Basic Orientations in Perfecting Personal Income Tax Law in Vietnam

Complicated and time-consuming administrative procedures and the small amount of money collected make workers indifferent and uninterested in tax refunds. Therefore, the current solution to handle tax refunds is to reduce procedures.

In addition, the inspection after tax refund is also difficult because there is no nationwide income control information application. Individuals have as many deduction certificates as they need to refund. The Tax Department can only control the information of individuals with income in the province. The review of family deduction registration is also a concern for the Tax Department. Although the Tax Department knows about cases that are not eligible for family deduction, it cannot prevent them from the beginning and only checks when there is a decision to check at the paying organization. This is a limitation of the self-declaration and self-payment mechanism. In addition, according to the provisions of Circular No. 111, from July 1, 2013 onwards, tax codes will be issued to dependents who register for deductions, but the implementation of the regulations still faces many difficulties and obstacles.

Chapter 2 Conclusion

In Chapter 2 of the thesis, the author analyzes the current situation of personal income tax management in Thai Binh province. Being an agricultural province, with a large population but a relatively low population level. The average income per capita is still low compared to the general level of the country, the economic structure is still unbalanced, mainly the population is in agriculture. Therefore, personal income tax management activities in Thai Binh province have not yet met the requirements. In many cases, personal income tax collection is still difficult, the tax collection structure has not yet met the expectations of the state budget.

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In the past 5 years, the Thai Binh Provincial Tax Department has successfully completed the task of tax collection in general and personal income tax in particular. There have been many outstanding achievements in completing the task of collecting annual taxes into the state budget. This result is shown through the data tables of the thesis. However, it is also necessary to mention some limitations and shortcomings in the management of personal income tax in Thai Binh at present, which has been analyzed in Chapter 2 of the thesis. Clarifying the limitations and shortcomings of personal income tax in Vietnam at present is the basis for the thesis to propose solutions to improve the law and improve the effectiveness of personal income tax management in the current period in Chapter 3.

Chapter 3

SOME SOLUTIONS TO IMPROVE THE LAW AND IMPROVE THE EFFECTIVENESS OF PERSONAL INCOME TAX MANAGEMENT IN THAI BINH PROVINCE

3.1. Basic orientations in perfecting personal income tax law in Vietnam

In the current socio-economic conditions of our country in the context of international economic integration and the practical management of personal income tax, the Personal Income Tax Law has raised many problems requiring timely supplements and amendments. Therefore, in the coming years, the Personal Income Tax Law must ensure the following basic objectives:

Firstly, the completion of the law on personal income tax management is part of the process of reforming the national tax system. The requirement for administrative reform and modernization of tax management is being set as a key and urgent task of the financial sector to improve the efficiency of tax management and avoid negative impacts on the investment environment in particular and the entire economy in general. On May 17, 2011, the Prime Minister issued Decision No. 732/QD-TTg approving the Tax System Reform Strategy for the period 2011-2020, thereby defining the general objective in the Tax System Reform Strategy for the period 2011-2020 as: building a synchronous, unified, fair, effective tax policy system, consistent with the socialist-oriented market economy institution; reasonable level of encouragement to create conditions to promote domestic production and is one of the effective and efficient macroeconomic management tools of the Party and State. Building a modern, effective and efficient Vietnamese tax sector; unified, transparent, simple, easy-to-understand and easy-to-implement tax, fee and charge management based on three basic foundations; transparent tax policy institutions, regulations

Simple, scientific tax administrative procedures in accordance with international practices; high-quality, honest human resources; application of modern information technology with high connectivity, integration, and automation.

The Law on Personal Income Tax must ensure simplicity, transparency and clarity in the procedures for tax declaration, payment and tax administration, gradually applying modern information technology, creating favorable conditions for both taxpayers and tax authorities; thereby contributing to promoting the process of administrative reform and modernizing tax administration. To meet the above objectives, ensure consistency with the tax reform trend in countries around the world and the country's socio-economic conditions in the new period, the orientation of designing personal income tax policies in the new period needs to focus on the following issues:

+ Improve tax management in terms of management methods and administrative procedures in line with international standards; improve the efficiency and effectiveness of the organization and staff.

+ Complete and improve facilities and equipment to enhance propaganda, support and service provision for taxpayers.

+ Improve the capacity of inspection, examination and supervision of taxpayers' compliance with the law; apply information technology and electronic tax to improve the effectiveness and efficiency of tax management.

Second, the law on personal income tax management must be an effective tool for the state to increase budget revenue to meet the requirements of socio-economic development. To ensure a reasonable and stable structure of revenue sources, according to preliminary calculations, it is necessary to mobilize at least about 2-2.5% of GDP (9-15% of total budget revenue from taxes, fees and charges) from personal income tax in 2020 and higher in the following years. This mobilization level is reasonable based on the socio-economic development strategy 2011-2020 and the requirement to increase revenue to offset the shortfall from import tax and from state-owned enterprises. At the same time,

Increasing the proportion of personal income tax in the total budget revenue from taxes and fees also meets the long-term stability requirements of a modern tax system in Vietnam, in which personal income tax becomes a major tax of the tax system, including value added tax, corporate income tax and personal income tax.

Third, the principle of international integration must be ensured. When integration has become an inevitable trend, the requirement of similarity has become a common trend of countries around the world when building tax management laws in general and personal income tax management laws in particular. Ensuring this requirement will create a basis for promoting the development of foreign economic relations and attracting foreign investment.

