When the management agencies continuously improve the provisions of the Law on Tax Administration, the fact that businesses still have violations of the tax law will have to face many consequences…
Statistics of the General Department of Taxation show that, after 10 years (2010 – 2020), the number of inspections at taxpayers’ offices has doubled; budget revenue increased more than 3 times, the quantity and quality of tax audits and audits has been improved markedly every year.
Notably, in 2020, when the economy and the State budget began to be affected by the COVID-19 epidemic, in order to create conditions for businesses to focus on restoring production and business, the tax authority has a policy tax inspection is limited at enterprises, but tax revenue from inspection still increased by nearly 1,000 billion VND compared to 2019.
Violating tax laws Penalties and Other Consequences in Vietnam
In fact, many businesses in Vietnam have had to face being publicly sanctioned for tax violations. This can be seen as a warning measure from the tax authorities to warn business owners and managers about the consequences businesses face when they do not comply with tax laws.
In order to handle tax violations in a more transparent and drastic way, recently, tax authorities in many provinces and cities have also issued a series of warnings about the consequences of deliberately deceiving to evade taxes, in which, the situation of two prices in real estate transactions has been brought into focus, in addition to warnings, in fact, many cases have been transferred by the tax authorities to the investigating agency for further clarification and Criminal prosecution.
According to experts, businesses themselves are victims of tax violations, in the context that businesses always try to comply with tax laws and have to optimize costs (including tax expenses), a number of enterprises, through inspection and examination, were found to have tax evasion and tax fraud, leading to a large amount of tax arrears and fines.
In addition to the tax arrears, the enterprise must also pay the corresponding fines and late payment interest. Therefore, the amount of tax that enterprises are remitted into the State budget through inspection and examination may be much larger than the amount of tax payable in accordance with regulations when enterprises comply with tax laws.
This is not a small amount of money, especially in the context that businesses are having to solve the difficult problem of financial resources for production and business activities due to the impact of the COVID-19 pandemic. In addition, the value and reputation of enterprises are also reduced, especially for enterprises that have been listed on the stock market, or are preparing for an initial public offering (IPO).
According to experts, failure to comply with tax regulations will create direct consequences for State budget revenue. When there is a budget deficit due to non-compliance with tax obligations by enterprises, it will affect financial resources for the implementation of the Government’s socio-economic goals.
In fact, in 2021, the Ministry of Finance and the General Department of Taxation will continue to perfect the provisions of the Law on Tax Administration, review, study, amend and supplement tax legal documents and tax administration in the direction of cover all revenue sources, improve management capacity, prevent fraud, tax evasion and prevent loss of state budget revenue. In addition to efforts towards sustainable development in the long-term, the Tax Agency has for many years strengthened tax inspections and audits, and at the same time became more drastic in taking action to ensure the state budget revenue in the context of the COVID-19 pandemic may be prolonged.
Circular No. 31/2021/TT-BTC on the application of risk management in tax administration, effective from July 2, 2021, the tax authorities have publicized the criteria for assessing the level of tax compliance, the criteria for classifying tax. Classify the risk level of the enterprise for assessment and classification of enterprises according to violations to apply corresponding control and handling measures. Therefore, businesses can self-review and assess their compliance with tax laws and risk levels based on these criteria to adjust their behavior and overcome errors to improve compliance.
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