Completion of state management of personal income tax in vietnam

1

2

The urgency of the thesis
Implementing tax reform in Vietnam, personal income tax law become
effective since January 1st 2009, replacing Income tax Ordinance for highincome earners is a step forward in policy formation; however, through the
process of implementation, the personal income tax law has revealed some
inadequacies. Although the amending and supplementing some law articles of
the personal income tax law (effective since July 1st 2013) surmounted many
defects; however, in the process that the entire humanity resolves global
problems together, the Government of Vietnam still has to put great efforts into
reforming and modernizing in order to fulfill the tax system in the process of
global integration.
Before the practical demand of a synchronous tax management policy and
mechanism which catches up with the economic and social development, the
research of the process of state management of personal income tax has become
an urgent need. This is the reason why the author has chosen “Completion of
state management of personal income tax in Vietnam” as the doctoral thesis in
Political economics.
2. The purpose and research content of the thesis
2.1. Purpose of the research thesis
- Systematizing and supplementing theoretical issues and practical
experience in state management of personal income tax in other countries and
in Vietnam currently;
- Evaluating the reality of state management of personal income tax in
Vietnam;
- Proposing opinions, orientations and basic solutions to complete state
management of personal income tax in Vietnam.
2.2. The content of the thesis
- Clarifying the theoretical content of the state role in the formation of

personal income tax role policy and in the fulfilling of the state role of personal
income tax in Vietnam. The research focuses on the impacts on taxpayers’
voluntary compliance.
- Analyzing the state’s practical role in the formation and completion of the
personal income tax collection’s management policy and mechanism in Vietnam
recently; pointing out the achievements, limitations and causes of the problem.
- Offering an orientation and some solutions to strengthen the state role in
the personal income tax management in Vienam, paying attention to the changing
of tax management thinking purely “administrative orders” to “serve the public
administration”, respecting and honoring the true value of the economic – political –
social contributions of taxpayers.
3.
The objects and scope of the research

- The research objects: State management of personal income tax being
done through legislation, policy, administrative system, administrative methods,
sense of law observance of taxpayers…
- The research scope
Theoretically: The theoretical issues related to personal income tax and
state management of personal income tax in Vietnam and other countries.
Practically:
o Practical experience in other countries.
o The reality of state management of personal income tax in Vietnam
About time: Secondary data collected from 2009 to date; primary date
collected in 2012; the Survey of the personal income tax management policy
and mechanism system in Vietnam during the implementation of the Income
tax Ordinance for high-income earners, focusing on analyzing the execution
time of the personal income tax law (2009) of tax authorities and taxpayers.
4.
The research methododology

This thesis uses synchronously traditional analytical methods, research
tools such as dialectical materialism and historical materialism methods,
analytic and synthetic method, statistic and comparative method; consulting
documents and reports of related management agencies; consulting published
reports, researches, magazines and using investigation documents, surveys,
collecting statistic and analytic data… of published thesis, projects, researches;
Interview managers, experts, scientists to learn about some impacts of the
factors to taxpayers’ voluntary compliance. Collected survey forms, after being
revised and disposed of unsuitable ones, are result-treated with the specialized
computer software SPSS.
5.
Contributions of the thesis
Discoveries of the research: The research has displayed advances and
restrictions of the policy, as well as the existence of personal income tax
management mechanism in Vietnam.
Differences of the research: The research has updated achievements
and has showed limitations of state management of personal income tax in
Vietnam; meanwhile, proposing the routine of reforming the tax policy with the
gradual reduction of tax rate in the next 2 periods of tax policy reform in 2017
and 2022, using mathematical cacultaion that evaluates how the reform impacts
taxpayers’ budget duty.
Strong points and new contributions of the research: The research
has systematized experience of other countries, has displayed the existence of
management policy and mechanism in Vietnam, including research of
international organizations which are assisting Vietnam in the tax system
reforms such as WB, IMF, OECD, EU, JICA.
6.
Structure of the thesis
Besides the preamble, conclusion, preference and appendix, the main
content of the thesis has been structured in 4 chapters:

Chapter 1: Overview of the research situation related to the thesis

PREAMBLE

1.


3

Chapter 2: Theoretical and practical foundation of state management of
personal income tax
Chapter 3: Reality of state management of personal income tax in
Vietnam
Chapter 4: Solutions to upgrade state management of personal income tax
in Vietnam

4
CHAPTER 1
OVERVIEW OF THE THEORY RELATED TO THE THESIS

1.1. Overview of the situation of tax and personal income tax research
1.1.1. Research relating income tax in some countries
During the research process, the author has consulted other studies like:
“An Inquiry into the Nature and Causes of the Wealth of Nations” (Adam Smith
- 1776); “Economics” (Paul A.Samuelson and William D.Naudhaus – 1997);
“Initiation of tax law fundamentals and tax theory” (translated by Vietnamese
Research Center – 1963); etc.
So, we see that the issues of personal income tax have attracted the
concern and research of many modern international scientists.
1.1.2. The elaborate works about personal income tax in Vietnam

Laid the foundation for the economic theory in general and tax theory in
particular, shown in the works: “Tax curriculum” (General Department of
Taxation – 1991); “Tax and tax system curriculum in Vietnam” (Prof. Dr. Bui
Xuan Luu, Dr. Nguyen Huu Khai, master Nguyen Xuan Nu, Vietnam
Education Publishing House – 2003); “Tax management system” (Dr.Nguyen
Thi Bat, Dr.Vu Duy Hao – 2002); “State management in economics
curriculum” (Dr.Mai Van Buu, Dr.Doan Thi Thu Ha – 1999); “State
management in economics” (Dr.Mai Van Buu, Dr.Phan Kim Chien – 2001).
Several works, topics, studies about the formation and completion of
policy system and management mechanism of personal income tax collecting
such as: “Model of income tax application in Vietnam” (topic, 1994), “Property
tax model in Vietnam” (topic, 1995); “Investigation on income, savings and
investments of residents” (topic, 1998); “Completion of personal income tax in
the new situation” (topic, 2000); “Personal income tax in the world and
application of orientation in Vietnam” (2002); “Solutions for tax management’s
completion in Vietnam in current situation” (monographic book, 2003);
“Personal income tax reform in Vietnam” (2005); “Personal income tax law
formation project” (2007); “Tax management innovation in conditions of
economic integration in Vietnam” (Le Duy Thanh, PhD thesis, 2007);
“Completion of personal income tax policy in Vietnam in accordance with the
process of international economic integration” (Nguyen Xuan Son – 2007);
“Personal income tax management in Vietnam in conditions of international
economic integration” (Ly Phuong Duyen – 2009); “Tax management in
Vietnam in conditions of international economic integration” (Nguyen Thi
Thuy Duong – 2011), etc.
Moreover, there’re a lot of studies belonged to international personal
income tax partners with Vietnam. Those studies refer to the key issues such as:
1) The current situation of tax policy, tax management and the accordant

