Directive No. 19/2002/CT-TTg on Strengthening Value Added Tax Management

 DIRECTIVE

On Strengthening Value Added Tax Management

After more than three years of implementation, the Law on Value Added Tax has shown positive effects, overcoming the overlapping tax collection issues through various business stages under the previous Revenue Tax Law; at the same time, it encourages investment in production development and export promotion.

However, during the implementation process, some organizations and individuals have taken advantage of certain loose provisions in the Law on Value Added Tax and the Enterprise Law to create false export goods records and establish businesses for invoice trading in order to commit fraud and embezzle state taxes. The tax authorities and other state agencies have implemented many measures to prevent these actions but have not thoroughly and effectively resolved them.

To enhance the positive impact of value added tax, strengthen effective value added tax management, reduce losses, promptly prevent and address fraudulent activities in tax deduction and refund, and illegal invoice trading, the Prime Minister requests the Ministers, Heads of relevant sectors, and Chairmen of provincial and municipal People's Committees to urgently implement the following tasks:

1. Ministry of Finance:

a) Study and report to the Government to submit to the National Assembly for amendments and supplements to the Law on Value Added Tax. In the short term, propose to the Standing Committee of the National Assembly to abolish the provision on deducting input VAT at a percentage rate for goods purchased without a VAT invoice to be implemented from the beginning of 2003.

b) Guide and organize the effective implementation of Decree No. 76/2002/ND-CP dated September 13, 2002 of the Government amending and supplementing several articles of Decree No. 79/2000/ND-CP dated December 29, 2000 of the Government detailing the implementation of the Law on Value Added Tax.

c) Issue documents to amend, supplement, and perfect regulations and procedures for VAT refunds to effectively manage VAT refunds according to the law.

Strengthen management and inspection of invoice printing, issuance, and sales to business establishments, ensuring that only those with legitimate production and business operations can purchase invoices; intensify inspections of invoice usage, verification, and timely, strict handling of illegal invoice trading cases.

d) Vigorously carry out tax inspection and VAT refund work, especially for exported goods crossing land borders.

đ) Direct the General Customs Department to strengthen management measures and closely monitor the inspection and confirmation of actual exported goods, particularly exports through land borders, to stop the circulation of fake exported goods and false exports.

e) Enhance training and education for tax officials and customs officers on professional skills and moral qualities to effectively manage taxes. Intensify internal inspections and strictly handle cases of irresponsibility or corruption, collusion, and facilitation for taxpayers to defraud state taxes.

2. Ministry of Planning and Investment: Direct the Provincial Planning and Investment Departments to closely coordinate with tax authorities and related agencies to strictly manage the activities of enterprises after issuing Business Registration Certificates to prevent and promptly detect situations where enterprises are established for invoice trading and embezzlement of state assets.

Direct the Department of Planning and Investment of each locality to closely coordinate with tax authorities and relevant agencies to implement strict management measures for the activities of enterprises after issuing the Business Registration Certificate in order to prevent and promptly detect situations where enterprises are established for the purpose of trading invoices and embezzling state assets.

3. Ministry of Justice:

a) Coordinate with ministries and sectors in reviewing and issuing legal normative documents to ensure consistent and strict implementation.

b) Study and amend and supplement administrative violation penalties and criminal penalties in related legal normative documents to match the nature and severity of violations and crimes involving invoices, certificates, and tax fraud in the current situation.

4. Ministry of Public Security:

a) Direct local public security agencies to closely coordinate with tax authorities, customs agencies, and related agencies to promptly detect and prevent tax fraud and illegal invoice trading.

b) Focus on directing the urgent investigation and completion of case files of tax fraud and embezzlement of tax refunds to prosecute in a timely manner, ensuring the strictness of the law.

5. State Bank of Vietnam:

a) Direct banks to expand payment through bank accounts, creating favorable conditions for enterprises to open accounts and make payments through banks for exported goods.

b) Direct banks to strictly enforce tax authority orders and fines.

6. Chairmen of Provincial and Municipal People's Committees:

Direct the Tax Bureau, Provincial Planning and Investment Department, Provincial Finance and Price Department, and related agencies to effectively implement measures to strengthen management of production and business activities, issuance of Business Registration Certificates, market management, tax registration and payment, and VAT refund management.

7. Request the Supreme People's Procuracy and Supreme People's Court to direct lower-level procuracies and courts to promptly and strictly prosecute and adjudicate tax fraud cases discovered and transferred by tax authorities and public security agencies.

8. Central and local information and propaganda agencies should intensify publicity about value added tax, including special sections on tax matters so that all organizations, individuals, and taxpayers understand value added tax, thereby contributing positively to the effective implementation of tax laws. Promptly commend exemplary compliance with tax obligations and denounce fraudulent tax practices and offenders.

Ministers, Heads of ministerial-level agencies, Heads of government-affiliated agencies, and Chairmen of provincial and municipal People's Committees must urgently direct and take specific measures to effectively implement the contents of this Directive, promptly report and recommend solutions to the Prime Minister and the Ministry of Finance for issues requiring resolution.