Deputy general director of the Department of Taxation Cao Anh Tuan told Kinh te Dau tu (Economics and Investment) newspaper the Government is going to tighten control of bill printing by companies.
* Quite a few enterprises were found to be taking advantage of a loophole in Government Decree 51 allowing enterprises to print their own bills. Can you elaborate on the tax evasion committed by these enterprises?
The first thing I should say here is that a number of organisations and individuals have used illegal bills, containing activities they have not undertaken, to claim their tax rebates from the State budget.
Since January 1, 2011, when Decree 51/2010/ND-CP came into force, instead of buying bills from the taxation office as was done in the past, enterprises and organisation could print their bills themselves or order bills from printing companies.
As a result, this dramatically reduced cases of fraudulent behaviour. However, recently many have been detected using fraudulent bills, leading to a very serious dilemma.
To protect the State from further losses, the Ministry of Finance has asked the Government to revise Decree 51 and other guiding documents to address the situation.
While waiting for the revisions, the ministry has instructed customs and taxation offices to conduct regular inspections to prevent tax fraud.
* While waiting for amendments to Decree 51, what activities does the ministry need to take to prevent and stop the use of illegal bills?
The ministry has instructed local taxation offices to classify high-risk enterprises for tax fraudulence and tighten the management of bills issued by enterprises located in areas that don't have the products mentioned in the bills or any suspicious business activities.
Regarding businesses who received special treatment in relation to the VAT, such as those dealing with rubber, coffee, cashew nuts, MoF has requested taxation offices in those localities to ramp up inspections at these companies until the end of this year.
The ministry has stated clearly that at least 60 percent of enterprises on the inspection list are high risk enterprises.
* What have been the results of inspections so far?
In 2012, taxation offices nationwide inspected 55,850 enterprises, an extra 11 percent compared with the previous year.
The sum of money they re-collected and fined was around 11.6 trillion VND (552 million USD) - an increase of 17 percent compared with 2011.
All in all they added some 6.5 trillion VND (309 million USD) to the State budget.
In the first eight months of 2013, some 36,650 enterprises were inspected and around 6.5 trillion VND was re-possessed from fraudulent companies.
An important thing I just want to mention here, for newly set up enterprises (less than 12 months old), they can have their bills printed with permission from the taxation offices in their localities. But, they have to file a monthly report on their use of the bills.
* Can you talk a bit about what amendments will be included in Decree 51?
What ever changes are to be made to Decree 51, the Ministry of Finance wants to enable all organisations and individuals to engage in business activities and ensure a level playing field. It has also resolved to step up the fight against tax fraudulence.
Based on these principles, the ministry has proposed that suspicious enterprises committing tax fraud or high tax risk enterprises will be prohibited from printing their own bills. Instead they will have to buy bills from taxation offices.
However, for the first bill order, enterprises will have to register and seek approval from the tax authorities. These requirements will be clearly stated in the revised Decree 51.
In the guiding documents, the Ministry of Finance will also state clearly that for enterprises with over 15 billion VND (0.7 million USD) in registered capital and “clean” activities will be allowed to print their own bills.
Other enterprises will have to buy their bills from taxation offices in the first year of operation. From the 2nd year onwards, they will be assessed by the taxation offices. If their business are clean they will be allowed to print their own bills.-VNA
* Quite a few enterprises were found to be taking advantage of a loophole in Government Decree 51 allowing enterprises to print their own bills. Can you elaborate on the tax evasion committed by these enterprises?
The first thing I should say here is that a number of organisations and individuals have used illegal bills, containing activities they have not undertaken, to claim their tax rebates from the State budget.
Since January 1, 2011, when Decree 51/2010/ND-CP came into force, instead of buying bills from the taxation office as was done in the past, enterprises and organisation could print their bills themselves or order bills from printing companies.
As a result, this dramatically reduced cases of fraudulent behaviour. However, recently many have been detected using fraudulent bills, leading to a very serious dilemma.
To protect the State from further losses, the Ministry of Finance has asked the Government to revise Decree 51 and other guiding documents to address the situation.
While waiting for the revisions, the ministry has instructed customs and taxation offices to conduct regular inspections to prevent tax fraud.
* While waiting for amendments to Decree 51, what activities does the ministry need to take to prevent and stop the use of illegal bills?
The ministry has instructed local taxation offices to classify high-risk enterprises for tax fraudulence and tighten the management of bills issued by enterprises located in areas that don't have the products mentioned in the bills or any suspicious business activities.
Regarding businesses who received special treatment in relation to the VAT, such as those dealing with rubber, coffee, cashew nuts, MoF has requested taxation offices in those localities to ramp up inspections at these companies until the end of this year.
The ministry has stated clearly that at least 60 percent of enterprises on the inspection list are high risk enterprises.
* What have been the results of inspections so far?
In 2012, taxation offices nationwide inspected 55,850 enterprises, an extra 11 percent compared with the previous year.
The sum of money they re-collected and fined was around 11.6 trillion VND (552 million USD) - an increase of 17 percent compared with 2011.
All in all they added some 6.5 trillion VND (309 million USD) to the State budget.
In the first eight months of 2013, some 36,650 enterprises were inspected and around 6.5 trillion VND was re-possessed from fraudulent companies.
An important thing I just want to mention here, for newly set up enterprises (less than 12 months old), they can have their bills printed with permission from the taxation offices in their localities. But, they have to file a monthly report on their use of the bills.
* Can you talk a bit about what amendments will be included in Decree 51?
What ever changes are to be made to Decree 51, the Ministry of Finance wants to enable all organisations and individuals to engage in business activities and ensure a level playing field. It has also resolved to step up the fight against tax fraudulence.
Based on these principles, the ministry has proposed that suspicious enterprises committing tax fraud or high tax risk enterprises will be prohibited from printing their own bills. Instead they will have to buy bills from taxation offices.
However, for the first bill order, enterprises will have to register and seek approval from the tax authorities. These requirements will be clearly stated in the revised Decree 51.
In the guiding documents, the Ministry of Finance will also state clearly that for enterprises with over 15 billion VND (0.7 million USD) in registered capital and “clean” activities will be allowed to print their own bills.
Other enterprises will have to buy their bills from taxation offices in the first year of operation. From the 2nd year onwards, they will be assessed by the taxation offices. If their business are clean they will be allowed to print their own bills.-VNA