5

6

solutions with the process of Vietnamese’s economic integration; 2) State
management of administrative reform and tax reform; 3) Research on the
implementation and recommendations of amendment personal income tax law.
Conspicuously, the personal income tax issue has been the concern of
many scholars, scientists, academics and media. However, there has not been
any study on both two aspects of state management: management policy and
mechanism to analyze deeply, to point out the existence, and then to propose
solutions of completing the state management to personal income tax. From the
evaluation, the author has discovered a gap that must be filled

CHAPTER 2
THEORETICAL FOUNDATION AND PRACTICAL EXPERIENCE OF
STATE MANAGEMENT OF PERSONAL INCOME TAX

1.2. The results and issues that must be continued to research
Through the works above, it is clear that the scholars have concluded
many academic issues on taxation, focusing on research of state management,
on administrative reform added tax reform, on the implementation and
recommendations of amended personal income tax law. During the process of
reform and complete Vietnamese tax system, the works of international partners
like WB, IMF, EU, OECD, JICA play an extremely important role.
The work in Vietnam and other countries have analyzed the aspects of
state management in an adequate and profound way, either about policy or
about collecting management mechanism immediately since personal income
tax has been regulated by Income tax Ordinance for high-income earners,
corporate income tax and land use right transfer tax.

Implementing personal income tax law, the renovation process, the
administrative reform or the law enforcement, amendment, researchers, along
with the media have published numerous articles and contributed to the process
of completing state management of personal income tax in Vietnam. In spite of
many advances, personal income tax collecting management policy and
mechanism still have some limitations. Vietnamese personal income tax law
still exist too many types, the collecting system’s functions are not effective
yet; the evaluation of international partners of tax system’s corruption is very
weak… Those factors have posed to policy makers, managers an urgency of a
new reform for the tax service in order to complete the state management of
personal income tax in Vietnam.
Despite many work related to the state management of personal income
tax, until now there has not been any work that had the systematic character of
state management of personal income tax from theory to practice, then to
propose ideas, orientation and solutions. Therefore, the chosen topic does not
coincide with the published study results.

2.1. Basic understanding of personal income tax and the state
management of personal income tax
2.1.1. Basic understanding of personal income tax
2.1.1.1. Some concepts of personal income tax:
a) Income tax concept: Income tax is a type of tax that affects directly on the
real income of taxpayers such as person or legal entity. The main characteristic
of this type is the unity between the taxpayer and the taxbearer, the taxpayer
himself is also the one that really bears this tax.
b) Personal income tax concept: “Personal income tax is the type of tax that
hits on the net income of individuals in a given tax period (usually a year)
regardless of the income’s generation source.”1
2.1.1.2. Characteristics of personal income tax
Personal income tax is a type of tax in the tax system, in addition to

general characteristics, personal income tax has its own traits: it’s the type of
tax that only affects on people with income high enough to be taxed; it has a
progressive nature (the higher one’s income is, the more tax he has to pay); it
doesn’t distort the price of goods and services.
2.1.1.3. The role of personal income tax
- Personal income tax is an important source of the state revenue.
- Personal income tax manages and regulates macroeconomics through
enhancing or reducing income regulation of different social classes, affects the
aggregate demand, so that diminishes or stimulates the economy.
- Reasonable personal income tax policy encourages workers to increase
their income through the appropriate commendation and reward policy,
encourages the rich men’s contributions to build the country; and acts as a tool
for the state to control and collect the population’s income.
2.1.1.4. Basic content of personal income tax:
a) Taxpayers: According to the personal income tax law, taxpayers are defined
as people or legal entities that areresponsible for paying personal income tax to
the State.
b) Taxbearers: In the tax law, they are the objects given to be taxed.
c) Taxable base, tax base or taxable grounds: The grounds used for
determining the amount of tax payable of one tax type that a taxpayer must
hand over are called tax base or taxable grounds of that tax type. Usually the tax
base of a tax type consists of these factors: Taxable object and taxable price.

1

Tax law curriculum, Tax business College, Political Administration Publishing House, 2010, p.330


7

8

d) Tax rate: Tax rate is the main part of a tax type, since it expresses the need
to focus on financial resources for the state budget and the socio-economic
adjustment policy. It’s also the top concern of taxpayers. Depending on each tax
type’s regulations, different types of tax rate are applied accordingly.
e) Tax exemption, tax reduction: Tax exemption, tax reduction is an exceptive
factor specified in the tax law. The regulation that allows taxpayers not to fulfil
the duty of paying the entire amount of tax, not to pay taxes to the state, is
called “tax exemption”; or to pay just a part of it, is called “tax reduction”.
f) Tax declaration, tax payment, tax collection mode: The tax declaration
mode presents the rights and obligations of taxpayers in the observance of
accounting records, receipts and in the supply of documents, accounting records
and bills related to the calculation and collection of tax. The tax payment mode
includes the rights and obligations of taxpayers with the state competent
agency. The tax collection mode is the activity of the state competent agency.
Additionally, the tax law also defines responsibilities and jurisdiction of state
administrative agencies at all levels, state agencies involved in the process of
tax collection; or responsibilities and jurisdiction of mandatory organizations
and individuals that collect the tax.
g) Violation and remuneration handling mode: In order to guarantee that the
tax law is fulfilled thoroughly, focusing properly, fully and promptly tax
revenues to the state budget, the tax law applies punitive sanctions of the state
for person or legal entity that violates the law, remuneratory sanctions for those
who fulfill the tax collection duty.
2.1.2. State management of personal income tax
2.1.2.1. The concept of state management of personal income tax
a) State management of tax:
- Tax management is the work of state administrative agencies in the tax field
done through the formation of tax policy and the management of tax collection;

through applying tax management strategy of each period; organizing the
enforcement of tax law, operating, affecting and monitoring to ensure that
taxpayers fulfill their duty of paying tax for the state budget in accordance with
the law regulations.
The state management of tax is the impact process with purpose and
awareness of the state whose representative is the tax agency that organize,
manage activities, mobilize the tax revenues to the state budget, carry out the
targets proposed in each period; help people to execute law regulations of tax,
fees, charges and other payments (referred to as tax) to the state budget;
coordinate with organizations, individuals in the society to execute tax law
regulations.
b) State management of personal income tax:
State management of personal income tax is the impact process aiming at
raising awareness of the state on the mobilization of tax revenues to the state

