Businesses raised concerns about tax refunds at the dialogue conference on September 27, 2024. Photo: T.D

Tax refunds still stuck

At the dialogue conference between the General Department of Taxation and enterprises of 5 southern provinces and cities held last weekend, the Tax sector received over 400 issues, of which the most prominent was the issue of corporate income tax (CIT) and personal income tax (PIT) refunds.

For example, a representative of Asahi – Nutifood Co., Ltd. said that the unit had completed tax settlement procedures for dissolution since 2022 and had an inspection report. However, the company is still waiting for the decision to complete tax obligations from Ho Chi Minh City Tax Department to make VAT refunds and close the business. Up to now, the company has not received any feedback on the processing of dissolution and VAT refund documents so that the company can transfer money to investors.

For example, SAIGON PTS Co., Ltd. encountered problems with the export company related to the proportion and the tax refund required suppliers to settle before the export company could refund the tax. According to business representatives, cases where export enterprises have to wait for verification lead to the tax amount being suspended. In addition, according to businesses, at the time of the transaction, the partner company was still operating transparently (no invoices were discovered to be bought and sold), but later when the tax refund period came, the company closed, causing the enterprise's invoices to be fined and rejected.

In response to the difficulties of businesses, Mr. Mai Son, Deputy Director General of the General Department of Taxation, requested Ho Chi Minh City Tax Department to resolve the issue immediately so that businesses can transfer money to investors. Mr. Mai Son affirmed that currently 80% of the files are eligible for pre-refund. In the past, the refund of corporate income tax was not delayed, but because a group of businesses used unsecured input invoices. Many cases of invoice trading have been discovered recently.

Mr. Mai Son cited, for example, at the end of 2023, the People's Court of Phu Tho province held a first-instance trial of a case of illegal invoice trading occurring in Phu Tho province and many other provinces and cities across the country with more than 100 defendants. According to statistics from the Tax Department, this network has up to 637 enterprises, illegally issuing 1,025,712 VAT invoices to 88,053 enterprises with a turnover of more than VND 64,000 billion; deducting VND 3,115 billion in tax. Therefore, the Tax Department has built a database of invoices for cross-checking, helping businesses better manage their inputs.

Regarding the slow processing of personal income tax refund dossiers, Mr. Mai Son said that in the first 7 months of 2024, the number of dossiers requesting personal income tax refunds nationwide tended to increase (by 145% compared to the same period in 2023). The peak of personal income tax refund requests from individuals directly settling their taxes in April, May and June is one of the reasons why some applications are processed slower than prescribed, affecting taxpayers.

Taxpayer Satisfaction Score

General Director of the General Department of Taxation Mai Xuan Thanh admitted that the large number of issues raised by businesses and taxpayers shows that tax policies and tax administrative procedures are still a “hot” issue for the Tax Department. Tax agencies must clearly and frankly look at the limitations in conveying legal regulations and administrative procedures in the tax field to businesses and taxpayers.

To resolve the above situation, General Director Mai Xuan Thanh pledged to continue to listen in the most receptive way to the difficulties, problems as well as suggestions and recommendations of businesses and taxpayers. From there, research and propose tax management solutions, perfect mechanisms and policies, continuously reform, modernize and comprehensively transform digitally, build a public, transparent and fair tax management environment with the goal of creating the highest convenience for taxpayers and the highest coordination, companionship and consensus between the Tax authority and taxpayers.

In addition, the General Director expressed that the Tax authority also hopes to receive the understanding and sharing of the business community and taxpayers regarding the challenges that the tax authority is facing in the face of invoice fraud and tax refund fraud; increasingly sophisticated tax evasion and avoidance tricks have partly affected taxpayers who comply with and abide by tax laws.

The Tax authority is urgently researching and implementing strong solutions, applying advanced technology solutions to promptly detect acts of fraud, tax evasion and avoidance, thereby moving towards a clean invoice environment; Applying artificial intelligence to automatically answer questions; and scoring taxpayers' satisfaction with the Tax Authority. Thereby bringing fairness to taxpayers with high compliance awareness, good compliance with tax laws, creating a healthy and transparent investment, production and business environment.