Survey Results on Inspection Time Criteria

Low level, lack of experience in handling problems arising in performing tasks also prolongs the inspection time. Statistical results over the years of cases of problems leading to delay in providing data, not signing the minutes as shown in the table below:

Table 2.10: Problems arising at the enterprise

STT

Source: An Giang Provincial Tax Department

Therefore, the factor " Tax inspection time is correct as prescribed without needing to be extended" is rated very low by businesses and tax officials. This is a point that needs to be noted so that tax authorities can grasp and propose specific policies and regulations in handling cases where businesses intentionally delay or extend the time to provide data and sign inspection records.

2.3.2.2. Tax inspection activities at enterprises

Tax inspection activities at enterprises are evaluated through the following table:

Table 2.11: Survey results on inspection performance criteria

V4: The inspection team performed in accordance with the prescribed functions and tasks.

Number of votes

Source: Appendix 3

The factors " The inspection team performed in accordance with the prescribed functions and tasks" and "The inspection staff enthusiastically guided enterprises on tax policies" were evaluated by enterprises and tax officials as relatively high with the factors of agreeing and strongly agreeing. To ensure the annual plan targets, the Tax Department's Inspection Department often analyzes the financial statements and tax settlements of enterprises and proposes to issue inspection decisions that only include a few contents.

In the case of enterprises with risks detected through analysis, almost no comprehensive inspection decisions are issued. The above work is only really effective if the analysis is accurate, does not miss any risk content, and is performed by qualified and experienced staff. Therefore, the factor "Tax inspection content is reasonable" is still not highly appreciated. In fact, the current level of inspection staff is uneven, some new staff are transferred from other departments, so the risk analysis and assessment work has many shortcomings, and some staff do not have the right awareness of inspection work, so the factor "Qualifications of the team leader and members of the inspection team meet the requirements of the task" is not highly appreciated with 12% strongly disagreeing, 26% disagreeing and 24% having no opinion. In addition, some officials, for personal purposes, only propose to inspect small contents that are not representative of the risks of the enterprise in order to be able to carry out on time and achieve their own personal goals, or during the inspection process, they discover violations outside the content of the decision but do not promptly report to expand the scope of the inspection, thereby greatly affecting the quality and purpose of the inspection work, damaging the image of the tax inspection work towards enterprises. There are still cases of "Inspection officials showing signs of causing difficulties, causing disturbances and extortion from enterprises" , chasing after the planned targets assigned by the General Department of Taxation, some inspections have many errors, even professional errors, which have been criticized by the superior Inspection agencies and the State Audit, some cases of handling complaints have rejected the inspection conclusions and decisions on administrative sanctions.

Inspection work has a positive effect on enterprises in recognizing errors to correct them in accordance with legal regulations. Most enterprises that undergo tax inspections highly appreciate the effect of inspections in correcting errors through inspections and wish to be inspected by tax authorities periodically every year to promptly correct errors during the implementation process (avoid prolonging violations that will be severely punished, affecting the financial situation of the enterprise). Besides, there are still some enterprises that commit tax fraud and evasion, always prepare accounting books and documents to deal with tax authorities, do not admit violations of tax laws. Not willing to cooperate with tax authorities in

implementation of inspection decisions as well as implementation of inspection conclusions and decisions

to process.

Implementing the mechanism of self-declaration, self-payment, and self-responsibility of taxpayers, tax authorities do not perform a specialized management role for enterprises. Tax authorities support enterprises in implementing tax policies and laws, while strengthening inspection, collecting and appropriately sanctioning violations of tax laws. This has had a deterrent effect on enterprises in complying with tax laws.

According to the results of the Provincial Competitiveness Index (PCI) assessment, the informal cost index of An Giang province is ranked relatively low compared to the region and the whole country, including many "service" costs. The tax sector is one of the sensitive sectors, receiving much attention from society, especially on issues related to these informal costs. According to many unofficial sources of information collected, businesses have to spend time and resources to serve the inspection and examination work of the tax sector, and there are even some officials and public employees doing the inspection work who extort money and make things difficult for businesses. This is an issue that tax leaders are very concerned about and are looking for ways to rectify with various solutions such as reforming administrative procedures, strengthening propaganda, supporting legal policies for taxpayers, organizing dialogues with taxpayers, announcing a hotline to promptly receive feedback on harassment by tax officials, regularly educating and improving the ethical qualities of inspectors, and strengthening supervision of inspection teams. However, the situation has only temporarily subsided and cannot be completely resolved.

Tax inspection activities help promptly correct illegal acts of taxpayers, thereby enhancing support for taxpayers to promptly resolve tax policy problems, creating an equal business environment among enterprises.

Through inspection work, we detect common tax law violations:

* About Value Added Tax:

Table 2.12: Number of violating enterprises and amount of VAT collected

Unit: million VND

STT

Source: An Giang Provincial Tax Department

+ Regarding deductible value added tax: Late declaration and deduction of input VAT, invoice value over 20 million VND but no payment via bank, declaration and deduction of value added tax for input invoices not serving production and business, invoices not belonging to enterprises, even using illegal invoices of absconding enterprises to commit fraud and tax evasion.

+ Using illegal invoices of enterprises to declare deductions and appropriate tax refunds from the State budget. The tricks of enterprises are very sophisticated, the stages of implementation of VAT invoices, payment documents... are all carried out by a group of people, only through verification F1, F2... can violations be detected. In some cases, enterprises use invoices with real names and tax codes of enterprises to print invoices and issue them to other enterprises for deduction declaration; purchase and sale of goods with enterprises that abandon their business locations (after the date of invoice issuance and tax declaration); establish enterprises but do not have specific office headquarters, or if they do, they are mainly rented, without facilities, without employees working in accordance with sales, volume of goods sold, and corresponding tax refunds.

+ Regarding value added tax on goods and services sold: Wrongly declaring VAT rates for products from seafood processing; declaring selling prices of some items lower than market prices; receiving agent commissions but not issuing invoices.

VAT invoice; not recording revenue, not declaring output VAT on goods and services used for exchange, gifts, internal consumption...

+ Not declaring revenue from construction activities for completed and accepted construction works; not declaring revenue from pre-collected money for real estate business activities...

* On corporate income tax:

Table 2.13: Number of violating enterprises and amount of corporate income tax collected

Unit: million VND

STT

Source: An Giang Provincial Tax Department

+ Depreciation of fixed assets for indefinite land use rights, for assets not serving production and business, and assets not owned by the enterprise.

+ Interest expense on loans not used for production and business, personal loans exceeding 150% of the basic interest rate

version prescribed by the State Bank, loan to supplement the missing charter capital.

+ Determining the cost of land use rights transfer activities is not in accordance with regulations; transferring all production and business costs to the cost of capital even though there are still unfinished products.

+ Accounting for bonuses that are not salary in nature and are not in accordance with the financial regulations of the unit.

+ Not declaring and paying corporate income tax for dependent accounting branches engaged in production and processing of goods.

+ Enterprises account for expenses for repairing and upgrading fixed assets, interest on loans for capital investment in basic construction, and fines for handling tax violations in production and business expenses. Enterprises with construction activities often account for labor costs inconsistent with monitoring records, and the volume of materials exceeds