6
create better tax revenue remains a big challenge.
The government’s desired outcomes are clearly
understood and the GDT is undertaking many
activities to achieve them. These priorities will
place significant demands on the GDT. To
respond, the GDT will need to: (i) introduce
efficiencies through technology and more modern
administrativeprocesses thatminimizecompliance
costs to taxpayers and reduce the cost of collection
to the government; (ii) align the GDT organization
and its management processes, and develop new
staff capability to meet new medium-term needs;
(iii) develop stronger compliance strategies and
plans based on taxpayer segments and focused
on risk-to-revenue. These steps would contribute
to the achievement of the fourth outcome that is
increased revenue (Government, 2011).
Tax evasion is still widespread and has declined
slightly over the years. There were many concerns
on tax evasion in recent years. There are losses
of billions of dollars of tax each year that are
occurring in many countries around the world,
including Vietnam, due to transfer pricing and tax
evasion of multinational corporations (Anh, 2017).
According to OECD “Internal trade transactions
of multinational corporations currently account
for more than 30% of global trade value, thus the
risk of evasion, tax avoidance is very high”. OECD
showed that losing of state budget revenues fall
from about 4% to 10% of global corporate income
tax revenues, which is $100 to $240 billion a year.
This is due to transfer pricing, tax evasion of
multinational corporations (Anh, 2017).
One big issue that needs to put on the table is
the capacity of tax officer and corruption in tax
sector. There are improvements in enhancing
the capacity of tax officers over the years. It still
has a big gap between the requirement and their
adaptation. There is low innovative and adaptive
capacity to improve tax collection for example by
making the taxation payment simpler and with
fewer bottlenecks that encourage corrupt practices.
The corruption is one of the biggest concerns in
Vietnam.
What should be the agenda?
Tax is one of the priorities in institutional
reform in Vietnam. In fact, Vietnam is going in the
right way that is consistent with the trend in other
countries world and in reference to tax reform.
Although the reform is not yet complete, it takes a
long time to implement and impact the country’s
development. In the process of tax institutional
reform, Vietnam should follow principles of a
good tax system (equity, certainty, convenience,
economy, efficiency, equality or fairness, simplicity
and accountability).
There is also a need for the promotion of good
governance, accountability and democracy to limit
tax evasion. More emphasis should be placed on
broad strategies to improve voluntary compliance
(e.g., taxpayer services, education, and awareness).
Currently GDT’s compliance efforts rely heavily
on audit and enforcement interventions. Other
issues to consider is restructuring the Tax office,
and applying IT in taxationmanagement. The GDT
is well positioned to leverage opportunities from
advancements in IT to move to a more strategic
risk-to-revenue approach. The GDT has made
significant progress over the last three years in IT
capability and further enhancements are expected
in 2017, including the implementation of a data
warehouse. An improvement in the collaboration
between statistics and taxation offices should
be made. This collaboration should include an
improvement in the internal dynamics of the
two institutions. The aims of such collaboration
should be to improve the relationship between
the Department of Statistics from MPI and the
Department of Taxation under MOF.
References:
1. Adams, D. (2017). Upgrading Tax Administration Organization. IMF-
Technical Assistance Report. IMF. Vietnam.
2. Anh, H. (2017). APEC is combating the erosion of the tax base and the
transfer of profits Business Newspaper (9/10/2017 ed.). Vietnam.
3. Goldberg, E. (2012). Why Nations Fail: The Origins of Power, Prosperity,
and Poverty by Daron Acemoglu and James Robinson. American Foreign
Policy Interests, 34(6), 344-345. doi:10.1080/10803920.2012.742407
4. Government. (2011). Tax Reform Strategy 2011-2020. Vietnam:
Vietnam Retrieved from
portal/chinhphu/noidungchienluocphattrienkinhtexahoi?_
piref33_14725_33_14721_14721.strutsAction=ViewDetailAction.
do&_piref33_14725_33_14721_14721.doc id=1026&_
piref33_14725_33_14721_14721.substract=.
5. Phung, N. V. (2011, 30/08/2011). Tax reform strategy toward 2020.
Retrieved from
-
toward-2020-3335.html.
