The Saigon Times
The inspection work of the general Department of Taxation in 2012-2014 contained several shortcomings and mistakes that affected the interests of businesses.
This is a conclusion of the government Inspectorate of Vietnam published on Monday. In this conclusion, the agency reveals a series of shortcomings and weaknesses of the general Department of Taxation and its agencies in their planning, inspection and post-inspection jobs.
Specifically, the annual plans for tax inspections into enterprises drawn up by tax authorities are inappropriate and constantly adjusted. The general Department of Taxation does not appraise such plans thoroughly.
The adjustment and cancellation of inspection plans and decisions by the general Department of Taxation and local tax departments are also groundless. A number of enterprises have been named in an inspection plan for many years, but the tax agencies still have not done their job, putting such enterprises under tenterhooks.
The inspection plans of the tax authorities have always been unmet, reaching a very low level in certain years (for example, only 29 percent in 2012).
In addition, the general Department of Taxation has not regularly monitored, examined and supervised adherence to inspection conclusions, collection of unpaid taxes and post-inspection sanctions. Also, late payments are not well managed.
Those are the reasons why the post-inspection results are low.
The government Inspectorate also said the lengthy process of inspection has affected operations of corporate taxpayers.
Notably, some inspection conclusions of the general Department of Taxation are inappropriately based on the guidelines on investment incentives, which is detrimental to the interests of enterprises. The tax authorities have changed the gross profit-to-cost ratio, the ratio of pre-tax profit to total expenses during the special inspections on transfer pricing without any foundation.
The Ministry of Finance and the general Department of Taxation have issued some guiding documents in the field of taxation that are unspecific and not in accordance with regulations.
For example, Dispatch 7227/BTC-TCDN dated June 7, 2010 and Dispatch 15827 released in 2012 are inconsistent with Circular 228/2009/TT-BTC. The guidelines on not collecting value added tax on loan interest from non-credit organisations and individuals in 2009-2011 go against the Law on Value Added Tax, (though the finance ministry has reported to the prime minister and received the nod).
Meanwhile, the general Department of Taxation has issued Dispatch 3342/TCT-CC instructing the collection of foreign contract tax which does not agree with Circular 134/2008/TT-BTC and Circular 60/2012/TT-BTC, affecting the interests of the business.