Key tax reforms set to boost efficiency and digital governance

The current Law on Tax Administration consists of 17 chapters and 152 articles. In contrast, the draft amended Law on Tax Administration has been streamlined to just 9 chapters and 53 articles. This demonstrates that the draft closely follows the government's directive that laws should primarily set out principles and provide a legal framework, while detailed regulations will be specified in subsequent legal documents.

Under this approach, specific provisions will be delegated to the government through decrees and to ministries and sectors via circulars for guidance.

This method of legislative drafting- particularly as applied to the Law on Tax Administration- is aligned with international best practices. It ensures that the law remains stable, long-lasting, and resilient to frequent amendments that might otherwise be necessitated by changes in the socioeconomic environment or rapid technological developments.

Overall, I believe the draft law has effectively institutionalised the Party’s directions and the state’s policies on digital transformation, modernisation, and the application of technology in tax administration. This marks an important step forward in enhancing the effectiveness and efficiency of tax management.

Once the amended Law on Tax Administration is approved by the National Assembly, expected at the tenth session later this year, the regulatory framework will differ significantly from previous approaches.

Instead of the government issuing only a few decrees to clarify select provisions of the law, it is now expected that multiple decrees will be issued. Subsequently, the Ministry of Finance will promulgate a series of guiding circulars. As such, it is still too early to comment in detail on the content of these documents.

Nevertheless, businesses, organisations, and individual taxpayers can rest assured as during a recent consultation session on the draft law hosted by the Vietnam Chamber of Commerce and Industry, Dang Ngoc Minh, deputy director general of the General Department of Taxation under the Ministry of Finance (MoF), declared that the new law will simplify the tax system by eliminating at least 44 per cent of current administrative procedures, including unnecessary invoices and documentation.

Minh also made a strong commitment that no new tax administrative procedures will be introduced- particularly those related to invoicing, tax declaration, calculation, finalisation, refunds, or exemptions. The goal is to create the most improvements for businesses and individual taxpayers in fulfilling their tax obligations.

Yes. At the same consultation session on the draft law, GDP’s deputy chief reiterated the MoF’s commitment to a fundamental tax administration reform before the Prime Minister.

This includes transitioning from a “function-based management model” to a “taxpayer-centric model combining management by function and taxpayer profile”; reducing tax administrative procedures by at least 44 per cent; and refraining from issuing any new administrative procedures that could complicate compliance.

The tax authority leader also called on media and press agencies to monitor and oversee tax administration activities at both central and local levels. Any instances of inconvenience caused to taxpayers should be promptly reported to the relevant authorities.

The new tax administration process is being designed to align with this model shift and with the restructuring of the IT system. It aims to ensure the use of modern, synchronised, integrated, and efficient digital technologies, with automated data processing capabilities.

One of the central objectives in drafting this law is to simplify tax administrative procedures. This includes reviewing and cutting down the number and complexity of documents required for tax registration, declaration, payment, refund, exemption, and reduction.

All tax transactions are expected to be carried out electronically, in line with international practices. The guiding principle is to place taxpayers at the centre of service delivery.

Since the draft is designed to provide the foundational principles of tax administration and acts as a framework law, it is still too early to comment on specific clauses before the issuance of decrees and circulars. However, I do have some concerns regarding certain aspects.

For example, under the draft, household businesses and individual business operators are required to register for tax concurrently with their business registration. To make this feasible, there must be interoperability between tax authorities and business registration agencies.

As per the PM’s directive, all government management agencies – including tax and business registration authorities, as well as the banking system – must be interconnected. Currently, this interconnection remains insufficient due to historical administrative structures, where tax and business registration were managed by separate government agencies.

However, following the merger of ministries and agencies, the situation has improved significantly, with the Ministry of Finance now acting as the single coordinating body.

Moreover, the national citizen database, VNeID, has also been upgraded to Level 2, enabling the integration of multiple documents, including health insurance cards, driving licences, vehicle registrations, and national ID cards.

This integrated application, with its wide array of digital utilities, supports both the digital citizen and the digital government.

It helps streamline administrative procedures, making them faster and more convenient. These advancements will create the necessary conditions to enable seamless integration when individuals or households register for tax at the same time as business registration.

Next year and the following year, there are important amended tax laws coming into effect on the VAT, corporate income tax (CIT) and special sales tax (SST), which are of concern to the businesses and those affected.

VIR will hold a conference themed “Tax Amendments to Promote Business Activities” from 8:30 am on August 14.

A conference themed “Tax Amendments to Promote Business Activities” held by VIR has attracted thousands of people both online and offline.