The Ministry of Finance has just sent the Government a proposal to develop a draft Law amending and supplementing a number of articles of the Securities Law, the Accounting Law, the Independent Audit Law, the State Budget Law, the Law on Management and Use of Public Assets, the Tax Administration Law, and the Law on National Reserves.

In particular, it is proposed to abolish Clause 3, Article 75 of the Law on Tax Administration on the regulation on the amount of interest payable to taxpayers when tax authorities are late in processing tax refunds with an interest rate of 0.03%/day.

One of the reasons is that there are no specific regulations on the authority, order, procedures for refunding interest to taxpayers and payment costs, so currently the tax authority has no basis for implementation (there is no source of funds to pay interest).

On the other hand, according to Clause 4, Article 23 of the Law on State Compensation Liability 2017, the interest payable to the taxpayer is calculated at the interest rate arising from late payment in the absence of an agreement as prescribed by the Civil Code at the time of accepting the compensation claim.

The provisions on interest payable in the two legal documents mentioned above are not consistent.

Meanwhile, Clause 9, Article 18 of the Law on Tax Administration also stipulates the duties of tax administration agencies: "Compensate for damages to taxpayers according to the provisions of law on State compensation liability".

“Amending and supplementing regulations on taxpayers' compensation requests related to interest payable by tax authorities in accordance with the provisions of the Law on State Compensation Liability is a measure to protect taxpayers' rights and ensure transparency and fairness in tax administration, improve taxpayer compliance and satisfaction,” the Ministry of Finance stated.

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Proposal to remove the regulation of paying interest of 0.03%/day for people whose tax refunds are late. Photo: Nam Khanh

Facilitate fast tax refunds

The Ministry of Finance believes that it is necessary to amend and supplement regulations on the authority to decide on tax refunds; the tax agency that directly manages the taxpayer and receives the tax refund dossier will handle the tax refund, avoiding shifting responsibility between the Tax Branch and the Tax Department.

According to the Ministry of Finance, the current tax management law does not clearly define the responsibilities of civil servants in tax management, especially in the field of tax refunds. In fact, at the Ho Chi Minh City Tax Department, a number of civil servants were convicted by the Court and had to serve prison sentences. This case caused confusion and caution in handling tax refund applications by tax officials nationwide, affecting the time it takes to process applications for taxpayers.

Therefore, it is necessary to supplement regulations on the responsibilities of tax officials in handling tax refund dossiers in particular and handling administrative procedures for taxpayers in general.

Additional subjects temporarily suspended from exiting the country due to unpaid taxes

The current Law on Tax Administration stipulates that Vietnamese people leaving the country to settle abroad and foreigners must fulfill their tax payment obligations before leaving Vietnam; if they have not fulfilled their tax payment obligations, their exit will be temporarily suspended according to the provisions of the law on exit and entry.

Clause 1, Article 2 of the Law on Tax Administration stipulates that “taxpayers” include both organizations and individuals. Therefore, the application of temporary exit suspension measures must be applied to subjects that are individual taxpayers and other individuals who are legal representatives of tax-paying organizations, not just to individuals who are legal representatives of enterprises as prescribed in Clause 7, Article 124.

The Ministry of Finance proposes to add more subjects to be temporarily suspended from exiting the country, including: individuals who are legal representatives of cooperatives, cooperative unions, individuals who are business owners, and individual entrepreneurs.

According to the Ministry of Finance, adding cases of temporary suspension of exit will help improve the effectiveness of tax debt enforcement, increase flexibility in simultaneously applying enforcement measures appropriate to the reality at tax agencies, ensure correct, full and timely collection to the state budget, and promote economic growth.