By the end of this year, account holders at five commercial banks in 18 cities and provinces across Vietnam will be able to pay their taxes online.

Tax offices will forward online tax declarations that they receive to banks, which will transfer money from taxpayers' accounts to the State budget, said Pham Quang Toan, head of the department's Information Technology division.

A pilot run of the online tax payment facility for taxpayers in Hanoi, Bac Ninh and Vinh Phuc with accounts at the Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) has already been carried out, he said.

So far, 250 enterprises have paid their taxes online.

The number of enterprises using e-tax declarations has increased sharply in Vietnam, from 362 enterprises in 2009 to 350,000 enterprises last year.

The general department under the Ministry of Finance has signed an agreement with four commercial banks to facilitate online tax payments. Under the agreement, the department and the banks –Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank), Vietnam Joint Stock Commercial Bank for Industry and Trade (VietinBank), Vietnam Bank for Agriculture and Rural Development (Agribank) and Military Commercial Joint Stock Bank (MBBank) – will set up a system to transmit online tax payments, using digital signatures for security verification.

The service will first be available to 5,000 taxpayers in areas including Quang Ninh, Hai Phong and Nam Dinh in the north, Nghe An, Quang Binh and Da Nang in the centre and Binh Duong, Dong Nai and Ho Chi Minh City in the south.

Aimed at both enterprises and individuals, it will later be expanded to all 63 cities and provinces in the country, according to Bui Van Nam, General Director of the taxation department.

Vice General Director of Vietinbank Nguyen Van Du said the bank and the taxation department were working together on preparations, holding training courses for bank staff and tax officers and ensuring that the banks' accounting systems were compatible with the payment system of the taxation department.-VNA