budget by way of legal documents, methods and organizations, competent
agencies to achieve socio-economic goals. There are three levels of state
management of personal income tax: For tax officials; for a tax agency, and for
the state management system.
2.1.2.2. State management principles of personal income tax
Despite being carried out by public authorities, tax management can’t be
applied arbitrarily nor causes annoyance to taxpayers. It must follow state
management principles and frameworks to ensure the process of tax collection:
1) Law compliance principle; 2) Unity, democratic centralism in tax
management principle; 3) Justice principle; 4) Transparency principle; 5)
Convenient, economical and effective tax management principle.
2.2. The need to fulfilling, content and factors influencing on state
management of personal income tax
2.2.1. The need to fulfilling state management of personal income tax
In the past few years, the globalization tendency promoted the integration

and development process of all economies in the world. Accordingly, tax
system with the policy framework, the collection mechanism have been
reformed in a positive way with the general trend, improved gradually, in
accordance with international criteria, performed the role of a state tool and
regulated the state’s macroeconomics effectively. In this context, fulfilling state
management of personal income tax becomes an urgent need, for the following
principal reasons:
- Completing state management of personal income tax to promote the
positive role of tax to achieve the objective of social justice;
- Completing state management of personal income tax to elevate the
public awareness of citizens.
- Completing state management of personal income tax to add more
revenues to the state budget, to meet the demand for social spending.
2.2.2. The content of state management of personal income tax
2.2.2.1. Enacting the legal framework of personal income tax law and policy
In order to complete the personal income tax law and policy, to achieve
the success in encouraging people to comply with tax law, in addition to
researching, learning from the experience of countries that have succeeded in
reforming the tax system, we also need to continue researching to expand the
tax base and to clarify the taxable income; amend and supplement tax
calculation method for each income in a simple way, consistent with the general
practice, elevate taxpayers’ compliance, creat an environment favorable for the
tax collection; adjust the tax rate reasonable to encourage individuals to enrich
legitimately.


9

10

2.2.2.2. Completing the state management organization and staff of personal
income tax
Consisting of the following contents: Completing the tax management
organization; building the tax officials team; determining the appropriate tax
management organizational structure.
2.2.2.3. Tax collection management organization: propagandize, guide the
process, operational methods, technology support
The top priority task in the tax collection management organization is
creating and executing basic processes and regulations in tax management
including: tax registration, tax declaration, tax calculation, tax collection, debts
control, tax refund, tax inspection and audit and handle tax law violations of
taxpayers.
2.2.2.4. Personal income taxpayers inspection and audit
Taxpayers inspection is inspecting the observance of tax law of taxpayers
or inspecting the observance of the duty that the state requires in other words.
The content of taxpayers inspection focuses on these basic issues: 1) Inspecting
the observance of tax registration and tax declaration regulation; 2) Inspecting
the observance of data, business documents storage mode of taxpayers; 3)
Inspecting the observance of tax payment of taxpayers.

About personal income tax management: Examples are Malaysia,
Singapore, Thailand, Indonesia, China, South Korea, England, United States,
Japan, Australia…2: For non-resident subjects, most countries apply the
principle of income generation source to tax income generated in that country,
except for Hong Kong where every individual resident and non-resident only
has to pay income tax for the income generated in Hong Kong. In Netherlands,
the Tax inspection manual is issued and reprinted frequently; it has become an
effective tool for the tax agencies to perform their tasks. In Australia, tax
collection system operates under the mode of self-declaration and self-payment
from which taxpayers fulfill their duty in respect to the law. The tax agencies

manage system risks through the balance of resources to ensure their citizens
observe the law3.
Besides,some Eastern European countries have eliminated the progressive
tax rate, applied a homogeneous tax rate to income from salary, wages. In spite
of having simplified things, this method has been criticized due to the problem
of income redistribution.
2.3.2. The lesson about personal income tax management for Vietnam
Through the synthesis and research of applying personal income tax
reform in the world, Vietnam can learn these lessons to complete state
management of personal income tax: 1) Building taxation model; 2)
Determining taxable subjects; 3) Determining taxable personal income and
nontaxable income; 4) Determining family allowances; 5) Determining tax rate
and tariff; etc.
According to the personal income tax management’s experience in other
countries, the lessons that need to be applied to Vietnamese tax service include
the following things 1) Managing organization of tax collection; 2) Upgrading
the form and method of declaration; 3) Building data base and using
information technology; 4) Developing human resources of tax officials.
In summary, all the experience shows that personal income tax is an
important revenue of the state budget, a tax type that has a wide range of
adjustment, affects directly to the economic benefits of each individual in the
society. Therefore, the application, execution and management of personal
income tax is always a complicated topic and requires the attention of social
sectors. In the construction of personal income tax law in every nation, the
policy makers have to consider this issue carefully.

2.2.3. Factors impacting the state management of personal income tax
There are many factors that impact the state management of personal
income tax, including both positive and negative ones. These factors are steps
to complete the personal income tax management. Specifically: 1) The state

policy and the strictness of the law; 2) The effectiveness of the tax
administration system; 3) Qualifications and moral qualities of the tax officials
team; 4) Facilities of the tax sector; 5) The primary method of payment in the
population; 6) The income status, living standards and educational level of the
people.
2.3. Experience of state management of personal income tax in some
countries and the lesson for Vietnam
2.3.1. Overview of experience in state management of personal income tax of
some countries
Personal income tax is the common tax worldwide and bears a history of
hundreds of years. Until now, there are over 180 countries that apply personal
income tax. Most countries nowadays (Japan, Indonesia, Malaysia,
Thailand,…) identify the taxable incomes and classify them basing on their
source of creation: Income from labor; from business; income from property for
rent, transfer of property, inheritance, presents; income from indirect
investments such as interest, dividend, income acquired through capital
contribution; other income…

2

Report “Personal income tax reform experience of some countries in the world” (Ministry of Finance, 10/2012)
The 2003-04 compliance program, The Australian Taxation Office, 2003, describes risks and the way resources of
The Taxation Ofice being used to manage these risks.
3


