4
changing positively, with domestic revenue
accounting for a higher proportion of total state
budget revenue, up from 58.9% in the 2006-2010
period to 67.8% in the 2011-2015 period. This figure
was expected to reach 74.2% (70% of the target
planned for the period 2011-2015). Basically, the
strategy of tax reform is to increase the proportion
of domestic revenue to compensate for import and
export taxes that has been reduced, due to deeper
international integration and a decline in oil prices
(Government, 2016).
In term of tax policy, in the past 5 years, the tax
sectorhasreviewedall taxes for timelyamendments
and supplements. VAT has been amended to
remove the shortcomings that have arisen. This is
in accordance with international practice, which
makes a breakthrough in administrative reform
to simplify tax procedures, reducing the time
and cost of compliance for taxpayers, especially
small and micro-taxpayers. With the corporate
income tax, a number of provisions on deductible
expenses have been amended and added, but not
deductible when determining taxable income.
More importantly, the CIT rate has gradually
been adjusted in line with other countries in the
region. PIT policy is also amended and finalized
on the basis of simplifying tax collection for
business individuals in proportion to turnover for
each business sector or business line. Government
applies a tax rate to income from real estate transfer
and securities transfer. They also raise family
allowances for taxpayers and their dependents,
and add taxpayers who do not have to make PIT
finalization. Regarding special consumption tax,
the Government has adjusted and supplemented
the regulations related to taxable objects and
tax rates in order to regulate consumption
effectively and in line with the socio-economic
development situation. Accordingly, it increases
taxes on tobacco, wine, beer and casino business.
Government reduced tax on bio-fuel and amended
regulations on SCT (special consumption tax)
calculation prices for goods and services in line
with the common practice.
Particularly, the export tax and import tax
policy has created a synchronous legal framework
for active international economic integration and
external economic relations that plays the role
of regulating macroeconomic fundamentals. It
also contributes to limiting the export of mineral
resources in the formof rawmaterials, encouraging
investment in technology and increasing the
value of processed products. The provisions
of the Law have facilitated the negotiation and
implementation of international commitments on
tariffs when Vietnam joined the WTO and entered
into FTA.
The period 2011-2015 is also the time whenmany
incentive policies were upgraded or standardized in
the form of laws such as the Law on environmental
protection tax, the Law on non-agricultural land use
tax, and the Law on fees and charges to improve the
legality of tax law. These laws provide reasonable
mobilization of user contributions, exploitation,
and raising the efficiency of tax collection and
management. The laws will ensure the sources of
revenues for the state budget and create favorable
conditions for the economy to integrate into the
international economy.
When it comes to tax administration, there
are three basic foundations of tax administration
including management mechanism, structure -
organizational approaches and human resources
management. The tax reform strategy 2011
- 2020 has become a tool and a driving force
that create a context to uniform, transparent,
easy to understand and easy to implement tax
administration reform. Up to now, basic tax sector
information and technology was applied to the tax
administration system. This saves time and cost for
both taxpayer and tax administration office. It also
contributes to accountability and transparency in
tax administration. The central office can oversee
tax revenue at all provincial and district levels.
Challenges in tax reform
After the first five years of the implementation of
the Tax System Reform Strategy, while comparing
the results achieved, with the objectives and the
requirements, the reform had limited success.
When it comes to tax policy, the VAT reforms
only focused on reviewing, removing obstacles
arising in practice, and not on reducing the group
of goods and services that weresubjected to a tax
rate of 5%. In terms of excise tax, a combination
of proportional and absolute rates for goods
and services that were subjected to tax has not
been studied. As for import and export tax, the
