Draft Law on Tax Administration (amended): Reducing compliance time and costs

The personal identification number will be the individual's tax code.

Briefly presenting the Proposal on the draft Law on Tax Administration (amended), Minister of Finance Nguyen Van Thang stated that the draft Law consists of 9 Chapters and 53 Articles, regulating the management of taxes and other revenues of the state budget.

Regarding tax codes (Article 11), the draft amended Law stipulates that the tax code of an individual, household, business household, or individual business is the personal identification number of an individual, head of household, head of business household, or individual business issued in accordance with the provisions of the law on identification.

Regarding tax declaration, tax calculation, and tax deduction (Article 12), the draft Law amends the time limit for additional declaration from 10 years to 5 years; adds a provision that taxpayers are not allowed to make additional declarations during the time period according to the written request of the investigation agency requesting taxpayers not to make additional tax declarations according to the provisions of the Law on the organization of criminal investigation agencies and assigns the Government to stipulate cases where additional declarations are allowed after the tax agency or competent authority has announced the decision to inspect and examine. However, the draft Law also adds a provision that in special cases, the extension period for submitting tax declarations is prescribed by the Government.

Delegates attending the meeting. Photo: Ho Long

Regarding tax declaration, tax calculation, and tax deduction for business households and business individuals (Article 13): The draft Law is amended in the direction that business households and business individuals, based on the actual annual revenue from production and business activities of goods and services, self-determine whether they are subject to tax, not subject to tax, subject to tax, or subject to tax according to the provisions of the law on tax. For business households and business individuals who are subject to tax, they must declare and calculate tax for each type of tax according to the tax period.

At the same time, supplement the regulation that tax administration agencies are rewarded when they collect state budget exceeding the annual estimate decided by the National Assembly to supplement the income of civil servants and employees. The Government regulates the allocation and use of bonus funds to supplement income to ensure proper and effective use.

Vice Chairman of the National Assembly Vu Hong Thanh and delegates at the meeting — Delegates attending the meeting. Photo: Quang Khanh

The draft Law amends and supplements the principles of creating, managing, using, and subjects using electronic invoices, including clearly defining the responsibilities of taxpayers, buyers, invoice service providers, and tax authorities in creating, managing, and using electronic invoices. It supplements regulations on programs to encourage consumers to get invoices when purchasing goods and services and rewards consumers who report businesses that do not create and deliver electronic invoices from the annual state budget funding source equal to 0.1% of the total domestic value added tax revenue of the previous year. The Government is assigned to stipulate the time of creating electronic invoices.

The Minister also said that in the draft Law on Tax Administration (amended) and the decree, the circular will cut down on 96 administrative procedures (accounting for 44% of the total 219 tax administrative procedures); it is expected to simplify and reduce compliance time and costs for 63 administrative procedures, reaching a rate of 28.8%.

Consider adjusting tax rates to avoid creating a burden

In the summary report of the Law project review report, Chairman of the Economic and Financial Committee Phan Van Mai said that the draft Law supplements the regulation that when tax authorities organize the implementation of budget collection exceeding the estimate assigned by the National Assembly, they are allowed to allocate funds to supplement the income of officials not exceeding 1 time the salary fund.

The Economic and Financial Committee believes that it is necessary to have a regime of additional income for tax officials, similar to that of Inspectors, officials working in law-making, and officials in localities with special mechanisms, especially in the context that tax officials and civil servants are under great pressure due to new requirements in revenue management methods and the current restructuring of the apparatus. However, the inclusion of this content in the Law currently does not have the necessary political basis because the Resolutions of the Party and the National Assembly have clearly stipulated the abolition of non-salary expenses of officials, civil servants, and public employees originating from the state budget... Therefore, the Committee recommends that the Government seriously implement the conclusion of the Standing Committee of the National Assembly on seeking opinions from competent authorities before submitting to the National Assembly.

In case there are sufficient necessary political bases, it is necessary to specifically stipulate in the Law on the income supplement regime for tax officials in an appropriate manner, balanced with the policy regime being applied to other agencies. In addition, this mechanism should not be linked to the requirement of exceeding the budget revenue to avoid chasing revenue targets when building estimates and not ensuring sustainability, stability and transparency.

Overview (Chairman of the Economic and Financial Committee) — View of the meeting. Photo: Ho Long

Regarding tax declaration, tax calculation, and tax deduction for business households and business individuals (Article 13), the Economic and Financial Committee believes that the declaration of revenue based on invoices for business households will be higher than the current fixed rates that business households/individuals are applying. Accordingly, the tax burden (value added tax and personal income tax) of business households will change significantly when the collection rates remain unchanged.

The Economic and Financial Committee recommends that the Drafting Agency supplement specific impact assessment data on changes in tax obligations for business households/individuals. If necessary (if the change in declared revenue compared to the current fixed rates is too large), it is recommended to consider adjusting tax rates (in policy laws) so that the tax burden on related subjects is not too greatly affected, in line with the spirit of Resolution No. 68-NQ/TW of the Politburo on private economic development and the goal of improving people's lives of the Party and State.

Delegates at the meeting — Delegates attending the meeting. Photo: Quang Khanh

Regarding electronic invoices, the Economic and Financial Committee believes that the policy to encourage the use of invoices is necessary. However, the draft content in this direction is not consistent with the Constitution's provisions that all revenues and expenditures of the state budget must be estimated; not consistent with the State Budget Law, this content belongs to the expenditure tasks of the state budget, so the provisions in the Tax Administration Law are not appropriate. In the context of increasing pressure on the budget, the Committee recommends continuing to implement this policy from the source of funds for propaganda and support for taxpayers as has been done in the recent past and requests the Ministry of Finance to pay attention to allocating enough of this funding source, ensuring transparent and effective use.

Source: https://daibieunhandan.vn/du-an-luat-quan-ly-thue-sua-doi-giam-thoi-gian-va-chi-phi-tuan-thu-10394274.html