Responded by units: The Ministry of Finance

Official letter: 6117/BTC-CST, dated: 2017-05-10

Responded contents:

a) Recommended contents: Strengthening the administrative reforms in taxand customs.

1. Responses:

(i) Regarding tax administrative procedures reforms:

Over the past time, under the leadership and direction of the Government, the Government’s Prime Minister, the effective coordination of sectors and levels from the central to local; the World Bank's support for international experience; the cooperation and sharing of the business community, the efforts and striving of the entire tax sector to implement the Government's resolutions on enhancing competitiveness, improving the business environment, favorable business investment for business development, the reform of tax administrative procedures has achieved some convincement results; has been recognized by the society, business community, international organizations and has been appreciated by the Government. Regarding the reform of tax administrative procedures, the tax sector has focused on reforming tax administrative procedures through groups of solutions to achieve the objectives and requirements of the Government Resolution and achieve get results on:

 (1) Institutional and policy reform, simplification of administrative procedures.

 (2) To implement information technology to save time and costs of enterprises and limit the interference and direct contact between tax officials and enterprises in the process of tax declaration and tax calculation.

(3) To publicize the process and regulations on tax administration so that taxpayers can know, monitor and supervise. At the same time, to disclose tax administrative procedures in many forms and support taxpayers.

  (4) To strengthen discipline, rules, rectify and supervise the performance of duties of the tax authorities, to enhance the morality of the tax officials.

(5) To coordinate with related Ministries, sectors to carry out the reform of administrative procedures with the aim of simplifying tax administrative procedures, shortening the process of handling, to apply information technology in tax administration, to reduce the time for carrying out administrative procedures, to ensure publicity, transparency and raise the responsibility of state agencies; to support and remove difficulties for production and business, to contribute to attractive investment, to improve the business environment and e-government, administrative reforms and creae favorable conditions for enterprises; to create favorable environment, to ensure business rights, equal access to resources and business opportunities of enterprises; to reduce business costs for businesses.

Thereby, there are 420 taxpayers that have been cut for enterprises, while eight VAT declaration and payment have been reduced, also four times of the submission of the provisional CIT return have reduced; to strongly apply information technology in tax declaration, payment, reducing time cost and create maximum convenience for enterprises when carrying out tax procedures, so far 99,81% of businesses use online tax declaration, basic tax administrative procedures have been implemented electronically, piloted electronic tax refund and electronic invoices, electronic invoices with code authentication to make transparent the tax administration regulations and to apply tax administration on the basis of risk assessment (especially for inspection and examination); to collaborate with agencies to connect information and implement inter-e-mechanism.

The satisfaction of the business has also confirmed the important results of the tax authorities in 2016 compared with 2014, in the report on the assessment of tax administrative reform, the satisfaction of taxpayers has increased from 7.11 / 10 to 7.5 / 10.  All 05 important contents are progressing as:

• Information access index: Increased from 7.45 to 7.73.

• Implementation index of Tax administratition procedures : 7.73 to 7.9.

• Tax inspection and examination: 7.49 to 7.78.

• Serving index of tax officers: 5.36 to 6.36.

• Results index of work processing: 7.53 to 7.78.

However, as required in resolutions by the Government on improving the business environment; On the support and development of enterprises, the tax authorities still have some shortcomings, some solutions are still slowly effective such as:

 To solve problems in tax law in general as well as tax administrative procedures in particular such as applying tax refund, tax exemption, settlement of complaints, inspection of tax inspection and handling of tax violations... for enterprises and people still have slow cases of time in comparison with regulation affecting the efficiency and effectiveness of laws on tax.

The number of administrative procedures on tax remains high and complicated that affecttaxpayers' time. (As of December 31, 2016, the tax administration field had 300 procedures (the General Department had 12 procedures, the provincial tax department had 165 procedures, the District tax office had 123 procedures). Procedures directly related to taxpayers have not been re-designed to be amended and supplemented in a comprehensive and complete manner. According to the requirements of reforms in the past time to match objectives of the administrative procedures reforms of the Government, to affect the post-declaration period of enterprises, especially after the declaration period as: Time to prepare dossiers and documents in service of tax examination and inspection.

The reform of tax administrative procedures for taxpayers who are individuals, business households (VAT, PIT, registration fees, non-agricultural land use tax, etc) has been fundamental innovation. However, the organization of tax collections in somewhere that sometimes still  not create favorable conditions for people.

The tax administration mechanism for large enterprises has been reformed but it still does not meet the requirements of direction and administration of the Ministry and the Government.

Therefore, in the coming time, the tax sector will continue to make greater efforts to improve the reform process and to improve the quality of services for taxpayers in order to support and create a convenient business investment environment for businesses. The key task is to continue to renovate the mechanism of policy and management; to simplify tax administrative procedures, apply information technology in management to reduce time, to reduce compliance costs, settle complaints on time, to reduce time for implementation of enterprises; to apply risk management for inspecting, examining and promptly handling cases of tax evasion, to create favorable conditions for enterprises to well observe the law on tax, to contribute to create a healthy and equal business environment.

