Lê Minh Nam, member of the National Assembly's Finance and Budget Committee and Vice President of the State Audit Science Council. — VNA/VNS Photo

After more than 15 years, the Law on Value Added Tax (LVAT) is once again being revised and open to public input. However, businesses are concerned that the revised law would put them in a tight spot. Lê Minh Nam, a member of the National Assembly's Finance and Budget Committee and Vice President of the State Audit Science Council, talked with Vietnam News Agency about the revisions.

What is your opinion on revising the Law on Value Added Tax and its 0-per-cent tax rates?

Revisions to the LVAT are intended to align the law with the broader Party's stance on tax policy, support the implementation of the National Tax Strategy for 2021-2030 and address the challenges in administering the current tax system.

Revisions to certain tax regulations have been stipulated in several sub-law documents. Now it's time to bring them forward for legislation, paying the way for a revised LVAT in the future.

In principle, the 0-per-cent tax rates are applied to goods and services related to export activities. The items being reviewed for the 0-per-cent tax rates are goods and services supplied to non-tariff and export processing zones that previously produced goods and services exclusively for export but now also for domestic markets.

If goods and services have been sold to the domestic markets, applying the 0-per-cent tax rate is no longer appropriate. It is necessary to review and find another approach.

Reviewing doesn't mean narrowing the scope of export services but involves identifying which services are actually exported. This is a complex process because export services, in nature, are not the same as ordinary goods.

Recently, the review process based on the government's proposal has shown that some services still need to actually export services after being reviewed by inspection agencies. There are also difficulties in identifying certain services due to differing views between tax authorities and taxpayers.

To address these issues, the revised law is expected to define the scope of export services subject to the 0-per-cent tax rates in more detail.

In a recent draft version that the Government introduced to the National Assembly, several export services have been clearly defined, including vehicle rental services that operate transportation outside Việt Nam, and maritime and air services provided to foreign users. These services will fall under the scope of the 0-per-cent tax rate category.

In short, it is not that we are narrowing the scope of export goods and services but we are reviewing and identifying the right items for 0-per-cent tax application.

Revisions are expected to add more taxable items to the law to ensure fairness and transparency. What do you think about this approach?

The goal of any law, not just LVAT, is to ensure convenience in implementation and promote transparency. Some regulations being considered for revision in LVAT contribute exactly to that goal, including the provisions regarding Value Added Tax timing and prohibited behaviours.

When procedures and items are clearly defined in the Law and sub-law documents, it will help consolidate the legal framework for taxation and reduce the administrative burden for tax authorities and taxpayers.

The latest draft version of the revised LVAT stipulates that tax can be applied for some items but then refunded. However, businesses have complained that the refund process is lengthy and troublesome. What do you think about that?

While the Law on Tax Administration clearly outlines tax refund deadlines, recent instances of tax fraud have driven tax authorities to tighten scrutiny to ensure compliance with legal regulations.

This means that while tax authorities strive to expedite tax refunds for businesses that have paid their taxes, they must also maintain stringent oversight to prevent fraudulent activities.

The Law has defined refund before inspection and refund after inspection, but sometimes problems arise adding time to the process. — VNS