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REVIEW of FINANCE - Issue 4, 2021

TAX MANAGEMENT IN THE TREND

OF DIGITAL TRANSFORMATION IN VIET NAM

NGUYEN THANH TIEN
Abstract: Good tax management encourages and stimulates demand and promotes production and business, especially in the context
of digital transformation. In view of the new trend of the times and the increasingly exhausted domestic fiscal context due to the
impact of the COVID-19 pandemic, the study was carried out to analyze the reality through the perspective of theoretical bases,
combining analysis with the current institutional framework to design and propose a number of tax management mechanisms and
solutions in the trend of Viet Nam's digital transformation to be completer in the coming time.

Keywords: Tax management, Digital transformation, Good tax system

Received: October 5 , 2021 2. Theoretical basis
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Revised: November 9 , 2021
Accepted: December 4 , 2021 2.1. Digital transformation in tax administration
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1. Introduction
Digital transformation.
Viet Nam has achieved many economic Digital transformation is a total and comprehensive
achievements in the past decade from reform and change of organizations and individuals in terms of
integration efforts. production, business, working, and living methods (Ministry
With a dynamic growth rate, maintained at an of Information and Communications, 2020). According to Vial
average rate of 6.1% per year over the past decade, the (2019), this improves reality by making significant changes
size of Viet Nam's economy at current prices in 2020 in attributes through information technology, computing,
has exceeded USD 271 billion, a 10.3-fold increase communication, and connectivity technologies.
after the Renovation period. People's living standards There are three elements of digital transformation in
are improving day by day. In 2020, the per capita the public sector: (i) Using technology to transform service
income was estimated at more than USD 2,786. The delivery; (ii) using technology to transform organizational
poverty rate is only 5.7%. The human capital index culture and relationships with people and (iii) is the result of
has increased to 0.69. According to the World Bank, digital transformation, the value must be created.
these are impressive achievements compared to other Viet Nam's digital transformation strategy (According
countries with similar income levels. to Decision No. 749/QD-TTg dated June 3, 2020) sets out a
In particular, dynamic digital economic growth specific roadmap to 2025, orientation to 2030, the country
promises a lot of potentials as a driving force for strives to basically achieve the dual goals of medium develop
change in general. Furthermore, this period's correct digital government, digital economy, digital society, and
and timely fiscal policy has maximized efficiency, form Vietnamese digital enterprises with global capabilities.
promoted and encouraged production and business, Digital transformation in tax management.
creating momentum for economic growth. If the world has gone through three industrial revolutions,
However, the narrowing of the tax base and the there have been two revolutions in management as well. In the
reduction of the average tax rate have put a lot of first tax management model, the tax authority determines tax
pressure to balance the fiscal, arrange for the tasks obligations by power associated with administrative procedures
of investment and development, and cover recurrent by paper and is processed and synthesized manually by
expenses. In addition, the COVID-19 pandemic, on the technology. With the second model, implementing the "self-
one hand, promotes digital transformation, increases declaration and self-payment" mechanism, taxpayers self-
economic motivation, and on the other hand, increases declare and self-pay arising taxes and are monitored, audited
the pressure on the national fiscal balance. and inspected by tax authorities. This model is incredibly widely
Therefore, tax management in digital transformation applied to information technology to digitize documents and
is set with two main goals: consolidating state budget process and synthesize by applications. Therefore, this second-
revenue and ensuring fairness, promoting production generation tax administration model is also known as the
and business to recover the post-pandemic economy. electronic tax model.

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