MANY TAX AND CUSTOMS POLICIES PROVIDE SUBSTANTIVE SUPPORT TO BUSINESSES

At the recent conference on tax and customs policies and administrative procedures for 2023, jointly organized by the Vietnam Chamber of Commerce and Industry (VCCI) and the Ministry of Finance, VCCI President Pham Tan Cong expressed appreciation for the resolute determination and reform efforts demonstrated by the Ministry of Finance, the tax sector, and the customs sector.

He highlighted the Ministry’s significant role in providing support to businesses, enabling them to sustain and revive their operations amidst the volatile domestic and international markets, particularly in the aftermath of the COVID-19 pandemic.

The Ministry of Finance, the General Department of Taxation, and the General Department of Customs have actively contributed to the streamlining of administrative procedures and the effective oversight of processes. This approach has laid a solid groundwork for companies to curtail costs and fulfill their obligations to the State.

The activities of MoF agencies are measured by business satisfaction, serving as a key indicator of their capacity, performance and efficiency. The communication, guidance, and policy dialogues are implemented through diverse formats and varied content, showcasing the innovative thinking of authorities in their engagements with the business community.

Sustaining business support

During the recent conference, Deputy Minister of Finance Cao Anh Tuan underscored the proactive role undertaken by the Ministry of Finance in researching and proposing impactful financial measures to competent authorities. This notably includes proposals on tax, fee and land rent extension, as well as exemptions and reductions designed to bolster businesses, citizens, and the overall economy. In line with this commitment, the Ministry of Finance submitted a comprehensive set of 60 legal documents to relevant authorities, with a cumulative value of VND129 trillion in 2020, VND145 trillion in 2021, and VND233 trillion in 2022.

For the year 2023, the Ministry of Finance has conducted research and proposed to competent authorities a suite of solutions encompassing tax, fee, and land rent exemptions, reductions and extensions, amounting to a total value of approximately VND196 trillion. This includes VND121 trillion in extended amounts and VND75 trillion in reduced or exempted taxes, fees, charges and land rents. Despite the challenges posed by a strained State budget, the Ministry of Finance remains committed to balancing regular expenditures, sustaining capital for developmental investments, and addressing the escalating demands for social security.

The unwavering commitment to support businesses and citizens in all circumstances is evident in the persistent efforts to implement these support solutions. The resilience displayed by the business community and entrepreneurs, coupled with the effective execution of support measures by authorities at all levels, has yielded optimistic results for State budget revenue. As of December 12, the State budget revenue reached VND1,500 trillion, achieving 97.5% of the estimated target.

With a specific emphasis on the tax and customs sectors, numerous initiatives have been implemented to reform and modernize administrative procedures, fostering a conducive environment for businesses. A testament to this commitment is the ministry has consistently secured a position in the top three of the Public Administration Reform Index (PAR Index) since 2014, spanning nine consecutive years, as declared by the Government's Administrative Reform Steering Committee.

The electronic tax declaration system, a pivotal component of this modernization effort, has been successfully deployed across all 63 provinces and cities, as well as in 100% of affiliated tax departments. Impressively, 99.9% of companies utilize the electronic tax declaration service, with 99% opting for electronic tax payments, and a comparable 99% engaging in online VAT refund processes. Notably, the nationwide implementation of the electronic invoice system, commencing July 1, 2022, has further streamlined processes for organizations, companies, business households and individual entrepreneurs, with a particular emphasis on those in direct consumer-oriented sectors such as food and beverage, retail and entertainment.

The Ministry of Finance inaugurated the Electronic Information Portal for foreign suppliers on March 21, 2022, facilitating global accessibility. As of November 30, 2023, a notable 74 foreign suppliers had registered, declared, and paid taxes through the portal, contributing to a total tax revenue of nearly VND12 trillion.

Within the customs sector, ongoing efforts to expedite administrative reform have prioritized facilitating import and export activities while fostering the development of a professional, transparent, and efficient Vietnam Customs. Beginning in 2023, the sector outlined 10 reform targets, proposing specific solutions for implementation. Key objectives include reducing red channel declarations by 5%, decreasing yellow channel declarations by 10%, cutting customs clearance and release time by 10%, and increasing voluntary participation in the customs compliance support program by 20%.

The Vietnam Automated System for Seaport Customs Management (VASSCM) has been effectively deployed, simplifying procedures for goods removal and reducing direct interactions between customs authorities and businesses. This has led to decreased travel time for companies and addressed congestion issues at ports, warehouses, and yards.

The Ministry of Finance has executed tax reduction commitments embedded in crucial agreements within the framework of 15 free trade agreements (FTAs) and two bilateral trade agreements (BTAs). Encompassing over 80% of Vietnam's import and export value, these agreements have yielded effective FTA tax rates in the 2022-2027 period, which are 0.3-9.0% lower than the Most Favored Nation (MFN) import tax tariff of 11.9%. In 2023, FTA tariffs ranged from 0.3% to 8.2%, with further reductions anticipated to 0.3% - 6.5% in 2027.

To ensure financial stability, the customs sector has calculated and mobilized revenue sources, surpassing State budget revenue targets. Currently, all administrative procedures under the jurisdiction of the Ministry of Finance and its affiliated agencies are accessible online. Of these, 464 procedures of Level 3 and Level 4 (57.07%) are provided online, with 296 successfully connected and integrated into the National Public Service Portal, exceeding government expectations by 30%. This comprehensive digitization effort has resulted in significant time and cost reductions, elevating satisfaction levels and garnering high appreciation from organizations, individuals, and businesses engaged in transactions with financial agencies.

Further modernizing tax and customs sectors

During the conference, corporate leaders and business associations acknowledged the commendable progress made in the tax and customs sectors. However, they emphasized that companies continue to grapple with practical challenges arising from the diversity of production and business activities, coupled with delays in policy implementation. Specifically, in the realm of taxation, numerous companies highlighted concerns related to Value Added Tax (VAT) refund procedures, electronic invoicing, and local tax payment regulations for entities operating across multiple provinces. Recommendations were put forth on maintaining the credibility of businesses facing challenges in adhering to tax payment deadlines.

In the customs domain, companies raised issues regarding the processing time for import licenses for precursor chemicals, the refund of import and export duties, and proposed reductions in tax refund processing time. There were also calls for clear regulations outlining the frequency of goods screening, along with a structured mechanism for tax refunds applicable to export processors.

In addition to these specific concerns, attending companies collectively advocated for a comprehensive review and equitable application of tax policies across all economic sectors. They expressed dissatisfaction with multifaceted inspections, citing disruptions to business operations. Recommendations were put forth to the Ministry of Finance, urging a reconsideration of policies related to tax, fees, and land rent exemptions, reductions, and extensions until the culmination of 2024. The proposal further suggested exploring innovative approaches to streamline tax refund procedures, reinforcing non-tariff measures, and implementing an interconnection mechanism between the tax and customs sectors with other administrative agencies.

During the conference, senior officials from the Ministry of Finance, the General Department of Taxation, the General Department of Customs, and other relevant agencies promptly addressed queries stemming from business operations. Deputy Minister of Finance Cao Anh Tuan affirmed the Ministry's commitment to refining mechanisms and policies, expediting administrative procedure reform, and modernizing the tax and customs domains. This approach aims to foster a business environment characterized by equity, transparency, and facilitation, allowing companies to fulfill their tax obligations to the state budget seamlessly.

In conjunction with measures devised by the Government, the Prime Minister, and central and local authorities, the Ministry hoped that Vietnamese enterprises will actively seize opportunities for innovation, thereby augmenting their competitiveness and overall development.

Source: VCCI