11

12

CHAPTER 3
THE CURRENT SITUATION OF STATE MANAGEMENT OF PERSONAL
INCOME TAX IN VIETNAM
3.1. Overview of state management of personal income tax in Vietnam (in
terms of specific contents)
The reality of legal documents of tax management and personal income
3.1.1.
tax management in Vietnam

capital investment, capital transfer, property transfer, income from inheritance,
presents;
2) Taxable types of income are expanded corresponding to these terms:
income from capital investment; income from capital transfer, real estate
transfer including house ownership transfer and land use rights transfer; land
and surface water lease rights transfer; income from inheritance, presents; from
winning prizes of bet, casino;
3) Changing the taxable starting point by applying family allowances to
taxpayers (4 million/month – 48 million/year) and dependent (1,6
million/month), expanding application for individual with business income;
4) Charitable, humanity, study promotion contributions; contributions to
organizations, centers that care and foster children with especially difficult
circumstances, disabled, homeless elderly, social security, professional liability
insurance contributions for some industries that require compulsory insurance
are considered tobe non-taxable income;
Unity of tax duty between Vietnamese and foreigners.
The Law Amending and Supplementing a Number of Articles of
Personal Income tax law 2012
Those are the amended and supplemented articles:
- Changing the time of taxable period’s registration for individuals
with income from stock transfer to register the taxable period at any time during

the year. Removing the phrase “for all types of income” in the responsibility of
personal income tax declaration, payment, settlement of individuals to conform
to related regulations in case of changes arise later.
- Increasing family allowances for taxpayers from 4 million/month (48
million/year) to 9 million/month (108 million/year); increasing deduction with
each dependent from 1,6 million/month to 3,6 million/month to guarantee
justice, encourage, attract experts, good workers; creat advantages for
taxpayers, contribute to promoting administrative reform, tax management
modernization; share difficulties, support earners, stimulate consumer demand,
support business and production.
- Regulations on allowances, subsidies deducted when calculating
taxable income which distinguishes clearly and appropriately with related legal
documents like social security, labor law…to ensure the unity of the law
system.
- More general about revenues for income from real estate transfer of
individuals under all forms, including newly generated cases, authorization of
house, land transfer, exchange of house, land that generates income.

3.1.1.1. Personal income tax law
Personal income tax law no.04/2007/QH12 has become effective since
01/01/2009. The main points of Personal income tax law are:
- No discriminate Vietnamese citizens from expats living in Vietnam;
No discriminate regular income from irregular income;
- Tax more types of income: According to the law, there are many
taxable types of income like income from capital investment, including interest,
dividend, interest on capital, real estate transfer, copyright,…;
- Nontaxable income, tax exemption income, tax reduction income;
- Tax period: The tax period is the calendar year for income from
business and working. For income from interest, dividend and profit, interest on
capital, real estate transfer, lottery winning, copyright, franchising, technology

transfer, inheritance and presents, the tax period is identified as each generation
of income.
- Social security and health insurance: These distributions are reduced
from business income or salary, wages.
- Family allowances: For taxpayers, the amount of monthly deduction is
4 million VND and each dependent is 1,6 million VND.
- Charitable contributions: There is deduction applied for charitable
contributions, with accordance to the international custom.
- Tax rate: the law specifies 7 rates: 5, 10, 15, 20, 25, 30 and 35%.
- Tax threshold: The tax threshold of 10 million is applied for income
from copyright, franchising, prize winners, inheritance… These types of
income also have the special tax rates.
- Narrow tax base: This requires immediate acceptance for the benefit of
the formalization of the labor market and the economy.
- Non-resident individuals: the tax rates are applied variously to each
business sector, the 20% tax rate for income from salary, wages; the 1%, 2%,
5% tax rate for business income.
New points compared to the Ordinance
Compared to the Ordinance, the personal income tax law has many new
points, progressive, consistent points with the international custom:
1) About taxpayers: Individuals with income from business, from transfer
of land use rights, from salary, wages and other sources of income. Besides, the
law added other taxable subjects which are individuals with income from


13

14

- Supplement “pensions voluntarily paid by pension fund monthly” to

income that is reduced by personal income tax. Non-taxable types of income
consist of social security, health insurance, unemployment insurance,
professional liability insurance with some industries, sectors that require
compulsory insurance, voluntary pension fund, charitable and humanity
contributions.
3.1.1.2. Tax management law and law amending and supplementing of tax
management
Tax management law has become effective since 1/7/2007. Some notable
points are:
- Defining the rights of taxpayers in the process of tax calculation, tax
audit, tax inspection and tax complaints, the tax agencies is obliged to
compensate for the loss caused by the tax agencies;
- Emphasizing the supply and use of one single tax code, the first step to a
modern tax management system;
- Harmonized rules on tax payment and tax refund. The penalty for
paying late is 0,05% of the unpaid taxes for each day. The excess amount of tax
will be repaid in a certain time.

- It’s legal to get information from other agencies but the information
must be kept confidentially.
After a period of execution, the amending and supplementing of tax
management law has become effective since 1/7/2013. The amended contents
are split into 3 groups:
The first group, simplifying administrative procedures of tax: reducing
the frequency of declaration of value added tax for small and medium-size
taxpayers; shortening the time of resolution of some administrative procedures.
The group that serves the objectives of reform – modernization and
integration, in conformity with the international custom, containing 4 contents:
(1) supplementing the principle of risks management in the tax management;
(2) supplementing the mechanism of advance pricing agreement (APA) in the

anti-transfer pricing in the foreign-invested enterprises; (3) expanding the range
of information gathering about taxpayers from foreign sources under the signed
agreements and treaties in order to allow to extract data from foreign sources to
serve the tax management; and (4) supplementing obligations of taxpayers in
applying information technology to elevate corporate governance as well as to
develop the method of electronic tax administration.
The group that improves the efficiency of tax administration to conform
to the actuality and to related legal documents to prevent budget revenue loss,
reduce tax arears, containing 10 contents: the order of paying taxes and fines;
the extension of tax payment; supplementing the regulation of paying tax
gradually for taxpayers that are incapable of paying the full amount of tax at
once; erasing tax debts, tax penalties; the enforcement of tax administrative
decisions; the sanctions for violations of tax law; the time limit for handling
violations of tax law; the tax audit at taxpayers’ headquarters; amending
contents of tax administration to synchronize with other laws; becoming
effective: the law became effective on July 1st 2013.
3.1.1.3. Survey on the impact of the policy change to taxpayers and
comparison of tax rates between each policy change period
The state budget obligations of each taxpayer reduce in the period of
policy amendment
The topic “The innovation of personal income tax policy in the actual
conditions of Vietnam” has used the single model to determine the tax liability
of each individual according to different income levels from 100 million/year
(8,33 million/month) to 1,8 billion and 2,4 billion/year (150 million and 200
million/year respectively), based on the number of people who depend on the
taxpayer’s nurture. The topic compares 6 ways: The first one considers the
impact of the policy on single taxpayers; The second one considers the impact
on taxpayers with one dependent; The third, fourth, fifth, sixth way, with 2, 3,
4, 5 dependents respectively (for example wife/husband, 2 children, 2 parents).

