Friday,  Apr 19, 2019,22:03 (GMT+7) 0 0
Draft law asks banks to provide customer details to taxman
The Saigon Times Daily
Thursday,  Nov 8, 2018,22:10 (GMT+7)

Draft law asks banks to provide customer details to taxman

The Saigon Times Daily

A customer transacts at a bank in HCMC. Many enterprises and experts have voiced their opposition to a regulation requiring banks to provide tax agencies with bank account information of their clients – PHOTO: THANH HOA

HCMC – The Government has submitted to the National Assembly a proposal on the revised Law on Tax Management that would require banks to provide details of their clients’ accounts to tax authorities, reported Nguoi Lao Dong newspaper.

The Government stated in the proposal that the amendment of the law was essential to fine-tune tax management institutions, facilitate administrative reform, improve the business climate and support the development of all economic sectors.

At the same time, the revision is expected to create a legal framework for the application of information technology to tax administration.

One regulation states that commercial banks are responsible for providing the bank account details of taxpayers, including personal information, transactions and account balances, to tax authorities within 10 working days upon receiving the request.

This regulation was earlier met with fierce opposition from experts, lawyers and business associations. They reasoned that the amendment does not guarantee transparency, which could lead to the abuse of power.

According to them, the relationship between banks and taxpayers is of a civil nature. Thus, banks must inform their clients of the circumstances in which their information will be provided to third parties. These cases must be justified and logical to guarantee the legitimate rights and interests of the involved individuals and organizations.

In a letter responding to the draft amendments sent to the Ministry of Finance – the agency in charge of the proposal – in September, the State Bank of Vietnam claimed the draft regulation was unreasonable because the banking sector was not in charge of tax management.

In addition, no other country has such a regulation, and it does not fall under the requirements for information security, regulated by the Law on Credit Institutions, the central bank stated.

Besides this, the vast number of bank accounts in existence would make it difficult for banks to report to tax authorities in a periodic manner.

Current regulations state that banks only have to provide account information when required to do so by State judiciary agencies, including the procuracy, the court and the police, to serve the process of inspection, investigation and prosecution.

However, the taxman argued that such information also helps fight tax evasion.

Earlier, the HCMC Tax Department checked the accounts of five local banks, noting that some 18,900 individuals and organizations had received incomes of VND1.092 trillion and US$17.8 million from Facebook and Google between 2014 and November 2017. They did not declare their incomes or pay taxes in line with prevailing regulations.

The local taxman has so far collected some VND14 billion in taxes from 89 of these individuals and organizations. It also informed its counterparts in other localities of the fact that some 5,800 individuals under their jurisdiction had earned US$7.1 million and VND97 billion from Facebook and Google.

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