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World Bank, Japan support Vietnam to improve tax system

The World Bank and the State Bank of Vietnam yesterday signed a financing agreement for a grant worth US$4.2 million provided by the Japanese Government to carry out the Revenue Administration Reform Support Project.

World Bank, Japan support Vietnam to improve tax system

The 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 modernization of the tax policy framework by assessing the impacts of tax policy changes.
Indeed, the changing composition of Vietnam’s tax revenues toward increased reliance on domestic sources poses both opportunities and challenges. This calls for enhanced efforts to strengthen tax policy formulation and modernize tax administration.
There is a need to strengthen the performance of core tax administration areas, especially those with high impacts on tax compliance, operational efficiency and transparency.
The tax policy framework should aim at broadening the base and rebalancing the tax mix to exert coherent impacts on sustainable revenue mobilization and reduction of tax-induced burden on growth and equity.
A major component of this project is the development of a roadmap to modernize 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 analyze and formulate tax policies. The project will analyze the impacts of proposed changes to core tax instruments, in line with Vietnam’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.

By UYEN PHUONG

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