15

16

About the contribution to the state budget from personal income tax: the
GDP grows annually, the income of workers also raise, so the personal income
tax increases in both absolute and relative numbers every year. The data of the
period 2009 – 2012 are described as follows:

Chart 3.2. The average tax rate for each income level according to the
Ordinance of 2004 and the Law of 2007
Amount of
The average
Amount of
The average
tax payable
tax
rate
tax payable
tax
rate
Total
under the
under
the
under the
Impact under
the
income

Personal
Personal
Ordinance
Ordinance of
income tax
income
tax
of 2004
2004
law of 2007
law of 2007
30
0
0
0
0%
0%
90
3
1,1
-1,9
3%
1%
180
12
8,3
-3,7
7%
5%
330

45
31,6
-13,4
14%
10%
540
114
76,2
-37,8
21%
14%
810
222
147,8
-74,2
27%
18%
1200
378
273,5
-104,5
32%
23%
1500
498
378,5
-119,5
33%
25%
2000

698
553,5
-144,5
35%
28%
3000
1.098
903,5
-194,5
37%
30%
(Source: Tax reform in Vietnam, World Bank, 2011)
Thus, for an individual with one dependent, the personal income tax law of
2007 generates less revenue from tax than the Ordinance of 2004 in both
absolute and relative terms.

Chart 3.1. Personal income tax period 2009 – 2012 (Unit: Billion)
PIT
State
budget
GDP
% of state budget
Total
% of GDP
revenue
revenue
2009 1.658.389 454.786
14.318
0.86
3.15

2010 1.980.914 559.170
26.288
1.33
4.70
2011 2.535.008 674.500
37.162
1.47
5.51
2012 2.949.000 41.500
49.190
1.67
6.63
(Source: The topic The innovation of personal income tax policy in the actual
conditions of Vietnam)
The figures above show that, in 2012 the total personal income tax
revenue tripled the amount in 2009. The encouragement of tax rates in 2009
was 0.86% of GDP increased to 1.67% in 2012. Meanwhile, the proportion of
personal income tax of the total state budget revenue raised gradually, from
3.15% in 2009 to 6.63% in 20124.
Comparison of the average tax rate and the progressivity of personal
income tax law in 2007 with the Ordinance of 2004
To evaluate the impact of the personal income tax law of 2007 on the
amount of tax that must be paid by an individual with one dependent, researcher
calculates the tax duty of that person in 2 ways: (1) through the Ordinance of
2004 and (2) through the law of 2007, with different income levels (30 million
to 3 billion VND). The results are as follows:

4

The tax revenue and GDP 2012 based on Publicizing the State Budget 2012, mof.gov.vn

17

18

In other research about the tax obligations of taxpayers with 2
dependents, with the income level between 30 million and 3 billion, the taxable
income is deducted 86,4 million per year (instead of 67,2 million) and other
types of income is taxed at the homogeneous floor rate of tax of 13,33% (the
average tax rate in accordance with the personal income tax law of 2007 for
income sources such as investments, copyright or real estate transfer).

Located in the organization of state management, the organization of
personal income tax administration is arranged from central (the Personal
Income tax Management Department) to local (the Personal Income tax
Management Department of the Department of Taxation, the Personal Income
tax Management team of the Tax Offices ) and is decentralized in terms of
function and mission clearly.

Chart 3.3. Evaluation of the progressivity of the personal income tax law
system of 2007 with the Ordinance of 2004

Chart 3.4. Amount of staff and civil servants in the organization of personal
income tax law administration (up to December 31st 2010)

Taxable
Tax payable
Other
income

Incom
Total
incom
Salar e from
inco
e
Law
Law
y
busine
Ordinan
Ordinan
me
sourc
200
200
ss
ce 2004
ce 2004
es
7
7
30
90
180
330

14
41
81

149

9
27
55
100

7
22
44
81

14
41
81
149

30
90
180
330

0,0
0,0
2,1
8,9

1,0
2,9
8,3

26,2

540

244

164

132

244

540

24,8

60,9

810

366

246

198

366

810

55,8

115,
8
210,
2
292,
3
440,
8
737,
9

Average tax
rate
La
Ordinan w
ce 2004 200
7
0%
3%
0%
3%
1%
5%
3%
8%
11
5%
%

14
7%
%
18
10%
%
19
11%
%
22
13%
%
25
15%
%

1.20
114,8
0
1.50
1500 677
456
367
677
169,0
0
2.00
2000 903
608
489

903
259,3
0
3.00
3000 1.355 912
733
1.355
440,0
0
(Source: Tax reform in Vietnam, World Bank, 2011)
3.1.2.
The current situation of the organization of personal income tax
management
3.1.2.1. Overview of the organization of tax administration in general
The organization of state management of tax collection is established
homogeneously from central to local administrative boundaries, perform the
task of execution of tax laws in the country following the democratic centralism
principle, assisting the Minister of Finance in the state administration of
domestic revenues in the country, including: tax, fees, charges and other
revenues of the State budget (referred to as tax).
3.1.2.2. The organization of personal income tax administration
1200

542

365

293

542

No.
1
2
3

Management level
General Department of Taxation (Personal Income tax
Management Department)
Provincial, city Department of Taxation (59 Personal
Income tax Management Offices)
Tax Office (170 Personal Income tax Management teams)
Total

Unit
People

Amount
22

People

409

People
People

575
1.006

(Source: The General Department of Taxation)
3.1.3.
The actual status of the organization of personal income tax
collection’s management
3.1.3.1. The propaganda and support of taxpayers
The propaganda and support task of taxpayers is carried out frequently,
continuously under various forms: pictorial, spoken, written press, direct
consultation, reply in writing, opening electronic information page. The tax
agencies pay careful attention to conversations with taxpayers; the initiative of
organizing many “week of listening to taxpayers”, the timely resolution of
arising problems are highly appreciated by the business community and the
public. Any new tax policy is informed and guided at the right time, etc.
In 2012, directly supported at the tax agencies to 185.157 taxpayers;
supported through telephone to 224.014 taxpayers; replied in writing of 21.036
documents to taxpayers; organized 6.275 training workshop for 397.254 people;
organized 3.602 dialogue conferences with 115.845 participants. The total
amount of articles of the sector in the mass media is 12.562; the number of
news related to tax on the radio and television is 215.731; hosted many press
conferences; the General Department of Taxation has issued 965.326
documents, publications of propaganda to taxpayers; Departments of Taxation
issued 686.972 documents, publications of propaganda to taxpayers.


