DECISION

APPROVAL OF TAX REFORM STRATEGY UNTIL 2030

PRIME MINISTER

Pursuant to the Law on Government Organization dated June 19, 2015; the Law on Amending and Supplementing certain Articles of the Law on Government Organization and the Law on Local Government Organization dated November 22, 2019;

Pursuant to the Government's Decree No. 87/2017/ND-CP dated July 26, 2017, defining the functions, tasks, powers and organizational structure of the Ministry of Finance;

Upon the request of the Minister of Finance,

HEREIN DECIDES

Article 1. Approval of "Tax reform strategy until 2030” with the following main subject matters:

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1. Viewpoints

a) Taxes, fees and charges serve as tools that help the State manage, regulate and stabilize macro-economy, restructure the economy, and mobilize resources to ensure significant, efficient, fast and sustainable economic growth; balance economic development and environmental issues against the goals and requirements of the 10-year socio-economic development strategy for the 2021-2030 period;

b) Build a perfect and synchronous tax policy system with restructured state-budget revenues with the intention of ensuring sustainability and contribution to improving the investment and business environment towards broadening tax base; rationally pooling resources into the state budget with a view to ensuring consistency, fairness and neutrality in tax policies; ensuring that tax policies are simple, transparent, clear, comprehensible and easy to apply. Tax policies are presented in legislative documents on tax only; are perfected and revised in order to ensure consistency in terms of legal value among tax-related laws and relevant legislative documents;

c) Tax regulatory framework continues to be perfected in order to help to streamline administrative procedures and boost use of information technology to reduce costs of compliance with tax legislation of the public and enterprises; concurrently, formulate legal bases for constructing Vietnamese tax authorities that are modern, professionally operated, effective, efficient, upright and fully qualified in order to carry out and duly take control of objectives and requirements of tax reforms.

2. General objectives

Continue to perfect tax policies and restructure state budget revenues with a view to covering all of revenues, expanding tax collection basis, especially the basis for new tax collections, and conforming to international conventions; ensuring that the proportion of domestic tax collections and the proportion of indirect taxes to direct taxes are at a reasonable level; making sure that taxes, fees and charges imposed on property, natural resources, and environmental protection are properly exploited; minimizing the integration of social policies into tax legislation and tax exemption or reduction policies in order to ensure neutrality in tax policies, strive for a synchronous tax system with a sustainable structure, ensure proper resources are mobilized to feed the state budget, and at the same time; contribute to creating a favorable and fair investment and business environment, encouraging investment, promoting competition, regulating income reasonably and in line with the process of integration and development of the economy.

Build a modern, streamlined, efficient and effective tax system of Vietnam; unified, transparent, intensive and professional management of taxes, fees and charges by utilizing the method of risk management, boosting information technology application, simplifying administrative procedures, reducing compliance costs of the public and businesses as taxpayers; at the same time, centering tax administration on the electronic tax platform and three basic pillars, including a complete, synchronous, modern and integrated regulatory framework for tax administration; professional, upright and innovative personnel; modern and compatible information technology meeting tax administration requirements in the digital economy context.

II. SPECIFIC OBJECTIVES AND ASSIGNMENTS

1. Regarding tax policy reform

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a) Value-added tax;

b) Special consumption tax;

c) Import and export duty;

d) Corporate income tax;

dd) Personal income tax;

e) Severance tax;

g) Agricultural land tax;

h) Non-agricultural land tax;

i) Environmental protection tax;

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Regarding the volume of budget revenues from taxes and fees, ensure the rate of taxes and fees remitted into the state budget is at a stable, reasonable level and in line with the socio-economic development strategy for each five-year period of 2021 - 2025 and 2026 – 2030. Particularly, in the first five-year period, focus on supporting businesses and people to overcome difficulties and restore their production and business activities adversely affected by the Covid-19 epidemic, specifically as follows:

- By 2025, the average ratio of state budget revenues is expected to make up at least 16% of GDP, including taxes and fees accounting for about 13 - 14% of GDP; the proportion of domestic revenue to total state budget revenue strives to reach about 85-86%. In the first period, focus on supporting businesses and the population in mitigating difficult situation and restoring their production and business activities adversely affected by the Covid-19 epidemic.

