HÀ NỘI — A grant of US$4.2 million from the Japanese Government to help support Việt Nam’s tax policy reforms was signed yesterday between the World Bank and the State Bank of Việt Nam.

The Revenue Administration Reform Support Project aims to improve the effectiveness of tax administration through the implementation of a comprehensive risk management system and a redesign of business processes and information technology. It will also support the modernisation of the tax policy framework by assessing the impacts of tax policy changes.

“The World Bank’s commitment to this project is a signal of our broader commitment to work with Việt Nam in strengthening fiscal performance and implementing growth-friendly fiscal reforms”, said Ousmane Dione, the World Bank Country Director for Việt Nam.

“By focusing on the tax system, the project will help enhance domestic resources mobilisation, which is an important pillar of fiscal consolidation,” he added.

The changing composition of Việt Nam’s tax revenues toward increased reliance on domestic sources requires enhanced efforts to strengthen tax policy formulation and modernise tax administration, especially in areas like tax compliance, operational efficiency and transparency.

A major component of this project is the development of a roadmap to modernise the Information Technology System for tax administration and lay a foundation for IT infrastructure, so the General Department of Taxation can use modern IT solutions for business processes.

Another component focuses on building the capacity of policy makers to analyse and formulate tax policies. The project will analyse the impacts of proposed changes to core tax instruments, in line with Việt Nam’s Tax Reform Strategy and international best practices.

It also supports the preparation of the legislative framework to introduce a property tax.

The grant is provided by the Japanese Government through the Policy and Human Resource Development Program, which is administered by the World Bank. — VNS