In addition, to strengthen the training, fostering and professional qualifications as well as  attitude of serving people, businesses and ethics of tax officials; to formulate a transparent and public tax administration mechanism and enhance the supervision of citizens and enterprises with the performance of official duties by tax offices and officials.

 (ii) On the reform of customs procedures:

To implement the Government's Resolution No. 35 / NQ-CP dated 16 May 2016 on business support and development to 2020, the General Department of Customs issued the Action Plan (Decision No. 1907 / QD- TCHQ dated June 24, 2017). After one year of implementation, it has been achieved good results. According to VCCI's report on the customs procedures reforms in 2016, in the total of 1035 import-export enterprises responded when being asked step by step, most indicators on the access to information stipulated administrative procedures. customs, customs procedures improved in comparison to 2015; Some indicators on the service of customs officers have changed positively, but they are still lower than 2015. The results reflected closely the efforts and actual results of procedures reforms and personnel of the current customs sector in accordance with Resolution 35 / NQ-CP of the Government. However, the reform of customs procedures not only requires the efforts of the customs sector, but also depends on the reform efforts of the specialized management ministries for import and export goods. Therefore, for the recommendations of the Shipbuilding Industry Corporation as well as the similar proposals of some other enterprises, the General Department of Customs would like to acknowledge in order to take corrective measures within the scope of its assigned competence, At the same time, it is recommended that the authorities remove the problems beyond the authority of the General Department, thereby bringing the Government's Resolution No. 35 / NQ-CP to life in a more practical and effective manner.

- The General Department of Customs has implemented measures to raise the sense of responsibility of civil servants and ensure discipline and integrity in the customs sector, particularly:

+ Regarding finalization of rules and regulations: To review and eliminate regulations and procedures which are no longer suitable for amendment, supplementation or promulgation in the direction of facilitating the export, import, foreign investment and ensure strict management, avoid loopholes of being taken advantage of. To promulgate and seriously implement regulations on disciplines and rules, to prevent troubles, negative phenomena, corruption in cadres and civil servants, to dignify Individuals in performance of public duties. To strictly implement the Directive No. 05 / CT-BTC dated November 07, 2016 of the Minister of Finance on enhancing discipline and rules in the field of finance and planning implementation that be attached to the Official Letter No. 11645 / TCHQ-TCCB dated December 12, 2016 of the General Department of Customs. To regularly organize the dissemination of awareness and raise the moral quality and legal knowledge of customs officials and employees regarding the prevention and combat of negative acts, the  corruption and the preservation of the honor and reputation of individuals of the Customs sector.

Regarding reforms and modernizatrions in Customs: To constantly reform and cut administrative procedures in the customs field. To apply modern customs management system: automatic customs clearance system (VNACCS / VCIS) and modern technical equipment (container scanners, mobile scanners, cameras) in making procedures,  inspecttion and supervision of the import and export of goods as well as entry and exit means, to facilitate the import and export of goods, entry and exit of people and means to minimize expenses incurred. At the same time, the direct contact between customs officers and public employees with citizens and enterprises shall be limited.

+Regarding publicity and transparency: Regulations of Laws related to the State's regimes and policies as well as customs regulations, processes and procedures of the Finance Ministry and the General Department of Customs shall all be publicized and transparented on the website of the General Department of Customs, the Customs Department of the province and city as well as post documents at the head offices of the Customs Departments and locations of doing  customs procedures.

+ The Hotline: The General Department of Customs has organized a hotline system to receive and handle information reflecting negatives, troublesomes and harassing acts of customs officials.

+ Regarding inspections and handlings: To enhance the internal inspection and supervision by the General Department of Customs of the provincial / municipal Customs Departments; The provincial / municipal Customs Departments shall have their attached subordinate Departments. This will enhance the form of unexpected inspection, to focus on units and key professional operations which are susceptible to negative impacts in order to proactively detect, prevent, correct and promptly handle acts of the violation of customs officers and employees. To handleresolutely and strictly (to the extent of dismissal) cases of violation, to handle the responsibility of leading officials related to management’s responsibility to occurednegatives  or corruptions in units or field that they manage and be in charge.

1. b) Recommended contents:

Solutions groups were introduced in the Resolution No. 35 / NQ-CP to ensure business rights, to be equal access to resources and business opportunities of the enterprises when starting implementation is unclear such as: a policy to remove tax difficulties for enterprises; or to reduce 50% PIT for employees in some high technology areas, high technology application in the field of agriculture and seafood processing ...

