Late tax payment fines may be charged progressively

Late tax payment fines may be charged progressively

Penalties for late tax payments, currently at 0.05% per day, irrespective of the period of delay, may be charged on a progressive basis in the future, according to the draft amendment to the Tax Management Law under consideration of the National Assembly (NA) Standing Committee at present.

The Ministry of Finance deemed the penalty rate of 0.05% per day too low. As a result, many taxpayers deliberately delay their payments in order to appropriate tax revenue, bringing huge losses to the State budget.

To deal with this situation, the finance ministry suggested fines for late tax payments should be increased progressively by 0.05% each day within 90 days. Since the 90th day onwards, the penalty rate would be raised to 0.07% per day.

The ministry also specified the prescription, meaning the limitation of time for sanctions against tax violations.

Those violating the procedures might be imposed a two-year sanction. As for tax evasion, tax fraud, delayed tax payment and improper tax declaration, the limitations of sanctions would be raised to five years.

The NA Standing Committee on Wednesday proposed the amended Tax Management Law should come into force on January 1, 2014, instead of July 1, 2013 as recommended by the Government.

NA Chairman Nguyen Sinh Hung explained the law revision was aimed at administrative reform in taxation. The amended provisions will offer taxpayers favorable conditions, tighten control on tax frauds and prevent corruption in tax collection, so it must take more time, said Hung.

The Saigon Times