Tax compliance costs are the lowest among nine surveyed groups, according to the Assessment report on Administrative Procedure Compliance Cost Index 2020 (APCI 2020) of the Prime Minister’s Advisory Council for Administrative Procedure Reform.

All businesses do not have to pay unofficial fees when carrying out tax procedures.
Photo: T.L

The APCI 2020 was based on a survey of nearly 3,000 enterprises that carried out administrative procedures nationwide in the second half of 2019.

The APCI composes two indexesthat reflect costs for carrying out administrative procedures. The time costs foreach enterprise to learn procedures from beginning until finishing and the direct costs they have to pay for carrying out administrative procedures.

Comparing component indexes of the tax administrative procedures group.

According to survey results, enterprises need 3.8 hours and VND 11.600 to carry out one tax procedure on average. The proportion of enterprises using intermediary services is about 5% with an average cost of VND 500,000 per procedure.

Direct costs for enterprises to carry out one tax procedureare VND 12,000 on average. Direct costs are only incurred in special cases.

The rate of amendments and supplementations of records by enterprises in the group of tax administrative procedures is 11%. These firmsneed 2.1 hours on average and five working days for amendments and supplementations of records before dissolution.

Notably, 100% of surveyed enterprises said that they have not to pay unofficial fees for the State agency when implementing procedures for finalisation of corporate income tax and the declaration of value added tax under the deduction method and fulfillment of obligations before dissolution.

According to the report, the tax sectorhas completed the e-tax payment model and resolved problems arising in practice andapplied information technology in the performance of each agency, between State administrative agencies and in transactions with organisations and individuals.

Minister and Chairman of the Government Office Mai Tien Dung said the tax sector has made major reforms from central to local levels,streamlined tax agenciesand connected e-declaration, facilitating enterprises.

The APCI 2020 recognises that the proportion of enterprises, which have to work directly with the tax authority at the enterprises’ premise and time costs and direct costs are significantly reduced.

Direct costs for tax administrative procedures in key economic regions.

However, the report also pointed out several limitations in implementing tax administrative procedures. The preparation of documents takes the longest time, accounting for 54% of total time of implementation.

The APCI 2020 survey showed the time for the preparation of documents for the corporate income tax finalisation is quite long because some enterprises said that they only gather tax records for the year at the end of the final settlement period, so it takes too long time, even 15 working days in some cases.

Although the e-tax payment system allows taxpayers to apply their record online via the Portal of the General Department of Taxation, the portal still has some errors, so enterprises cannot apply records, especially at the end of the month and of the tax payment period, leading to a delay in submission.

Therefore, enterprises propose the tax sector overcome these shortcomings and simplify procedures.

To do this, the firmshope that the tax authority will accompany and support them from their establishment to operation to save time for implementing dissolution procedures.

In addition, the tax sector also needs to take measures to support enterprises, review and reform some procedures that take a lot of time and effort of both enterprises and tax officials.

Standardise internal procedures provide specific instruction for the implementation of procedures andarrange officials to receive and handle procedures.