Cause of the Problem 

Current tax management laws stipulate that only directors of provincial or centrally-affiliated city tax departments have the authority to approve tax refunds. This has led to several drawbacks:

• Prolonged refund times: Large enterprises must submit refund applications to higher-level authorities, causing delays and affecting their cash flow.
• Cumbersome administrative procedures: The process involves excessive administrative procedures, creating difficulties for businesses.
• Underutilization of resources at lower levels: Lower-level tax management agencies, which have direct contact with businesses, lack the authority to make decisions, resulting in resource waste.

Proposed Solution 

To overcome these limitations, the Ministry of Finance has proposed granting refund approval authority to directors of large enterprise tax departments, as well as heads of tax sub-departments and regional tax sub-departments. This means:

• Large enterprise tax departments: Will have the authority to approve refunds for large enterprises under their management.
• Tax sub-department heads: Will have the authority to approve refunds for businesses under their jurisdiction.

Benefits of Expanding Authority

Expanding refund approval authority offers numerous benefits:

• Shorter refund times: Businesses will receive refunds more promptly, improving cash flow and enhancing investment capacity.
• Reduced administrative procedures: Unnecessary procedures will be eliminated, creating a more business-friendly environment.
• Improved tax management efficiency: Maximizing the use of resources at all levels of tax management, fostering proactivity and accountability.
• A more conducive business environment: Attracting investment and stimulating economic growth.

Business Feedback 

The business community has expressed strong support for the Ministry of Finance’s proposed amendments. Expanding refund approval authority is seen as a significant step forward in administrative reform, creating a more favorable business environment.

Conclusion 

Granting additional authority to decide on tax refunds is an effective solution for improving the business environment and facilitating business development. It is also part of the ongoing administrative reform and modernization of Vietnam’s tax management system.