Business households using bank accounts: Increasing transparency of private economy

The policy requires business households to open their own bank accounts to increase transparency and support digital transformation. This is expected to reduce tax fraud.

The Hanoi People's Committee has just proposed that the Ministry of Finance add a regulation requiring all business households to register separate bank accounts or electronic transactions for business activities. This is one of the contents that the Hanoi People's Committee commented on the policy dossier of the draft Law on Tax Administration.

This regulation is expected to help make cash flow transparent and facilitate tax management, especially in the context of an economy that is increasingly transforming with the development of digital technology and electronic payments.

Electronic payment becomes a trend in the private economy

Speaking to reporters of the Industry and Trade Newspaper, Dr. Nguyen Minh Phong, former Head of the Economic Research Department (Hanoi Institute for Socio-Economic Development Research) said: “ The use of bank accounts and electronic payments in business has become very popular, even when there are no mandatory regulations. Many individual business households now have accounts at different banks to serve transactions in their business activities .”

He believes that this trend is becoming increasingly inevitable in the context of the development of financial technology and that requiring business households to open bank accounts or use electronic transactions is a necessary step in improving the efficiency of financial and tax management.

Many traders at Ben Thanh market (Ho Chi Minh City) are still confused about applying electronic invoices in sales.

Professor - Dr. Dinh Van Son, former Principal of the University of Commerce, also acknowledged that the main goal of the policy requiring business households to open bank accounts and conduct electronic transactions is to strongly promote the digital transformation process in the private economy in Vietnam. Specifically, this policy helps create a more transparent economic system. Thereby, supporting tax management, minimizing fraud and tax evasion, helping to increase state budget revenue.

“ Hanoi’s proposal will encourage small businesses to participate in the digital economy, thereby improving their ability to apply technology to activities such as sales management and product distribution. Mandatory bank account opening will also help them increase their access to services such as fast money transfer and online payment gateway payment, helping to expand their business scale and improve their competitiveness, ” said Professor - Dr. Dinh Van Son.

Need to consider practicality

However, Dr. Nguyen Minh Phong also pointed out that the proposal of the Hanoi People's Committee is somewhat "more rigid" than the general regulations of the Ministry of Finance.

According to current regulations, only businesses with revenue of 1 billion or more are required to register a bank account. This means that smaller businesses with lower revenue are not bound by this regulation.

Meanwhile, Hanoi's proposal requires all business households, regardless of size or revenue, to register for a bank account or conduct electronic transactions.

Expert Nguyen Minh Phong said: "This is a remarkable difference and can create certain challenges for small businesses. Having regulations higher than the national average is understandable. Legally, Hanoi has the right to apply specific regulations suitable to the conditions and requirements of the city's socio-economic development according to the Capital Law ".

However, he also emphasized that policies need to be applied flexibly and carefully considered so as not to cause difficulties for small businesses.

Although acknowledging the potential benefits of applying this regulation, Dr. Nguyen Minh Phong also expressed concerns about its practicality: " Forcing all businesses, including small vendors such as water vendors or sticky rice vendors..., to register for a bank account is unrealistic and unnecessary ."

Dr. Minh Phong suggested that instead of Hanoi applying mandatory regulations for all business households, it could lower the revenue ceiling for mandatory bank account registration to a level lower than the general regulation of the Ministry of Finance. This would help ensure feasibility and fairness, while avoiding creating too much pressure on small-scale businesses that are not eligible to use banking services.

Dr. Nguyen Minh Phong: Although requiring business households to register for bank accounts and conduct electronic transactions brings many benefits in terms of financial transparency and convenience in tax management, it is also necessary to carefully consider the practicality and applicability of this regulation for small business households. This is a policy that requires careful consideration, in order to achieve the goal of effective tax management without causing additional burdens for business households that are not eligible to use banking services.

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