19

20

3.1.3.2. The process and procedures of personal income tax declaration and
payment
ESTIMATION,

SYNTHESI

PROPAGANDA,
SUPPORT, OSS,
ADMINISTRATIVE
CLERICAL SECTION

- Propaganda tax base
- Guide tax procedures
- Provide reference to
taxpayer
Receive procedures of
tax records

TAX DECLARATION
AND TAX AUDIT
(INFORMATION
PROCESSING)

Tax
registrationStorage of
taxpayer’s
informationProcess
tax declaration forms,
tax documents
- Tax accounting
- Debt calculation
- Process tax refund

TAX INSPECTION,

TAX AUDIT AND PIT

- Tax

- Tax
-

TAXPAY
ERS

DEBT
MANAGEMENT AND
TAX COERCION

records of
taxpayers
declaration
examining
Risks analyzing
Choose tax records
to inspect and audit
Create inspection
and audit records
Manage records

3.1.3.3. Managing the personal income taxpayers:
The situation of collecting and paying the personal income tax conformity
to income groups: Based on the reports of the General Department of Taxation,
the situation of collecting and paying the personal income tax conformity to
income groups is as follows:

Chart 3.5. The situation of collecting and paying the personal income tax
conformity to income groups

TREASURY

- Debt analysis
- Debt notices
- Apply
debt
collection
measures
- Coercive
debt

Chart 3.6. Opperating model of current tax management
(Source: The General Department of Taxation)
In this chart, the Opperating model of current tax management through
the general process for taxpayers with the production and business activities is
described as follows: Taxpayers register tax declaration, submit tax declaration
form, tax records at the propaganda and support section (OSS) of the tax
agencies and pay taxes at the State Treasury. The propaganda and support
function are there to help taxpayers; the information processing function run by
the tax declaration and tax audit section is the action of importing information
of tax declaration, issuing tax code; this section executes the tax administration
through examining the tax declaration form, determining taxable base,
comparison of the tax declaration form, determining the taxable amount;
processing tax collection documents, determining the amount of tax paid and
the tax arrears, etc.
The processes in each tax management function is described according to
the workflow, determine the responsibilities of each section of the tax agencies,

pay special attention to the application of information technology.

Tax level Proportion of taxpayer

Proportion of amount of
tax collected
10,6
10,8
13,2
15,1
19,5
11,8
17,3

1
73,0
2
11,5
3
6,5
4
3,05
5
1,75
6
0,65
7
0,18
(Source: The General Department of Taxation)
Depending on the data above, the subjects of level 1 occupy 73%, but the

amount of tax paid is only 10,6%. In the meantime, although the subjects of
level 7 occupy only 0,18%, the amount of tax paid reaches 17,3%. Thus, raising
the level of family allowances has helped a large part of taxpayers to move to
the area of non-taxable subjects, the tax management costs will reduce
significantly.
3.1.3.4. Tax debt management
The tax arrears management’s duty is to ensure the timely collection of
the tax debt to the State Budget, to minimize the newly arised tax debt, to
prevent revenue loss. At the end of 2012, the ratio of debt to total state revenue
was about 8%, increased 27,5% compared to 2011, this is consistent with the
actual situation, as the economic state is struggling with many difficulties,
inventories rise, the production and business stagnate. However, the scale of tax
debt of 2012 was lower than that of 2008 (equivalent to 9,5%).
3.1.3.5. The application of information technology in the management of tax
collection


21

22

Specify the creation of a management mechanism towards taxpayers,
support thoroughly to enhance the voluntary compliance of taxpayers, elevate
the effectiveness of the tax administration, in the meantime improve drastically
the internal operating capacity of the system and the thought of serving of tax
officials, improve the ability of tax management, the tax service has opted for
an innovative solution based on the information technology, in parallel with the
creation of a national integrated database, to serve the data processing, build the
tax management model according to international standards. The application of
technology of the General Department of Taxation is highly valued in the

reduction of procedures and costs for corporates, is consistent with the
economic integration, contributes to creat fundamental changes in the tax
declaration procedure, brings great efficiency for both corporates and tax
authorities, reduce the disadvantage of time, effort, creat initiative for
corporates.
Apart from the advantages that the electronic tax declaration produces,
this method also has its inadequacies: hard to find out errors, corporates don’t
know where to correct, while the tax authorities can’t support them directly; the
technology infrastructure, softwares, human resources remain weak; most
corporates have a habit of declaring tax through the internet near the due date,
etc.

Despite many efforts reflected in the collection and analysis of data
related to taxpayers to evaluate the compliance level, classify risks and create
the list of taxpayers whose tax records need to be audited, the tax inspection and
audit still has many flaws pointed out by the World Bank. Right in the
directing, the absence of any material that synthesizes separately the results of
the personal income tax inspection is also a defect.
3.2. Overall assessment of the actual situation of state management of
personal income tax in Vietnam
3.2.1. Achievements of state management of personal income tax
3.2.1.1. Rapid growth of revenue, increases proportion of total budget revenues,
contributes to extend the revenue sources to the state budget
Although the real tax threshold has increased since 2009, the revenues
have continued to increase year after year, remains a constant growth rate, until
2012 the revenues increases 725,3 times compared to 1991 (from 62 billion to
46.333 billion), details as follows:

3.1.4. The actual situation of personal income tax inspection, tax audit
The inspection and audit function plays an important role in the tax

management. Tax inspectors detect and prevent the non-compliance, and also
explain complicated codes during the process of auditing, convince taxpayers to
observe the laws.
The inspection and audit of personal income tax settlement is carried out
along with the inspection and audit of corporates and agencies. In 2012, the tax
service inspected and audited 55.849 corporates (achieved 87% of the plan and
111,2% in comparison with the same period of 2011); collection of arrears and
penalties of 12.541 billion (167% compared to the same phase of 2011);
inspected 7.038 corporates (reached 90,1% of the plan and 115,4% compared to
the same period); collection of arrears and penalties of 6.000 billion (176%
related with 2011); audited 48.811 corporates (86,1% of the plan and 110,7%
related with 2011); collection of arrears and penalties of 5.441 billion (133%
related with 2011); Additionally, audited 1.930.476 tax records at the
headquarters of tax agencies (105,5% related with 2011), adjusted revenue
increase 1.100 billion (142% related with 2011).

