Compliance risk and controls needed in a digital economy
The tax administrations will enhance tax compliance risk management to prevent evasions in a digital economy, Đặng Ngọc Minh, Deputy Director of the General Department of Taxation told a conference yesterday.
The department’s statistics showed that there are nearly one million enterprises, three million business households and 27 million individuals subject to individual income tax in Việt Nam.
The rapid development of science and technology, especially the explosion of the Internet and digital platforms, has created a digital economy full of potential and opportunities for socio-economic development, Minh said.
However, he added, there are also risks for tax management.
To that end, the tax administrations have focused on tax compliance risk management with the development of criteria, a supervision system for e-invoice issuance as well as the application of artificial intelligence (AI) to detect unusual risks.
According to Ngô Thị Thuỳ Linh, Depute Head of the Risk
Management Department under the General Department of Taxation, tax compliance risk management is a modern tax management method that is being applied by many countries around the world when the number of taxpayers is increasing rapidly, and the business operation is becoming more complicated for tax management.
Risk-based management will have the tax watchdogs use their resources more effectively and focus on groups of taxpayers with higher risks for tax evasion, Linh said.
The data has been centralised at the General Department of Taxation, which will serve as the base for risk analysis, she said.
For taxpayers who are individuals and business households, the tax administration is developing a set of criteria indicators for compliance risk management which is expected to be issued within this year, she said.
It is necessary to improve the legal framework on tax compliance risk management with an aim to encourage taxpayers to comply
with the established regulations.
Nguyễn Thị Cúc, President of Việt Nam Tax Consultants Association, said risk analysis will help tax administration to classify taxpayers in accordance with their levels of tax compliance for appro
priate management solutions.
Emulations and rewards should be carried out for highly compliant taxpayers together with other tax incentives such as tax references and fewer inspections to encourage compliance.
The application of information and technology should also be enhanced to facilitate tax payment.
“The better is the tax management, the higher the compliance, the more transparent is the business environment,” Cúc stressed.