- By 2030, the average ratio of state budget revenues is expected to make up about 16 - 17% of GDP, including taxes and fees accounting for about 14 - 15% of GDP; the proportion of domestic revenue to total state budget revenue strives to reach about 86-87%.

2. Regarding tax administration reform

Absolutely modernize tax administration to ensure conformity with international practices and Vietnamese law, mainly regulatory framework for tax administration, human resource and information technology, specifically as follows: The regulatory framework for tax administration which is expected to become uniform, public, transparent and fair, allow application of the method of risk management to tax administration, enable taxpayers to comply voluntarily, and tax authorities to have the capacity to manage tax effectively and efficiently; the tax personnel who become more professional, specialized and upright; the information technology system that is compatible, concentrated, meets the requirements of processing and providing information for tax administration, direction and administration of tax authorities, and providing electronic and digital services to taxpayers.

Below are several targets:

a) By 2025

- The minimum level of taxpayers’ satisfaction with tax authorities’ services is expected to be 90%.

- 100% of the Law on Tax Administration, written documents providing instructions for implementation thereof and other relevant legal normative documents are expected to be revised or promulgated as planned.

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- The minimum ratio of applications for tax registration answered online at the level 3 and 4 to total of received applications is expected to reach 80%.

- The minimum rate of online tax declaration, payment, refund, exemption and reduction of taxpayers who are enterprises and other entities; who are individuals is expected to reach 98% and 85%, respectively.

- The minimum rate of tax refund, exemption and reduction applications handled and answered by the deadline is expected to equal 98%.

- The ratio of total tax arrears until December 31 each year to tax amounts and other revenues that the state budget succeeds in collecting each year is expected not to exceed 8% (especially, taxes and fees in arrears is expected to account for less than 5% of total state budget revenue). The minimum ratio of successfully recovered debts to recoverable debts due on December 31 that are brought forward from the previous year is expected to reach 80%.

- Build an compatible and centralized information technology system that meets 100% of the demands for data collected, processed, stored and utilized in tax administration and governance of tax authorities, and 100% of taxpayers’ electronic services; 100% of tax declaration and electronic tax payment which are processed within 24 hours; 100% of total amounts of electronic tax payment which are accounted for in real time; 100% of taxpayers who are granted electronic accounts to check their tax obligations and tax payments on a smart mobile devices. The information technology system must meet the remote processing needs of 98% of tax personnel in charge of processing applications who are required to deal with their work out of tax authorities’ offices.

b) By 2030

- The minimum level of taxpayers’ satisfaction with tax authorities’ services is expected to rise to 95%.

- 100% of the Law on Tax Administration, written documents providing instructions for implementation thereof and other relevant legal normative documents are expected to be revised or promulgated as planned.

- The minimum rate of electronic support for taxpayers is expected to increase to 90%.

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- The minimum rate of online tax declaration, payment, refund, exemption and reduction of taxpayers who are enterprises and other entities; who are individuals is expected to rise to 98% and 90%, respectively.

- The minimum rate of tax refund, exemption and reduction applications handled and answered by the deadline is expected to equal 98%.

- The ratio of total tax arrears until December 31 each year to tax amounts and other revenues that the state budget succeeds in collecting each year is expected not to exceed 7% (especially, taxes and fees in arrears is expected to account for less than 5% of total state budget revenue). The minimum ratio of successfully recovered debts to recoverable debts due on December 31 that are brought forward from the previous year is expected to reach 90%.

- Build an compatible and centralized information technology system that meets 100% of the demands for data collected, processed, stored and utilized in tax administration and governance of tax authorities, and 100% of taxpayers’ electronic services; 100% of tax declaration and electronic tax payment which are processed within 24 hours; 100% of total amounts of electronic tax payment which are accounted for in real time; 100% of taxpayers who are granted electronic accounts to check their tax obligations and tax payments on a smart mobile devices. The information technology system must meet the remote processing needs of 98% of tax personnel in charge of processing applications who are required to deal with their work out of tax authorities’ offices.

