Circular No. 577/TC/TCT regarding guidance on classifying goods

DIRECTIVE

REGARDING STRENGTHENING THE WORK OF MANAGING STATE REVENUE ON THE TERRITORY OF THE PROVINCE.

According to the report of the Provincial Tax Department, the result of state budget revenue collection in the whole year 2002 was 371,712 million VND, reaching 103.25% compared to the provincial People's Council's assigned budget, increasing by 30.88% compared to the central government's assigned budget. Out of 15 types of revenue, 9 reached and exceeded the revenue target, while 6 did not reach the revenue target. In general, the result of state budget revenue collection in 2002 on the province's territory was quite good, but it is noteworthy that some types of revenue decreased such as revenue from foreign-invested enterprises; revenue from selling houses; revenue from transferring land use rights, etc., which need to be corrected and better solutions should be found.

To achieve the assigned state budget revenue collection task for the Province in 2003 of 450,000 million VND and strive to increase revenue by an additional 150,000 million VND to meet the economic and social development tasks of the locality; at the same time, strictly implement Directive No. 19/2002/CT-TTg dated September 13, 2002 of the Prime Minister "on strengthening tax management work for value-added tax" and other guiding documents of central ministries and sectors; the Provincial People's Committee instructs the People's Committees of districts and cities, heads of departments, agencies, and sectors to organize the implementation of state budget revenue management work in 2003 on the province's territory as follows:

1- All levels and sectors must make efforts to implement well the five key tasks of the Province to create comprehensive strength to accelerate the economic growth rate on the provincial territory, thereby improving people's living standards and creating a stable source of income from within the economy.

The tax sector must closely cooperate with all levels and sectors to fulfill the state budget revenue collection task accurately, sufficiently, and timely, exploit well various sources of revenue to increase tax revenue in line with the economic growth rate, minimize state budget revenue loss as much as possible, ensure equality in tax obligations for organizations and individuals engaged in production and business activities, and concentrate all forces to achieve and exceed the state budget revenue collection target for the Province in 2003.

2- Strengthening the management of tax collection in the non-state-owned economy sector:

The non-state-owned economy sector in our province is developing rapidly and very dynamically; it has solved many employment issues, produced many goods, achieved considerable economic efficiency, created a large amount of state budget revenue, but the situation of tax evasion still exists due to insufficient and untimely state management and tax management. It is necessary to focus on the following areas:

2.1- Regarding the Business Registration Fee in 2003:

- Review and include all organizations and individuals engaged in production and business activities into the tax management system according to the prescribed Business Registration Fee level under Decree No. 75/2002/NĐ-CP dated August 30, 2002 of the Government "Amending the Business Registration Fee Level".

- Cases encountering difficulties in implementing the Business Registration Fee level in 2003 must be explained and guided to help production and business establishments understand and decide on the type of enterprise to establish and comply with tax obligations according to the regulations of the State.

2.2- Management of Value Added Tax and Corporate Income Tax:

2.2.1- For Enterprises:

- When establishing and operating, enterprises must be inspected and issued a business registration certificate by the Department of Planning and Investment; register for tax and declare taxes accurately, sufficiently, and promptly; operate in accordance with the business fields registered in the business registration certificate and report business results regularly to the competent authority for management and inspection to promptly prevent violations of the Law.

- Enterprises must strictly implement the double-entry bookkeeping system according to the current regulations of the State; record accounting fully, promptly, and accurately reflecting actual business revenue and costs.

+ Regarding revenue management: Competent authorities must strengthen quality control and measurement, use measuring equipment to strictly manage quantity and quality of goods; post prices and sell goods and services according to posted prices; carefully check sales invoices of enterprises.

+ Regarding cost management: Enterprises must register full economic and technical norms for each product; register purchase prices for raw materials directly sold without invoices; register wage funds with the tax authority and economic sector management agency. Departments of Economy, Finance and Price, and the Tax Bureau will coordinate to inspect enterprise norms to build standard norms as a basis for tax calculation to increase state budget revenue and promote fair competition among enterprises in the market mechanism.

- When buying and selling goods and services, enterprises must follow the invoice issuance and documentation regulations of the State. All expenses in production and business activities must have valid invoices; for invalid documents that do not match actual business operations and aim to evade taxes, they will be excluded from business expenses.

