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Research conducted by the OECD in 2020 (named Tax enforceability is crucial to ensure efficiency of the tax system.
Administration 3.0: The Digital Transformation of Tax - Flexibility: Taxation systems should be flexible and
Administration) offers a third tax management model, dynamic enough to ensure they keep pace with technological
linking tax management with digital transformation. This is and commercial developments.
a model with innovative and breakthrough ideas, including:
(1) Linking the taxpayer's production and business activities 3. Situation of tax management
with tax obligations; (2) An automatic and continuous in the digital transformation trend
interactive system will replace the tax agency as the focal 3.1. Vietnamese digital transformation
point for processing tax management data and acting as a
bridge between taxpayers and the authorities; (3) Changing With the explosion of the Internet and information
the "self-declaration and self-payment" mechanism to an technology in the past decade and the extensive digitization
automatic tax liability determination system; (4) Putting of the economy, Viet Nam's digital transformation has
the taxpayer at the center of the management system. achieved breakthrough results, most notably positive effects
Accordingly, they can check their tax obligations; and (5) of the digital economy. Viet Nam is one of the first countries
Tax services and tax administrative procedures integrated to use 5G mobile networks. More than 71% of the population
into the e-Government model. (about 68 million people) use the Internet, with more than
2.2. Good tax system 65 million social network users. According to the Southeast
Asia Digital Economy Report published by Google, Temasek
Based on the original idea of good tax standards by and Bain & Company, with a value of more than USD 14
economist Adam Smith (Wealth of Nations, 1776), the OECD billion, equivalent to nearly 6% of GDP, Viet Nam's digital
has developed into a system of tax administration standards economy has had the second-highest growth rate and scale,
that is widely applied in most countries today. The OECD second only to Indonesia. The economic transaction method
believes that a good tax system must ensure: is gradually shifting towards digitization and automation,
- Neutrality: Taxation should seek to be neutral and optimized through algorithms from artificial intelligence
equitable between forms of business activities. This implies products. The most significant of them are some powerful
that the same principles of taxation should apply to all forms forms of digital transformation such as e-commerce
of business, while addressing specific features that may platforms, transportation service market (car-hailing app),
otherwise undermine an equal and neutral application of travel and hotel market (online booking application);
those principles. the retail market for consumer products (online buying
- Efficiency: Compliance costs to business and and selling form); entertainment market (online viewing
administration costs for governments should be minimised application); online advertising market...
as far as possible. Especially from 2020, social distancing measures
- Certainty and simplicity: Tax rules should be clear and will accelerate this process. The spearheads of digital
simple to understand, so that taxpayers know where they government, digital society and digital economy have been
stand. A simple tax system makes it easier for individuals and drastically transformed as more people and businesses use
businesses to understand their obligations and entitlements. the Internet and participate in online activities. The way of
- Effectiveness and fairness: Taxation should produce the state management is also gradually changed to suit online
right amount of tax at the right time, while avoiding both conditions.
double taxation and unintentional non-taxation. Because it 3.2. Digital transformation and administrative reform in
influences the collectability and the administrability of taxes, taxation administration

FIGURE 1: ECONOMIC GROWTH OF VIET NAM IN PERIOD 1986-2020 Digital transformation has been positively
impacting administrative reform in taxation
activities in various important administrative
areas. According to the General Department
of Taxation's 2020 Taxation Review Report,
more than 99.9% of businesses nationwide
have made electronic declarations. Of which,
98.7% have applied electronic tax declaration
and more than 98% have integrated their
payment process with commercial banks.
Electronic invoices are also gradually
replacing conventional paper invoices.
Previously complicated administrative
procedures such as electronic tax refund
Source: World Bank are also digitized and automated. The

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