3.2. Some solutions to improve personal income tax law through practical implementation in Thai Binh province

With the commitment to reduce the proportion of indirect taxes and increase the proportion of direct taxes, it can be affirmed that the Personal Income Tax Law is a progressive law, an important basis for reforming the budget revenue structure and integrating into the international economy. The goal of the Personal Income Tax Law is to ensure social justice, create conditions for everyone to be equal in their tax obligations to the country, narrow the gap between rich and poor, and regulate income in society. However, the issue of ensuring the feasibility of the Personal Income Tax Law in practice is difficult, because it stems from the characteristics of personal income tax as a direct tax levied directly on the income of individuals, which leads to difficulties in collection and control. We would like to propose some solutions to improve the quality of enforcement of personal income tax law in Thai Binh province as follows:

Firstly , perfecting the personal income tax policy in general and the legal documents on personal income tax management in particular, ensuring a unified and appropriate tax system, while meeting the requirements of budget revenue. The important and main reason leading to the current situation of many subjects

Taxpayers as well as tax authorities face difficulties in implementing tax laws and the situation of tax evasion and tax evasion by many subjects originates from the loopholes and obstacles in the current regulations of the personal income tax law. Therefore, when there is a complete and perfect personal income tax legal system, tax management will be much more convenient, and taxpayers will not have many opportunities to evade their tax obligations to the state.

Second , strengthen close coordination between agencies to combat tax fraud and tax evasion... to act as a deterrent to violators and promptly prevent tax appropriation, transfer pricing, and tax evasion.

Third, promote the dissemination of tax knowledge. The newly amended Personal Income Tax Law, so that people can understand and apply it flexibly and in accordance with the law, Thai Binh province needs to promote the dissemination of tax knowledge. Direct units and subordinate units to continue promoting administrative reform and modernizing tax management according to Decision No. 732/QD-TTg issued by the Prime Minister on approving the Tax System Reform Strategy for the 2011 period.

-2020, May 17, 2011. Coordinate with relevant departments and branches to disseminate personal income tax policies to each citizen in order to effectively implement the new Personal Income Tax Law. Proactively coordinate with relevant state management agencies, organizations and individuals paying income to organize tax registration for all individuals and organizations with taxable income. Proactively propose to develop regulations on coordination and information provision between tax agencies and state management agencies, especially in the fields of: real estate, labor, immigration, banking, securities transactions and the Treasury to serve tax management.

Organize training on personal income tax management for tax officials, tax payers, and support departments.

income paying agencies and individuals in declaring and calculating taxes; providing guidance and answering questions about policies, laws and administrative procedures on personal income tax.

Fourth , protect the rights of taxpayers and the responsibilities of tax authorities. Ensure the legality of tax inspections and audits. If tax inspections and audits are conducted without legal basis, they will lead to restrictions on taxpayers' rights. The Law on Tax Administration stipulates that tax inspections and audits must not hinder the normal operations of tax payers' agencies, organizations and individuals (Article 75 of the Law on Tax Administration). Tax inspections are regular activities conducted at the Tax Authority to assess the completeness and accuracy of information and documents in tax records and taxpayers' compliance with tax laws (Article 77, Clause 1). Tax records are inspected to determine the amount of tax payable, the amount of tax exempted, the amount of tax reduced or refunded. During this process, through inspections, the Tax Authority has the right to request taxpayers to explain and supplement information and documents. The purpose of the inspection is to determine the authenticity of the dossier or to serve as a basis for requesting the taxpayer to supplement or determine the tax rate when the taxpayer does not supplement the dossier, explain or supplement the tax dossier incorrectly. The inspection of the dossier and its consequences directly affects the rights of the taxpayer as well as the correctness in performing the official duties of the tax inspector. Therefore, the regulation on the time limit for issuing the inspection and explanation notice is the legal basis to protect the rights of the taxpayer. According to the Law on Tax Administration, the inspection decision is the basis for conducting inspections, the decision must be sent to the taxpayer within five working days from the date of signing, within five working days from the date of receiving the decision, if the taxpayer proves that the declared tax amount is correct or has paid the full tax amount, the tax authority shall cancel the tax inspection decision (Article 73.3.d). The tax authority conducts inspections when there are signs of law violations, of course, only after the inspection can it be known who is the taxpayer.

Is paying taxes illegal? To avoid illegal inspections, inspections must be based on procedures and the scope of inspection recorded in the inspection decision to ensure the rights of taxpayers. In case of inspections that are not within the authority or scope of the inspection decision, taxpayers have the right to complain and file a lawsuit to request compensation for damages when the inspection causes material and spiritual damage to taxpayers.

Protecting the right to confidentiality of taxpayer information. Tax inspections and audits are conducted regularly or periodically in relation to information on assets and business activities of enterprises. According to Article 73 of the Constitution, citizens are guaranteed the confidentiality of letters, telephones, and telegrams. This provision only covers information on a number of personal sources, while in daily life, production and business, there is a lot of other information that needs to be kept confidential, including information on income and information on taxpayers. However, the Law on Tax Administration has stipulated the obligation to keep taxpayers' information confidential under Article 73 of the Law on Tax Administration, accordingly, the Tax Authority, tax officials, people who have been tax officials, and organizations providing tax procedure services must keep taxpayers' information confidential according to the provisions of law, except in some cases when competent authorities request information to carry out investigation, prosecution, trial and state management activities. However, the Law on Tax Administration only regulates public service activities. In fact, tax collection management is related to the activities of income-paying agencies and organizations, so the confidentiality of taxpayers' information has not been mentioned. So can income be disclosed through the disclosure of tax payment information? And if not allowed, which Law will regulate the protection of this information confidentiality? According to the Law on Tax Administration, the Tax Authority only has the right to disclose information when taxpayers violate their obligations such as: tax evasion, tax fraud, delay in paying taxes on time; violations of the law.

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