III. MEASURES

1. Regarding tax policy reform

a) For value-added tax: Broaden tax base by reducing categories of goods and services not subject to value added tax and categories of goods and services subject to the 5% VAT rate; strive for the only one tax rate to be applied basically; study the roadmap for increase in value added tax rate; review the thresholds of sales subject to VAT calculated according to the tax credit method and adjust them to reality; study the single method of taxation according to the percentage of sales and apply it to taxpayers whose sales are below the threshold or are not eligible to apply the tax credit method; perfect regulations related to value-added tax on exported goods and services, and ensuring that they reflect matters of substance and conform to international practices. Study any necessary amendments and supplements to regulations on VAT deduction and refund with a view to ensuring simplicity, transparency and consistency with other regulatory provisions;

b) For special consumption tax: Review and study any amendments and supplements to taxable items or objects to regulate consumption according to the shift in social consumption trends and the guidelines of the Party and the State on protection of public health and environment; develop a roadmap for increase in taxes on tobacco, beer and alcohol products to limit production and consumption thereof and fulfill international commitments; review any adjustment in rates of the special consumption tax on a number of items to suit socio-economic condition in the 2021 - 2030 period; study the application of a combination of proportional tax rate and absolute tax rate to a number of goods and services subject to the special consumption tax;

c) For import and export duty: Continue to reduce the number of tax rates to create a more simplified import tariff, strive to reduce the number of import tax rates from 32 at present to about 25 by 2025, and to 20 by 2030. Study any amendments and supplements to export and import tax policies to promote exports, encourage the increase of domestic value, and limit the export of raw resources and minerals; adopt appropriate preferential policies to promote the development of key industries, supporting industries and other preferred sectors, ensuring compliance with the country's socio-economic development orientations over periods of time and international commitments. Study any amendments to regulations on-the-spot exports or imports and regulations related to non-tariff zones, ensuring consistency with regulations of relevant law and prevention of trade fraud and tax evasion;

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dd) For personal income tax: Additionally review taxable items; study any amendments and supplements aimed at adjusting the amounts and tax rates suitable to taxable income according to the nature of each type of income, imposing simple conditions in personal income tax finalization on both taxpayers and tax authorities, preventing acts of tax evasion and avoidance; study any amendments and supplements to regulations on tax exemption and reduction in accordance with our country's socio-economic context over periods of time and international practices;

e) For severance tax: Study any changes in regulations, taxable prices, and taxable natural resource outputs; amend the framework, rates and exemption and reduction of severance tax towards ensuring transparency and clarity, ensuring that the resource tax policy continues to be an effective tool to contribute to managing and protecting natural resources; encouraging the economical and efficient use of natural resources, deep processing and increase in the value of resources;

g) For property-related taxes (including agricultural and non-agricultural land use taxes): Continue to grant exemption from agricultural land use tax until the end of 2025 to contribute to the implementation of the Party and State's guidelines on agricultural and rural development. Complete general review reports on implementation of non-agricultural land use tax policies. On such basis, study and complete these tax policies with a view to levying more taxes on land and home in order to encourage the effective use of real property, contributing to limiting the speculation in real estate, and ensuring a reasonable and stable source of revenues remitted into the state budget and conformity with Vietnam's socio-economic condition and international practices. Concurrently, develop tax policies to ensure that they are simple, easy to understand, easy to be used for identifying items subject to property tax, tax amounts payable, and in line with provisions of land law and regulations of relevant law;

h) For environmental protection tax: Study and expand items or objects of environmental protection tax on goods causing environmental pollution; study adjustment to the environmental protection tax framework and rates to ensure that the environmental protection tax policy is an important economic tool that contributes to limiting the import, production and use of goods polluting the environment;

i) For fees, charges and other collections remitted into the state budget: Review and complete the legal system of fees and charges oriented towards effectively exploiting fees and charges from property, natural resources, and environmental protection; actualize the roadmap to increase the levels of collected fees and charges in order to gradually cover the full cost at each level; accelerate the transition from fees to public service prices, encouraging private-sector involvement in provision of public services; push for administrative procedure reform and provision of online public services to further improve the business environment, free up resources of the entire society and contribute to improving national competitiveness; at the same time, ensure compliance with the guidelines for re-organization or restructuring of the apparatus of state regulatory authorities and non-business units.

