Renovate tax inspection

	Focusing on inspection for “hot” sectors
	Increase revenue by over 1,600 billion VND after tax inspection
	Tax inspection and examination at enterprises should not be prolonged

In 2019, the Tax sector set a goal to inspect at least 19% of taxable enterprises. Photo: T.L

Increase revenue of more than 4,000 billion VND through tax inspection

Since the second quarter of 2019, tax authorities have strengthened the tax inspection for organisations and individuals. In the first five months of 2019, the tax sector conducted 22,714 inspections at taxpayers’ premises and checked 138,364 tax dossiers at head offices. The total revenue expected to collect through inspection was more than 13,536 billion VND, equivalent to 113.13% compared to 2018. In which, total additional revenue was more than 4,045 billion VND; reduced tax reduction was more than 670 billion VND, reduced tax losses by8,820 billion VND. Total revenue contributed to the State budget was more than 2,122 billion VND, reaching 52.47% of the additional revenue through the tax inspection and increased 6.37% compared to 2018.

According to the General Department of Taxation, of the total 22,714 inspections at taxpayers’ premises, the tax sector inspected 80 enterprises having associated transactions. Thereby, collecting tax arrears and fines of 491.92 billion VND, reducing losses of 947.24 billion VND, reduced a deduction of 4.87 billion VND and revising up a taxable income of more than 2,131 billion VND. The sector conducted 1,875 decisions on VAT refund inspection equivalent to a tax refund of 8,061 billion VND. The total tax refund and fine was 55.5 billion VND.

The General Department of Vietnam Customs said that from the present date to the end of the year, the tax sector will continue to promote the inspection and tax obligation of tax payers, especially, the tax refund inspection; request tax departments to urge the implementation of proposals, conclusions of state audit agencies and inspection agencies of all levels for taxpayers.

In the future, to enhance the efficiency of the inspection and anti-tax losses, the General Department of Vietnam Customs Department will continue to implement key solutions, in which focusing on the comprehensive renovation of inspection in a unified and modern manner. Accordingly, the tax willcontinue to review, amend and supplement regulations to ensure the unification and efficiency of the tax inspection and investigation; develop a profit rate system for the management of transfer prices; decentralise the use of taxpayers' databases to tax departments to carry out risk analysis and inspection, check transfer prices; standardize the transfer price inspection. The tax authority will strengthen the information exchange with related parties to improve efficiency and effectiveness of tax inspection, such as exchanging information on payment transactions via banks with suspicious signs.

Apply mechanism of risk management and electronic method

In 2019, the taxsector aims to inspect at least 19% of taxable enterprises and increase revenue through tax inspection from 2018. With therapid increase in the number of enterprises and the unchanging number of tax officers, it is a challenge of the tax sector to complete the assigned plan. To support this work, in the draft Law on Tax Administration (revised), the drafting agency has completed the tax inspection towards applying risk managementmechanism and by electronic method. Accordingly, the tax authority will check the information on the enterprise on the data system to know the operation, the production and business and tax obligation of enterprises. After analysing thisdata, if there are signs of tax risks, the tax authority will send an open letter, and suggest enterprises review and re-declare tax according to the actual situation. If the enterprise does not declare again, the tax authority will conduct aninspection.

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At the same time, the draft Law on Tax Administration (revised) also supplements the content of tax inspection on the basis of the provisions of the Law on Inspection to comply with characteristics of tax inspection. The drafting committee also sets out the principle that tax inspection and examination will not hinder the normal operation of taxpayers' agencies, organisations and individuals.

On the application of risk principles in tax inspection (Article 107), Le Quang Hung, Manager of Dong Da Tax Branch said the completion of the tax inspection principle on the basis of application of risk management and information technology is one of the important legal basis for the tax agency to effectively use the existing data source of the tax sector and the exchange regulations of relevant agencies. “This regulation is also in line with the general development trend when the number of enterprises is increasing while the human resources of the Tax agency are limited. If the principles of tax inspection and examination based on the application of risk management and information technology are effectively applied, it will reduce time and costs in tax inspection,” Hung said.