Taxation department vows to remove troublesome tax procedures

Taxation department vows to remove troublesome tax procedures

VietNamNet Bridge – The General Department of Taxation (GDT) has said it would simplify several tax procedures that businesses complain are too complicated and time consuming.

Hoang Thi Lan Anh, deputy head of the GDT’s Reform and Modernization Division, said that GDT will remove unnecessary administrative formalities which cause inconvenience to enterprises.

The decision was made after the government released Resolution No 19 on simplifying administrative procedures.

A World Bank report showed that businesses in Vietnam had to spend an average of 872 hours a year on the procedures. And if not counting the time spent on social and health insurance policy tax payments, the figure would be 537 hours.

One of the most outstanding changes in the tax procedures is that enterprises with annual turnover of VND50 billion and lower will declare VAT (value added tax) on a quarterly basis instead of monthly, as currently requested.

Under the current regulations, the quarterly VAT declaration is only applied to businesses with revenue of less than VND20 billion.

Businesses will be required to make corporate income tax declarations once a year, and they will themselves estimate the tax totals they have to pay in advance.

At present, enterprises have to make tax declarations on a quarterly basis, and annually, which costs them a great deal of time.

GDT is going to propose the National Assembly to lift the cap on expenses for ads, marketing, commissions and conferences. Under its proposal, enterprises will be allowed to spend 15 percent of total expenses at maximum on ads. Meanwhile, no limits would be imposed on the other expenditure items that serve enterprises’ marketing activities.

If the proposal is ratified by the National Assembly, it will “untie businesses” from unreasonable obligations, a lawyer said.

“Businesses must be given the right to decide how much money they spend on marketing campaigns to optimize their profits,” he said.

According to Anh, the Ministry of Finance has nearly completed the compilation of a circular on tax management. It is expected that the circular would take effect on October 1.

Under the draft circular, all businesses will have the right to register the input VAT deduction payment method.

Under the current regulation, only enterprises which invest more than VND1 billion in fixed assets (production lines, machines and equipment) can apply the tax payment method.

Meanwhile, enterprises spend less than VND1 billion on fixed assets and have to pay tax on the added value, which is believed to put enterprises at a disadvantage.

Therefore, experts think that the regulation hinders the development of small enterprises.

According to Nguyen Thi Cuc, chair of the Vietnam Tax Consultancy Association, if the reform can be implemented, this would help reduce the amount of time businesses have to spend on tax procedures by 201 hours.

TBKTSG

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