Conduct researches on inventing revenues or taxes collected from new business activities and types to keep up with the actual condition of development, ensuring that Vietnam's rights to collect and impose taxes are put in the socio-economic contexts from time to time and conform to international practices. Review and finalize policies on other state budget revenues, ensuring they are aligned with real circumstances and in sync with specialized legislation.

2. Regarding tax administration reform

a) Conduct researches on amending, supplementing and perfecting the regulatory framework for tax administration in order to improve capacity for administration of tax collection subject to e-government requirements and, at the same time, promoting voluntary compliance on the basis of ratings of compliance with law and levels of risk of taxpayers. Complete regulatory frameworks for tax administration in several key areas such as: anti-transfer pricing; new production and business activities in the economy, the digital economy, the sharing economy, smart production, cross-border transactions; tax agent services; exchange of information between tax authorities and other relevant agencies. Streamline administrative procedures by reviewing, reducing, and simplify components of dossiers on tax registration, declaration, payment, refund, exemption and reduction, and perform electronic tax transactions in accordance with international practices; promote the proactive roles of tax authorities in handling tax debt collection, apply concise procedures to automatically write off/collect small debts, continue to study and develop regulations on debt relief/debt forgiveness with respect to tax debts that taxpayers are no longer able to pay the state budget. Study a new function of tax authorities, i.e. the function of carrying out several investigation activities; study the models to develop apparatuses of all-level tax authorities towards streamlined ones to ensure effectiveness and efficiency. Re-design tax administration procedures in order to ensure that effective application of up-to-date information technology coincides with the effective dates of relevant legal normative documents;

b) Fully and promptly provide and disseminate tax-related regulatory provisions and tax administration information to taxpayers and other organizations or individuals in order to raise public awareness and consensus on the State’s tax administration; apply information technology to help taxpayers reduce the costs of implementation of tax administrative procedures and, at the same time, improve the level of voluntary compliance of taxpayers; encourage and support tax service businesses to prosper;

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d) Improve the capacity of inspection and examination to approach good international practices by promoting the application of information technology to strengthen tax inspection and examination in accordance with the guidelines for building of the electronic Government; apply more risk management practices in tax inspection and examination activities as an effective measure to detect, prevent and promptly handle acts of tax-related violations and minimize post-inspection or examination complaints.

dd) Focus on and improve the efficiency and effectiveness of the settlement of tax complaints, denunciations, and legal proceedings in accordance with the provisions of law and in line with the practical situation arising in the tax sector; perfect procedures and processes for settlement of tax complaints, denunciations and legal proceedings towards ensuring simplicity, openness, transparency and more facilitation to be provided for taxpayers. Renovate and improve the capacity of legal activities, strengthen the monitoring of law enforcement and inspection and handling of tax documents; improve the capacity of tax officials in charge of performing tax judicial assessment, participating in administrative and criminal proceedings in tax-related cases and legal matters. Implement the national strategic plan to prevent and combat corruption in the tax sector; strengthen internal control as an effective measure to ensure strict compliance with tax law and discipline, prevent tax officials from making taxpayers annoyed and harassed;

e) Recover tax liabilities in a proper, sufficient and timely manner, reduce tax arrears and avoid loss of state budget revenue. Improve the quality of debt management and enforcement of payment of tax debts with a view to simplifying debt management procedures and enforcing debt collection to improve tax administration performance, reduce processing time, and tax arrears; apply risk management approaches to debt management and enforcement of payment of tax debts; apply information technology to assist in debt management and enforcement of payment of tax debts;

g) Improve international tariff administration capacity through developing a strategy to negotiate about the double taxation agreement to deal with the new situation, partners and procedures for applying the Tax Agreements, exchanging information and bilateral agreement procedures. Introduce new regulations and measures for international tariff administration in terms of inspection of transfer prices and combat against tax evasion and avoidance. Apply risk management approaches to the practice of international tariff administration. Execute the program for cooperation in international tariff administration with tax authorities of foreign countries and international organizations within the region and in the world;

