Tax compliance management in the digital economy

scene of the conference

Already create a suitable legal corridor

Information on the application of compliance risk management in Vietnam at the workshop on Tax Compliance Management in the Digital Economy held by the General Department of Taxation on May 13, Mrs. Ngo Thi Thuy Linh, Director of Risk Management Board (General Department of Taxation) said that, in recent times, the General Department of Taxation created a legal corridor inappropriate with the requirements of modern tax management and following the direction of the Industry's reform and modernization strategy to year 2030.

In addition, the Tax sector has collected and processed information and data related to taxpayers; developed tax management criteria; evaluated taxpayers' compliance with the law; classified the level of risk in tax management and organized the implementation of appropriate tax management measures. At the same time, apply risk analysis in tax registration, tax declaration, tax payment, tax debt, enforcement of administrative decisions on tax management, tax refund, tax audit, tax inspection, management and use of invoices, documents and other professional operations in tax management.

Along with data management following the centralized management mechanism of data from information sources within the industry, the Tax sector has actively coordinated with external organizations such as the General Department of Vietnam Customs, the State Treasury, Securities Commission, commercial banks and other agencies to collect and exchange information about taxpayers to serve risk analysis and evaluate compliance history of taxpayers.

Adding more information, Mrs. Ngo Thi Thuy Linh said that some sets of criteria and indexes for applying risk management in tax management have been developed and issued in recent times to meet the requirements of tax management in each period and complying with the provisions of tax law and current state management policies. For example, a set of criteria indicators for applying risk management in selecting employees with signs of risk to develop inspection and examination plans at the taxpayer's headquarters; the set of criteria indicators for applying risk management in invoice and document management; a set of criteria indicators for applying risk management in classifying VAT refund dossiers and selecting taxpayers to develop post-refund audit and inspection plans.

According to Ms. Nguyen Thi Cuc, President of the Vietnam Tax Consulting Association, the quality of tax management work of Tax agencies is directly proportional to the compliance awareness of taxpayers. Better tax management and higher compliance will create a transparent and fair business environment. With current digital transformation requirements, the number of taxpayers is increasing, operations are becoming more and more complex, the role of risk analysis and compliance management of employees is even more important, accordingly, thus, enhancing the compliance needs to be strengthened and implemented decisively.

Many challenges for tax compliance management

According to the General Department of Taxation, the process of applying risk management in tax management currently still faces many shortcomings and limitations. According to Mr. Dang Ngoc Minh, Deputy Director General of Taxation, tax compliance management in the digital economy is more difficult than traditional economy due to its complexity, diversity and global nature of economic activities.

The General Department of Taxation said that currently, Vietnam has nearly 1 million businesses, more than 3 million business households (including 1.9 million business households are subject to tax payment) and 27 million individuals have income subject to personal income tax from wages and salaries. In the context of more and more businesses, organizations and individuals doing business in Vietnam with increasingly complex production and business activities, the task of researching, developing and implementing professional risk management measures is also becoming heavier and more complex.

In addition, risk management has just been researched and applied in some individual tax management operations to meet the urgent requirements of tax management without developing and implementing an overall compliance risk management on tax program and comprehensive management system for risk analysis and tax compliance management. Along with that, the organizational structure as well as the empowerment and responsibility for deploying risk management are not appropriate and not commensurate with risk management work in the current period.

Accordingly, the solutions proposed by the Tax industry include continuing to improve the legal corridor on compliance management; building a comprehensive compliance management information database; developing a set of criteria indicators to apply risk analysis for overall compliance management with full tax management functions; deploying the construction of "Database application system and overall risk analysis" based on research and application of big digital data analysis methods; build and consolidate the tax risk management department under the General Department of Taxation.

Regarding the issue of strengthening the tax risk management department, according to Mr. Le Thanh Thao, Deputy Director of Personnel Organization Department, General Department of Taxation, no unit has full functions, tasks, legal status, and authority to build a unified system of risk management and compliance management. Thus, it has partly affected the construction and implementation of an overall risk management and compliance tax program. Therefore, it is difficult to ensure the leading and coordinating role in implementing risk management and compliance management tasks throughout the Tax industry. Facing the task requirements of risk management but having to increase voluntary compliance with the law by taxpayers, Mr. Le Thanh Thao said that it was necessary to have a state management model with full legal status and authority, has the role of chairing and coordinating the deployment of risk management tasks, managing law compliance on tax throughout the Tax industry, thereby supporting and guiding taxpayers to implement, which is an urgent requirement at present voluntarily.