Chart 3.3. Personal income tax revenues from 1991 to 2012
(Source: The General Department of Taxation)
3.2.1.2. Elevating the sense of responsibility, the voluntariness, creating the
habit of fulfilling tax duty for taxpayers
a) Elevating the sense of responsibility, the voluntariness, creating the habit of
fulfilling the personal income tax duty for taxpayers: Methods of propaganda of
tax policy on the mass media have gained good results. Many taxpayers are
aware of the personal responsibility to the State.
b) The tax administration law and the mechanism of self-declaration, selfcalculation and self-payment have brought great efficiency since in this
mechanism, taxpayers are completely active in the implementation of budget
obligations.
3.2.1.3. Redistribution and gradually managing residential income,
contributing to the social justice

23

24

a) Redistributing the income, contributing to the social justice: The personal
income tax policy lately is an important tool to adjust, redistribute income,
gradually narrow the gap between the rich and the poor in the society, towards
social justice according to the policies of the Party and the State.
b) Managing the income of residents through managing taxpayers: The
organization of management of personal income tax collection in the past few
years has helped the State to administrate gradually the income of residents.
3.2.2. The inadequacies of state management of personal income tax
3.2.2.1. Inadequacies of policy:
a) Limited and not really fair tax base
b) Unfeasible regulation with the stock dividend
c) Tax of real estate transfer still has flaws
3.2.2.2. Inadequacies of tax collection management mechanism
a) Vietnam’s rank is very low in the business environment report through the
target of tax payment

b) The assessment of business processes through the review of 15 operational
functions and the inadequacies without standard procedures for PIT
c) Regulations on household business management contain many shortcomings
d) Regulations on tax collection at sources, complex tax skills cause
difficulties in the implementation process
e) The inspection, audit, propaganda and education with inefficiency
3.2.2.3. Some assessements of taxpayers on inadequacies of personal income
tax (through investigation and survey practice)
1) The influence of the policy

- The level of tax regulation
With the level of personal income tax regulation, 51% of people
questioned assume that the amount of tax payable is high, 26% suppose that is
too high, only 22% of taxpayers thought it’s an adequate amount. These ratios
in personal income tax respectively are 51%, 26% and 22%.
- The level of time and cost waste for the completion of tax declaration
and tax payment
According to results of the investigation, it seems that taxpayers consider
the waste of time and cost for the completion of tax declaration and tax
payment are an ordinary thing. 43% think the time and the cost of personal
income tax declaration and tax payment are reasonable; 26% consider it is high
and only 18% consider it is very high.
The frequency of tax declaration
2/3 of the opinions state that the frequency of personal income tax is
acceptable (65%) while 33% of taxpayersthink that it’s too high.
- The impact of the actual tax policy on corporates
The results reveal that taxpayers’ reaction is not positive. Evaluation of
personal income tax: 13% of people assume that affect corporates positively,
nearly a half (47%) suppose it’s not significant, 35% think it’s negative and 6%
consider it is extremely negative. With the opinion on the heavy level of
regulation, those negative comments about the bad influence of tax on
taxpayers show that the tax policy is in need of alterations.
2) Other factors
There are many factors that affect to the tax compliance, the observance
of tax law obligations of both tax authorities and taxpayers since this is a
complicated matter, including the tax registration, declaration, report, payment
of taxpayers in the support and supervision of tax authorities. Those are: the
socio-economic situation, tax policy, administrative capacity of tax authorities,
factor emerged from taxpayers themselves…
3.2.3. Causes of inadequacies

Firstly, the lack of the system of legal regulations necessary for income
transparency
Secondly, people are not used to personal income tax
Thirdly, quantitative standards haven’t been applied yet for the evaluation of
personal income tax management’s effectiveness

Chart 3.8. Calculation details of the target of tax payment over the years
Tax
and
other
compulsory
payments during the
year

Times
of
payment
Time of implementation
per year
of tax obligations
Total tax rates (% profit)
2009 – 2012 2009

2010

2011

2012

2009

2010

2011

2012

Social security
Health insurance
Unemployment
insurance
Corporate income tax
Income tax from land
use rights transfer
Excise
Fuel cost
VAT
Total

12
0

400

400

372

372

16.9
2.3

16.9
2.3

16.9
2.3

18.0
3.4

350

350

233

233

19.2

19.2

1.1
11.6

1.1
16.0

1.4
0.2
0.2

1.4
0.2
0.2

0.9
0.2
0.2

1.3
0.2
0.2

40.1

40.1

33.1

40.1

0
5
1
1
1
12

32

300
1050

300
1050

Source:

336
941

336
941


25

26

Fourthly, the training of tax staff remains ineffective; the coordination between
authorities is not regular and close

and recovery of environment; the population has access to clean water; centres
of production have to apply clean technology.
4.1.2. Oriented perspectives
4.1.2.1. Perspectives of policy construction
- Reduce tax rates and expand taxable subjects. Increase space between
levels of taxable income, remove the amount of tax levels and decrease tax

rates.
- Modify taxable income threshold and family allowances to be
consistent with Vietnamese practice.
- Review taxable income sources, family allowances to be appropriate to
the situation in Vietnam, ensure simplicity, easy to implement and reduce the
tax cost.
Meanwhile, in the amendment, the construction of personal income tax
law, the State always pays attention to:
a) Guarantee justice in personal income tax management, limit the
income gap between the stratas
b) Ensure the proper encouragement of citizens’ income, encourage
every individual to work, to do business, to increase income and enrich
legitimately
c) Suitable with the country’s situation and international custom;
selective inheritance of regulations in the current tax policy
d) Ensure the mobilization of resources for the State to resolve social
matters better
4.1.2.2. Perspectives on implementation of personal income tax law and
reform of tax collection management
Tax management reform to strengthen the stability of the macroeconomy
and the structure of tax system for a more effective tax collection and tax
administration. The perspective of tax management reform is modernized
entirely in the management method, the organization of tax authorities, the staff
and the facilities are improved, ensure the effectiveness in tax administration,
minimize tax loss, ensure the correct, full and timely tax collection to the state
budget, the sense of tax law compliance of taxpayers is also elevated. Tax
management reform should be associated with boosting administrative tax
procedures reform according to the scheme 30C of the government, regularly
monitor and control timely tax administrative procedures. To reform, it’s
necessary to learn international experience related to the tax administration,

promote tax cooperation with tax authorities of other countries and global
organizations.
4.2. Some basic solutions of completing state management of personal
income tax in Vietnam
4.2.1.
Solutions of legal framework
4.2.1.1. Tax policy reform