h) Build the system of tax authorities with sufficient authority and competence to proactively enforce tax legislation according to the model of function-based tax administration combined with object-based tax administration that is aligned with the application of electronic tax and risk management methods with a view to becoming automatic; ensuring that the apparatuses of tax authorities continue to be reorganized and rearranged by provinces, districts and regions subject to the requirements of centralized tax administration in order to improve the operational efficiency of tax authorities; study establishment of departments in charge of conducting a number of tax investigation activities at tax authorities, consolidate such departments as tax inspection, examination, internal inspection, international tariff administration, accounting declaration management, tax statistics, administration of large enterprises, tax administration of small and medium enterprises, business households and individuals by adopting the model of function-based tax administration combined with object-based tax administration and, at the same time, supplement human resources to meet the requirements of modern tax administration according to international practices. Conduct researches into consolidating activities of Taxation Colleges in order to improve the capacity for training tax personnel. Build a team of tax officials according to a reasonable structure meeting professional standards relating to titles and employment positions and competency framework as prescribed, make them become more and more professional, specialized and upright to adapt to present tax administration requirements and the trend of international integration; preferably, train and develop the team of senior experts who have high professional experience and are leading experts in the tax administration sector;

i) Develop the integrated and centralized information technology system that meets requirements for processing, provision of information for tax administration and direction of tax authorities, and provision of electronic services to taxpayers. Build an accurate, complete and timely tax database, effectively supporting risk management, striving for an automatic mechanism to systematically cross-check information from third parties to detect potentially dangerous contents leading to defects in tax returns; build an information technology infrastructure foundation to apply techniques to support inspection work; complete the connection of the tax database with the national database on the population and the State regulatory authorities, stakeholders, applying new technological achievements to automatically handle professional processes for tax administration and big data analysis for policy making, revenue forecasting and propaganda intended for supporting taxpayers, tax risk management, compliance management, tax inspection, examination and investigation, etc. Develop technical utilities for application of information technology and equipment that are innovative, modern, synchronous, ensuring continual and effective operation, information safety and data security;

k) Implement the financial management mechanism and the personnel management mechanism in which personnel are assigned the task of state budget collection and hold the posts that help in performing the task of tax reform and modernization with the aim of paying adequate wages and salaries to tax officials. Modernize tax offices, create synchronous, professional and effective working environment, ensuring advantageous and long-term working condition for tax officials, meeting modern tax administration requirements and fully meeting demands of tax service users.

IV. BUDGET

Funds for implementation of this Strategy and schemes for implementation thereof shall come from the tax modernization budget.

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1. The Ministry of Finance shall assume the following responsibilities:

a) Lead and take charge of implementation of the Strategy;

b) Instruct and encourage ministries, central and local authorities to design and implement programs and jobs related to implementation of the Strategy according to their respective jurisdiction and functions;

c) Take charge of and cooperate with relevant ministries and local authorities in implementation of the Strategy; on an annual or 5-year basis, carry out the preliminary and final assessment and review of lessons from implementation of the Strategy;

d) Take charge of and cooperate with relevant tax authorities in proposing and requesting the Prime Minister to approve adjustments to objectives and requirements of the Strategy where necessary.

2. The Ministry of Planning and Investment shall take charge of and cooperate with the Ministry of Finance in allocating and providing annual public investment funds in accordance with the Law on State Budget and the Law on Public Investment for implementation of the Strategy.

3. People’s Committees of cities and centrally-affiliated cities in collaboration with the Ministry of Finance and relevant authorities shall, according to their respective powers and duties prescribed in law, have responsibilities for directing and getting involved in implementing tasks on their part in this Strategy.

Article 2. This Decision shall enter into force from the signature date.

Article 3. Ministers, Heads of Ministry-level agencies, Heads of Governmental bodies, and Presidents of People’s Committees of centrally-affiliated cities and provinces, shall be responsible for implementing this Decision.

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PP. PRIME MINISTER
DEPUTY PRIME MINISTER




Le Minh Khai