Plugging tax losses remains key

General Department of Taxation (GDT) deputy general director Bui Van Nam said the GDT in 2011 would step up estimating the state budget, including methods to prevent smuggling, illegal businesses and tax evasion.

According to a GDT report last week, through October 2010, there had been 18,141 enterprises investigated and checked with total reclaimed taxes of VND4 trillion ($205.8 million). It includes VND2.7 trillion ($136.1 million) from investigated enterprises and the remaining from checked businesses, representing 50 per cent and 14 per cent increases year-on-year respectively.

“Among the 825,769 checked tax declaration documents, the GDT detected 19,612 incorrect ones, which raised tax collection by $25.8 million,” said the GDT report.

Nam said tax evasion resulted from Vietnam deeper integrating in the world, especially after it joined the World Trade Organization.

“The economy has become more open and many new economic businesses have appeared, making it impossible for some policies to adjust in time,” Nam said.

“Therefore, some enterprises have taken advantage of our policies to evade taxes. Besides, related organisations have not really cooperated to provide information and share tax payment responsibility with tax authorities,” he added.

The GDT report showed that in 2010, the GDT saw many foreign-invested enterprises (FIEs) using transfer pricing to dodge taxes, which created losses in the state budget.

Specifically, the GDT inspected foreign invested automobile makers and tea producers and traders in Lam Dong province and carried out collecting arrears of $6.8 million, lessening the losses of more than $71.8 million.

“During 2006-2010, the taxation sector inspected 316,362 enterprises and collected VND1,151 billion ($56.5 million) in back taxes, which will help prevent illegal taxation activities,” said Nam, adding tax authorities would strengthen examining special subjects such as tax loss and transfer pricing prevention and tax reimbursement.

“The GDT will retrieve tax losses that have been checked and concluded by the tax authorities, with 80 per cent of this collection must be done within 90 days,” Nam said.