+ Enterprises must use Value Added Tax invoices issued by the Ministry of Finance when selling goods and services; encourage registration, issuance, and use of self-printed invoices according to State regulations.

+ Enterprises must use agricultural, forestry, and aquatic products purchase invoices as prescribed by the State when purchasing agricultural, forestry, and marine products from direct producers who have not been allowed to use invoices issued by the Ministry of Finance; they may not use agricultural, forestry, and aquatic products purchase invoices when purchasing from organizations and individuals engaged in production and business activities using legal invoices. For goods such as land, stone, sand, gravel, scrap, and other goods and services purchased from individuals and small traders without legal invoices, enterprises must require sellers to purchase single invoices from the tax authority to issue input vouchers.

The tax authority must publicly disclose organizations and individuals engaged in business that use invoices; notify invoices no longer in use on the Internet for businesses to monitor their usage during business operations. Strengthen the inspection of invoice usage, reconcile and verify invoices already used by businesses; Cases of violating the invoice usage system to evade taxes must be promptly and strictly handled according to the provisions of the Law.

2.2.2 - For individual households directly paying VAT based on declared revenue:

- Small households directly paying taxes based on declared revenue must implement the "household accounting system"; issue complete sales invoices for goods and services to declare and pay taxes accurately reflecting actual business activities.

- Small households and individuals trading unprocessed agricultural, forestry, marine products, and raw materials such as earth, stone, sand, gravel, scrap purchased from direct producers and miners for sale to production, processing, and export enterprises, which are subject to fixed revenue-based taxation but have registered to use sales invoices, may open a "sales journal" to determine declared revenue for full tax calculation; there is no requirement to issue purchase receipts.

2.2.3 - For households paying a stable turnover tax:

- The tax authority bases classification and determination on the scale, industry, and location of business operations: households with stable tax for six months or a year; conduct investigation and survey procedures to determine taxable revenue consistent with reality. The tax authority works with the District, Commune Tax Advisory Councils to establish a fixed tax rate for each household during the stable tax period. Announce taxes once to allow households to operate with peace of mind and encourage early tax payment to the State Budget.

- Continue implementing Directive No. 48/2002/CT-UBBT dated October 30, 2002, of the People's Committee of Binh Thuan Province regarding strengthening management of VAT to enhance strict, equal tax management in the non-state economic sector and create a transparent environment for all business establishments to invest and develop production and business activities in accordance with state guidelines.

3 - Focus on managing land revenue collection:

3.1 - Land tax:

- Concentrate on implementing Directive No. 52/2002/CT-UBBT dated December 2, 2002, of the People's Committee of Binh Thuan Province regarding measures to strengthen land tax revenue collection management in Binh Thuan Province starting from 2002.

- Relevant Departments: Land Administration, Construction must closely cooperate with local People's Committees at all levels to develop specific plans to accelerate the issuance of certificates of ownership and land use rights in accordance with state regulations as the basis for managing land tax revenue.

- The tax department must develop a proposal to organize the implementation of land area declaration forms for all organizations and individuals currently using land subject to land tax, to establish a comprehensive and accurate tax management system reflecting actual usage.

- The specific location and street of each type of taxable residential and specialized land must be uniformly implemented according to the regulations of the provincial, district, and city People's Committees and in accordance with current national laws.

3.2 - Other land revenues:

3.2.1 - To fully exploit land revenues, assign relevant functional departments to coordinate with district and city People's Committees to plan land use funds; review and adjust land prices appropriately for each type of land, region, location, and profitability; encourage investment capital from various economic sectors into land development according to planning and the province's socio-economic development strategy.

3.2.2 - Allocate land with land use fees to organizations and individuals with investment projects for long-term stable production and business operations.

- Vigorously implement Directive No. 41/2002/CT-UBBT dated August 26, 2002, of the People's Committee of Binh Thuan Province regarding pilot measures for granting land use rights and issuing certificates of ownership for houses and land use rights.

- Assign the Department of Finance and Prices to coordinate with the Provincial Tax Bureau and other relevant departments to calculate and establish land use rights transfer prices in tourist areas and other business establishments, to be submitted to the People's Committee for consideration and decision, to organize pilot implementation for investors willing to obtain land use rights from the state with land use fees for long-term stable production and business operations.

3.2.3 - Land rental fees:

- All land areas approved for lease by competent authorities, the Land Administration must establish land lease contracts, and the Tax Department must include them in the land rental fee collection process according to state regulations. The land rental fee price is set according to the current land price stipulated by the provincial People's Committee.

