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Vietnamese businesses are reluctant to online tax payments

Monday 29 June 2015 | 10:12 AM CET

The HCM City Taxation Agency launched an online tax payments collection platform in Q4, 2014 and expected to have 90% of the domestic business pay their taxes online, but only 7% (9545 companies) managed to use the digital medium for tax payments up to 26 May, 2015.

Meanwhile, the taxation agency trained 80,000 local businesses before online tax payments, vietnamnet.vn reports. Tran Ngoc Tam, deputy head of the HCM City Taxation Agency, admitted that the number of businesses registered to follow online tax payment procedures was far below expectations.

He said that more commercial banks had joined the network for online tax payments, but they remained inactive, though they can expect high profits from e-taxes. Foreign banks also hesitate to expand the services because of the fears for securities problems. Despite the Ministry of Finance’s intervention, no foreign bank branch in HCM City has joined the online tax payment network.

Therefore, though online tax payment is believed to bring big benefits to all the involved parties, only taxation bodies have been trying to persuade businesses to pay tax online, while banks have been indifferent to the business.

While taxation bodies blamed the modest number of businesses registering to pay tax online on the lack of banks’ cooperation, analysts argue that the businesses’ behavior towards online tax payment depends on taxation bodies’ policies.

A senior official of the General Department of Taxation (GDT) said GDT is drafting a circular guiding the e-transactions in tax payment to create favorable conditions for 65,000 businesses which now pay tax through T-VAN (online tax service providers), and to create a legal framework to allow T-VAN institutions to provide online tax payment services, the source cites.

An accountant at a garment company in District 6, HCM City, noted that businesses declaring tax through T-VAN will still have to use the GDT’s tax payment network, if they want to pay tax online. As such, businesses will have to access to two different systems, which is a time consuming.

He suggested applying necessary measures to encourage T-VAN units to provide e-tax services to businesses, which will not only create favorable conditions for businesses to declare and pay tax, but also help ease the pressure on taxation bodies in providing services to businesses.

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