speech at the Vietnam Financial Forum 2021

Speaking at the Vietnam Financial Forum 2021 held on November 16, Vu Xuan Bach, Deputy Director General of Taxation, said that the global economy in the 2021-2030 period would continue to experience complicated developments, and the possibility of recovery was not clear. In this context, in order to move towards a sustainable state budget revenue structure, the tax sector plans synchronous reform of the tax system in both tax policy and tax administration.

Regarding tax policy reform, the Deputy Director General of Taxation said that the tax sector set a goal of continuing to improve the tax policy system in association with restructuring state budget revenue in the direction of covering all sources of revenue, expanding the revenue base, and especially new sources of revenue. At the same time, it is also necessary to ensure the proportion of domestic revenue, the ratio between indirect taxes and direct taxes at a reasonable level, exploit taxes, collect fees and charges from the property, natural resources, and protect the environment.

Mr. Vu Xuan Bach also noted that the tax sector would minimize the integration of social policies in tax legislation and policies on tax exemption and reduction, ensuring neutrality, towards a synchronous and sustainable structure, ensuring reasonable mobilization of resources for the state budget. At the same time, contributes to creating a favorable and fair investment and business environment, encouraging investment, promoting competition, regulating reasonable income, suitable with the process of integration and development of the economy.

According to Vu Xuan Bach, in parallel with tax policy reform to ensure a sustainable state budget revenue structure, the tax sector has set a goal of reforming tax administration in the direction of "modern, streamlined and efficient operation; unified, transparent, intensive and professional management of taxes, fees and charges following risk management methods, promoting information technology application, simplifying administrative procedures, reducing compliance costs of people and businesses”.

"The key content of tax administration in the 2021-2030 period is based on the electronic tax platform and three basic pillars: a complete, synchronous, modern and integrated tax administration institution; professional human resources; integrity, innovation; modern and integrated information technology, meeting the requirements of tax management in the context of the digital economy," the leader of the General Department of Taxation said.

In terms of the reform of tax administration institutions, the Deputy Director General of Taxation said that the tax sector would focus on researching, amending, supplementing and perfecting the tax administration institutions in order to improve the capacity of tax collection management in line with e-government requirements, while promoting voluntary compliance on the basis of tax compliance and risk classification of taxpayers.

Accordingly, focusing on simplifying administrative procedures, reviewing, reducing and simplifying the components of tax registration dossiers, tax declaration, tax payment, tax refund, tax exemption and reduction and implementation of transactions in the electronic environment complying with international practices.

The tax administration institutions would also be revised in the direction of showing the active role of the tax authority in handling tax debt collection, shortening procedures to automatically cancel or collect small debts, continue to study and develop regulations on charge-off and cancellation for debts of taxpayers who are no longer able to pay the state budget.

The tax sector would also develop and implement an overall compliance improvement program and detailed annual compliance improvement plans for key functions along with annual performance evaluation criteria, ensuring handling strictly tax violations, creating fairness and transparency in the application of tax management measures.

Along with that is the improvement of tax administration institutions in a number of key areas such as: anti-transfer pricing; new production and business activities arising in the economy, digital economy, sharing economy, smart production, cross-border transactions; tax agents; and information exchange between tax authorities and relevant agencies.

The leader of the General Department of Taxation also said that in the future, the tax sector would focus on organizational structure and human resource development. The tax sector would build an apparatus of the tax authority with sufficient authority and capacity to proactively enforce tax laws under the model of combining tax management by function with tax management by object, suitable for application of electronic tax and automated risk management methods.

"The tax system reform orientations that the tax sector has identified and included in the tax system reform strategy for the 2021-2030 period are all aimed at successfully realizing the goal of ensuring a sustainable revenue structure," Vu Xuan Bach said.