Filing big tax changes

Why has the revised Law on Tax Administration been decided to take effect earlier than scheduled?

As the law regulates tax collections, more time will be needed to build and enact guiding documents as well as prepare necessary infrastructure to help us achieve online tax management targets.

Since the law seeks to tackle many limitations and problems arising in practice, to accelerate tax administrative procedure reforms and ameliorate the investment environment the Ministry of Finance (MoF) decided on the law application a half year earlier as proposed by the National Assembly Standing Committee.

How will the revised law benefit businesses and taxpayers once it comes into force?

The main benefits are helping taxpayers reduce tax declaration frequency, shorten the time for handling tax refund procedures and tax record deadline extension and simplify tax administrative procedures.

Particularly, the current tax law regulates tax declaration be made monthly, yearly, quarterly or each time tax obligations arise depending on the kind of tax. For instance, when the revised Law on Tax Administration takes effect, small- and medium-sized enterprises and trading households can make value added tax declarations quarterly instead of every month.

The time to settle procedures on extending tax record deadline will be reduced from five to three working days. The time to settle tax refund procedures will be halved.

The MoF and National Assembly’s Finance and Budget Committee have yet to reach consensus on tax payment deadline extension. What authority should be assigned the task in your view?

The Finance and Budget Committee proposed it would be the task of the National Assembly Standing Committee in case tax payment extension is applied on a broad scale. The government shall extend payment deadlines in each particular case and leaders of direct tax management bodies will decide on tax amounts with extended payment as well as time for extension based on taxpayer records.

However, if the National Assembly Standing Committee takes charge of setting tax payment deadline extension the process might be prolonged as it will involve a lot of procedures.

Meanwhile, organisations and individuals bogged down with difficulties need early help.  

The MoF, thereby, proposed if tax extension affects state budget the government shall report to the National Assembly Standing Committee before making decisions, otherwise the government will make final decisions.

How will it effectively deal with tax fraud?

If all tax refund records are checked, it would break the risk control principle currently applied worldwide. Besides, it could drive up costs significantly whereas our current human resources are insufficient to handle the task.

However, to abate tax fraud, the MoF proposed within one month since getting tax refunds, all tax records of the following four most sensitive groups will be checked. Businesses  with accrued tax losses in two consecutive years or losses surpassing their chartered capital; getting tax refunds from realty, trade and services areas; having business locations changed within 12 months from the date of getting refund decisions; and in case of unexpected changes between taxable revenue and tax refund amount within 12 months. In other cases, checks will be decided by tax and customs bodies based on risk degrees.