Tax authority aims to enhance data–based management

HÀ NỘI — The tax authority is looking to strengthen tax management through the analysis of cash flows and digital transaction data as rapid growth in digital technology, e-commerce and new business models reshapes the economy, a conference heard on Wednesday.Speaking at the conference on tax management based on cash flow jointly held by the Department of Taxation and Tiền Phong (Vanguard) newspaper, Đặng Ngọc Minh, deputy director of the Department of Taxation, said traditional tax administration methods relying mainly on tax declarations, accounting records and post-audit inspections were no longer sufficient in some cases.“Researching and gradually implementing tax management based on cash flow analysis is becoming an inevitable trend among many modern tax authorities around the world,” Minh said.Việt Nam has introduced several measures to modernise tax administration, including nationwide electronic invoices, invoices generated from cash registers, centralised databases and digital systems for risk management and tax administration.The tax authority has also launched an online portal for foreign service providers and expanded data-sharing with ministries, banks and related organisations.Minh said electronic invoices had generated a vast database of economic transactions, but many individuals and organisations still conduct large and frequent transactions through bank accounts, digital platforms, payment intermediaries and delivery services without fully declaring related tax obligations.In the coming period, electronic invoice data will be used as the core reference to compare and verify other cash flows linked to taxpayers to help determine actual tax liabilities, analyse risks and conduct inspections where necessary.To ensure efficient tax management, cash flow data must be accurate, sufficient, clean and live, Minh said, adding that this also requires real-time coordination and data-sharing between tax authorities, banks, payment intermediaries and technology platforms to form a data ecosystem.Minh said the tax authorities currently have access to information linked to around 250 million bank accounts, including approximately 200 million personal accounts, through data-sharing mechanisms with financial institutions.He said not all personal transactions are monitored by the tax authorities and that artificial intelligence (AI) tools will be used to focus on cases showing genuine risk.According to Nguyễn Tiến Trung, head of the Tax Inspection Board under the Department of Taxation, the approach represents a shift from document-based tax administration to data-driven management and near real-time risk monitoring.“As transactions become increasingly digitised through bank transfers, e-wallets, QR codes and e-commerce platforms, each transaction leaves a digital trace,” Trung said, adding that this provides important data for tax authorities to compare declared revenue with actual cash flows and detect unusual transactions.He said the tax authority has identified a number of potentially high-risk practices, including dispersing revenue through multiple personal bank accounts, using internal loan contracts or service agreements that do not reflect the true nature of transactions and prolonging advance payments without clear purposes.E-commerce and household businesses are considered among the sectors with the highest risk of tax evasion due to undeclared or underreported revenues, he said.“Once data systems are fully integrated, tax inspections will shift significantly towards automation,” Trung said, adding that tax authorities will be able to monitor risks in real time, conduct remote inspections through electronic portals and prioritise resources on taxpayers with the highest risk indicators.According to Nguyễn Thị Cúc, president of the Tax Consultants Association, it is critical to enhance coordination among banks, tax authorities and digital platforms to close loopholes in tax collection and improve transparency.“With the rapid growth of e-commerce and digital business, tax management cannot be effective without a connected digital ecosystem between banks, tax authorities and technology platforms,” Cúc said.She added that AI, big data analysis and automated risk warning systems would help tax authorities detect fraudulent activities earlier.Cúc said digital platforms should be made easier and more convenient for taxpayers to use.“The most important factor is building trust to encourage businesses and household traders to declare taxes transparently and avoid concerns about unreasonable tax arrears or penalties. With proper guidance and communication, many taxpayers would be willing to fulfil their tax obligations voluntarily,” Cúc said. — VNS