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Law changes fines for tax violators

The revised Law on Tax Management introduced in July has given tax agencies more tools to fight tax fraud, said the vice-head of the Department of Taxation’s Tax Policy Division, Vu Van Cuong.

Under the revised law, there are more tax enforcement measures, including measure on customs procedures for importing and exporting goods – and measures to ensure the collection of tax debts when people default.

Fines for taxpayers who delay paying taxes have been increased if the period is longer than 90 days, he said, noting that previously, the daily fine just accounted for 0.05 per cent of the unpaid tax, regardless of time. However, since July, the rate has been 0.07 per cent for debts older than 90 days.

Violators who make tax declarations that reduce the tax payable or to increase tax refunds have to pay a fine equal to 20 per cent of the total tax instead of 10 per cent as previously.

Cuong said that tax agencies now inspected tax-related activities at the offices of companies yearly to set-up a database on them and then classify them into groups based on their conformity to the law – good, average or bad.

The inspections centre on companies where tax frauds are not uncommon, such as traders of farming products; importers or exporters using sales invoices issued by companies not based in the growing areas; companies registering to provide multi services in different sectors but whose registration capital is small; companies whose scale of business is many times higher than their capital.

In efforts to help people fulfill their duty and save time and other resources for both taxpayers and agencies, the Vietnam general Department of Taxation (GDT) has developed a plan to improve the quality of tax agents by 2020. (The agents prepare tax returns and any declarations necessary.)

Under the plan, the country hopes to have at least 3,000 tax agents by 2015 and about 8,000 by 2020.

However, at present, according to the general department’s statistics, there are only 129 tax agents in the country, mostly in Hanoi and HCM City.

Chairwoman of the Vietnam Tax Consultancy Association Nguyen Thi Cuc said misunderstandings about the operation of tax agents made companies hesitant about using their services.

Cuc said that to promote tax agency work, the legal framework should be improved and agents come under a special law.

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