Responses:

In implementation of the Government's Resolution No. 35 / NQ-CP dated June 15, 2016, the Ministry of Finance has actively issued a Decision No. 1239 / QD-BTC on the implementation of the Resolution of the Ministry of Finance No. 35 / NQ-CP; At the same time, to review and evaluate the implementation of the Law on Corporate  Income Tax (EIT), the Law on Personal Income Tax (PIT) and the handling of tax debts, to assess the advantages and existence as well as limitations in the course of implementation of laws on tax; to refer to the international experience on taxation on this basis, tto make draft reports to the Government on the resolution project for issuance  number of tax solutions to remove difficulties, obstacles and promote the development of enterprises. Accordingly, on October 14, 2016, at the second session of the National Assembly XIV, the Government signed the Statement No. 406 / TTr-CP submitted to the National Assembly to consider the issuance of some tax solutions to remove difficulties, obstacles and promote the development of enterprises (including 03 solutions on CIT (to reduce the tax rate for small and medium enterprises (SMEs), to encourage enterprises to start innovation, to add tax incentives for investment in renovating and rebuilding old condominiums); 01 solution on personal income tax (50% reduction of personal income tax for hi-tech employees working in information technology, agriculture, processing of agricultural products under high technology application projects or projects on production of hi-tech products on the list of high technologies prioritized for development investment and product portfolio high technology is encouraged to develop) and 01 solution on remission of late payment of tax.

However, at the second session, the resolution project was not considered by the Standing Committee of the National Assembly to submit to the National Assembly for comments.

Also in 2016, the Politburo issued a Resolution No. 07-NQ / TW dated November 18, 2016 on guidelines and measures to restructure the state budget and public debt management to ensure a secure national finance and sustainability. The Resolution No. 07-NQ / TW set out the objectives of restructure the state budget in the direction of ensuring a safe and sustainable national financial system, thus contributing to stabilizing the macro-economy. At the same time, one of the solutions for achievement of the above objectives was to focus on revenue restructuring; to complete the revenue policy in combination with the restructuring of state budget revenues in the direction of covering all revenue sources and expanding the collection establishments, especially new revenue sources in line with international practices; to increase the proportion of domestic revenue, to ensure a reasonable proportion of indirect taxes and direct taxes, to properly pioneer levy taxes on assets and resources, to protect the environment and minimize the integration of social policies in taxes and policies of tax exemption, reduction and late collection, to ensure the tax’s neutrality, to contribute to create a favorable and fair environment for investment and business, to encourage investment and regulatory rationalizing income.

On November 9, 2016, the National Assembly issued a Resolution No. 25/2016 / QH14 on the five-year national financial plan for the period 2016-2020, with objectives of restructure state budget revenues step by step. At the same time, the solution for achievement of the above objectives is to implement measures to adjust tax policies to expand the tax base, to adjust the scope and objects; to review, narrow the tax exemption and reduction subjects.

To implement the Resolution No. 07-NQ / TW of the Politburo; the Resolution No. 25/2016 / QH14 of the National Assembly, the Ministry of Finance issued a Decision No. 2823 / QD-BTC dated December 30, 2016 on the promulgation of the Action Plan of the Ministry of Finance for the 2016-2021 term. At the same time, the Ministry of Finance is reviewing, summarizing and assessing the implementation of laws on tax, collecting international experience on tax reforms, to implement the targets and solutions set out in the Resolution No. 07-NQ / TW, the Resolution No. 25/2016 / QH14, while implementation of the commitments on international integration, meanwhile dealing with the pressing matters for the socio-economic development and the people's life according to the Prime Minister's direction (including related content groups to the tax policis mentioned in Resolution No. 35 / NQ-CP above).

On the basis of the results of the review of current tax laws, the Ministry of Finance has issued an Official Letter No. 4191 / BTC-CST dated 30 March 2017 reporting to the Prime Minister for consideration and amendment of the current 5 tax laws. These include the Law on CIT, the Law on PIT, the Law on Special Consumption Tax, the Law on VAT, and the Law on Natural Resource Tax.

Thus, if being considered in the context of implementation of the task on studying the amendment and supplement of tax laws to serve the purpose of revenue restructuring as directed by the Politburo and the National Assembly at the Resolution as mentioned above, the promulgation of a project on tax resolution to remove difficulties, obstacles, promote the development of enterprises for short-term application, the actual meaning will not be high. Therefore, the Government’s Prime Minister has agreed that do not to continue adding the Resolution project of the National Assembly on some tax solutions to remove difficulties, obstacles,  and promote the development of enterprises. The third session of the XIV National Assembly, which assigned the Ministry of Finance to chair and coordinate with the Ministry of Justice and the concerned agencies in proposing the drafts of the Law on amending and supplementing a number of articles of the Law on VAT, CND, PND, SST and natural resources to submit to the Government for reporting the National Assembly, the Standing Committee in order to supplement the Law and Ordinance Program of the National Assembly in 2018 in accordance with the Law on Promulgation of Legal Documents.