- Encourage investors to pay the entire land rental fee for the entire lease period as stipulated by the state to enjoy current benefits.

3.2.4 - Transfer of land use rights and change of land use purpose taxes:

- Local People's Committees at all levels must strictly manage the transfer of land use rights and changes in land use purposes. Only those legally granted land use rights may transfer these rights and change land use purposes.

+ Organizations and individuals using land without legal authorization must complete the necessary procedures to obtain legal land use rights certificates before transferring rights and changing land use purposes.

+ Organizations and individuals using land illegally, the commune or village People's Committees must inspect and prepare files to report to the competent authority for immediate handling according to the law to determine the legality of land use.

- All types of land approved for transfer of land use rights and changes in land use purposes must declare and pay taxes for the transfer of land use rights, changes in land use purposes, and stamp duty as stipulated by the law before the competent authority issues land use rights certificates to the transferees.

- All cases of illegal land transactions, encroachments, and unauthorized changes in land use purposes shall be investigated and processed strictly according to the law by the commune or village People's Committees. The Chairman of the commune or village People's Committee is responsible to higher authorities for land management in their jurisdiction.

4 - Agricultural land use tax (SDĐNN):

Pursuant to Circular No. 577 TC/TCT dated January 16, 2003 of the Ministry of Finance regarding the exemption from land tax, the People's Committee of the province directs the Tax Department and relevant departments, and all levels of the People's Committees to implement as follows:

- From 2003, no land tax shall be collected on the land area within the agricultural holding of farming households; however, for other agricultural producers (enterprises, forest farms, production cooperatives, etc., and non-farming households), the collection and exemption of land tax shall temporarily continue according to Decision No. 199/2001/QĐ-TTg dated December 28, 2001 of the Prime Minister and Circular No. 09/2002/TT-BTC dated January 23, 2002 of the Ministry of Finance.

- Based on the above provisions, the Tax Department shall establish a plan for collecting land tax in 2003 and concentrate on collecting overdue land tax from previous years; at the same time, it shall implement tax exemptions and reductions in accordance with the laws.

5- Collection of overdue taxes:

- All levels of the People's Committees shall develop plans to direct the tax authorities and functional departments to cooperate in collecting overdue taxes from all organizations, individuals, and household businesses that owe taxes; strictly handle cases of non-compliance with tax obligations. Firmly enforce tax collection to ensure equality in tax obligations, improve compliance with the law, and increase state revenue.

- Continue implementing Directive No. 42/2002/CT-UBBT dated September 3, 2002 of the People's Committee of Bình Thuận Province regarding the continued strengthening of tax collection efforts for overdue taxes, applicable to the collection of taxes from previous years transferred to 2003. The Tax Department shall closely coordinate with the municipal and communal tax advisory councils to classify debtors and process them according to their authority, in accordance with the Law on Tax and the Ordinance on Administrative Penalties. Combine coercive measures for tax payment with considerations for tax exemptions, reductions, deferrals, and write-offs to promptly collect taxes into the state budget.

6- Implementation organization:

- The Tax Department and economic management departments and specialized management departments must develop specific plans for managing and coordinating steps to effectively implement the task of collecting state revenue in 2003.

- The Department of Finance and Price Control and the Provincial Tax Bureau must collaborate with related departments to develop specific proposals to submit to the People's Committee of the province regarding the allocation of targets to achieve 150 billion VND in the 2003 state budget, clearly assigning responsibilities to each department, district, and city People's Committees; simultaneously developing appropriate mechanisms and policies to maximize sources of income into the state budget for development investment.

- District and city People's Committees must develop detailed plans to guide departments in managing the collection of taxes generated in 2003; handling overdue taxes; property taxes, and other land-related revenues within their jurisdiction.

- The Radio and Television Station and Báo Bình Thuận must organize extensive publicity about the policy of collecting state revenue in 2003, encouraging organizations and individuals engaged in production and business to fulfill their tax obligations properly; taking measures to prevent tax evasion, counterfeiting, commercial fraud, ensuring consumer rights, and promoting fair competition among economic sectors.

This directive takes effect from the date of issuance. Any issues encountered during implementation should be reported by relevant departments and localities to the Provincial Tax Bureau for consolidation and submission to the People's Committee of the province for consideration and resolution.