CHAPTER 4
SOLUTIONS TO COMPLETION OF STATE MANAGEMENT OF
PERSONAL INCOME TAX IN VIETNAM
4.1. Some oriented perspectives to complete state management of
personal income tax in Vietnam
4.1.1. The basis for the proposition of perspectives
4.1.1.1. The socio-economic situation
Achievements: The average economic growth rate of 5 years 2006 –
2010 reached 7%. GDP of 2010 at current prices was 101,6 billion USD, 3,26
times higher than 2000; GDP per capita is 1.168 USD. Total investment capital
is 2,5 times higher in comparison with the phase 2001 – 2005, reaches 42,9%
GDP, total FDI obtained nearly 45 billion USD, exceeded 77,8% of the plan.
The economic structure shifts positively towards industrialization,
modernization that leads to labor structure’s shift: the proportion of industrial
sector in GDP increased from 41% to 41,1%; service sector from 38% to
38,3%; agricultural sector dropped from 21% to 20,6%; the labor structure in
agriculture reduced from 57,1% to 48,2%; in industry and construction from
18,2% to 22,4%; in service from 24,7% to 29,4%.
4.1.1.2. The socio-economic development goals
In economy: Striving for the growth rate of GDP averagely of 7 – 8% per
year. GDP of 2020 at comparative prices is 2,2 times higher than 2010; the
average GDP per capita at current prices reaches 3.000 USD. The proportion of

industrial and service sector occupies approximately 85% of GDP. The value
of high technology products and products of high technology application is
nearly 45% of total GDP. The value of product manufacturing occupies roughly
40% of total value of industrial production. The agriculture is modern,
effective, sustainable, many products have high value added. The labor
structure shifts positively: the rate of agricultural labor is nearly 30 – 35%
social labor. The aggregate productivity factor that contributes to the growth
reaches 35%; reduction of energy waste based on GDP 2,5 – 3% per year.
Saving in the use of all resources. The infrastructure is relatively synchronous,
with some modern buildings. The ratio of urbanization reaches beyond 45%.
The amount of communes qualified for new rural community’s standards is
almost 50%.
In culture, society and environment: Building a society of democracy,
discipline, consensus, justice and civilization. Until 2020, the net income of the
population will be 3,5 times higher than that in 2010; the rate of solid houses is
70%, averagely 25 m2 per citizen, the ratio of forest area reaches 45%;
education and training, science and advanced technology; improves the quality


27

28

a) Proposing the personal income tax law of 2017 with 4 levels of tax rate
Chart 4.1. Tariffs according to the Amending tax law of 2017
Tax
level
1
2
3

4

Chart 4.4. Tax payable of taxpayers without dependents

Taxable income part/year Taxable income part/month Tax rate
(million)
(million)
(%)
To 120
To 10
3
From 120 to 600
From 10 to 50
10
From 600 to 1080
From 50 to 90
20
Over 1080
Over 90
30

Within the framework of the thesis, the author uses the model of
evaluating the impacts of the budget collection on inviduals without dependents
with the following data:
Chart 4.2. Difference between tax payable of taxpayers without dependents
2017
Tax payable (million)
Income
(million)
100

200
400
600
800
1,000
1,400
1,800
2,000
2,200
2,400

Current law

Proposed law of 2017

0.0
4.3
31.0
69.8
115.0
168.9
287.5
414.2
477.5
540.9
604.2

0.0
2.2
17.0

35.1
54.8
91.0
171.3
279.9
334.2
388.5
442.8

Difference of tax
payable
0.0
-2.1
-14.0
-34.7
-60.2
-77.9
-116.2
-134.3
-143.3
-152.4
-161.4

b) Proposing the tax reform of 2022 with 2 levels of tax rate and elevate the
family allowances threshold
Chart 4.3. Tariffs according to the Amending tax law of 2022
Tax level
1
2

Taxable income part/year Taxable income part/month Tax
(million)
(million)
(%)
To 240
To 20
3
Over 240
Over 20
20

Evaluating the impact of budget collection through single model:

rate

Tax payable (million)
Income
(million)
100
200
400
600
800
1,000
1,400
1,800
2,000
2,200
2,400

Difference of tax payable

Amended Amended Amended 2022 related to 2022 related to
law 2012 law 2017 law 2022 2012
2017
0.00
4.30
31.00
69.75
115.00
168.90
287.45
414.15
477.50
540.85
604.20

0.00
2.19
17.00
35.10
54.80
91.00
171.30
279.90
334.20
388.50
442.80

0.00

0.00
4.74
27.00
63.20
99.40
171.80
244.20
280.40
316.60
352.80

0.00
-4.30
-26.26
-42.75
-51.80
-69.50
-115.65
-169.95
-197.10
-224.25
-251.40

0.00
-2.19
-12.26
-8.10
8.40
8.40
0.50

-35.70
-53.80
-71.90
-90.00

4.2.2. Solutions of the organization
Firstly, building the personal income tax management organization with
the model of centralized data processing center
Secondly, strengthening the organization of tax collection management
towards enhancing power, responsibility and efficiency of tax authorities of all
levels
Thirdly, reinforcing training and improving the level of tax officials in all
aspects
4.2.3. Solutions of personal income tax collection management
Firstly, intensifying the propaganda, education and providing the service
of supporting taxpayers to elevate the voluntariness and possibility of taxpayers
Secondly, reforming tax procedures and the process of tax management
methods consistent with the management model and the method of selfdeclaration, self-calculation and self-payment
Thirdly, improving the electronic management with the application of
high technology, accelerate the progress of implementing the project of
electronic tax declaration, tax payment through executing the integrated tax
administration information system (ITAIS) that works properly, successfully
consolidates with the project of the personal income tax management software
4.2.4. Solutions of tax inspection and tax audit
- About the inspection and audit of taxpayers
- Organizing and decentralizing the internal inspection and audit
- About the conditions of support
- Enhancing the function of tax authorities to be empowered to
investigate, prosecute.

29

- Establishing the section of resolution of complaints about tax at the
central and local tax authorities
4.2.5. Other solutions
Firstly, the policy system of social-economic management must be
reformed synchronically to create the base for the personal income tax
collection management
Secondly, creating the route for the implementation of solutions
Thirdly, exchanging information between the tax authorities and social
security
Fourthly, analyzing the tax collection management mechanism depending
on the method of cash flow management
CONCLUSION
Within the research range, the thesis has resolved these basic issues:
Firstly, collecting, analyzing the theoretical issues of the state
management of personal income tax.
Secondly, consulting experience of state management of personal income
tax of other countries, comparing to the international studies to learn the lesson
for Vietnam
Thirdly, generalizing the completion process of the state management of
personal income tax in Vietnam, making assessments about achievements and
restrictions. In the meantime, indentifying the origin of inadequacies to create a
base for suggestions of solutions to complete the state management of personal
income tax in Vietnam in the future.