A lot of businesses make use of the open policy by exploiting invoices

According to an official Dispatch from the GDoT, the Tax sector has promoted the implementation of electronic and digital transformation in tax management, as well as the provision of electronic tax services such as electronic tax declaration, electronic tax payment, electronic tax refund, and electronic tax service on mobile devices (Etax Mobile), deploying an Electronic portal to declare and pay tax for foreign suppliers under the close supervision of the leaders of the Government and the Ministry of Finance (MoF). As a result, these have created the most favorable conditions for individuals and businesses in fulfilling their tax obligations easily and quickly.

The nationwide use of e-invoices from July 1, 2022, in particular, has been a pivotal turning point, resulting in profound reforms and a significant impact on tax management. The implementation of the e-invoice system has reduced costs for businesses and individuals while also creating a healthy and equal business environment among tax-paying organizations and individuals.

However, over the past time, some taxpayers have taken advantage of the openness of mechanisms and policies by establishing businesses without the aim of production and business but for the act of buying, selling, and using false invoices. Some businesses do have production and business activities, but their sense of compliance with tax law is rather low. They have engaged in illegal invoice trading activities to declare tax deductions, value-added tax (VAT) refunds, VAT misappropriation, and false declaration of deductible expenses to evade corporate income tax, thus causing a loss to the State budget. This behavior has harmed the production and business environment, created an unequal competitive environment among businesses, caused irritation in society, and deteriorated the tax administration of tax authorities.

Concerning invoice management, given that circumstance, in addition to providing mining functions on the e-invoice system, the GDoT continues to promote the implementation of applications to support the verification, comparison, and exploitation of e-invoice data for tax management through the implementation and deployment of artificial intelligence (AI) to analyze Big Data in the buying and selling chain of businesses, thereby quickly and accurately detecting signs of fraud in using e-invoices.

The Tax Sector strongly denounces the illegal purchase, sale, and use of invoices

This is a significant advancement in invoice management in comparison to traditional paper invoice management, which frequently requires a considerable amount of time to review, inspect, and examine to detect violations in the use of illegal invoices.

According to the GDoT, the provisions of the National Assembly's Law on Tax Administration No. 38/2019/QH14; and the Government's Decree 125/2020/ND-CP have regulations on sanctioning administrative violations for illegal use of invoices and illegal use of invoices. The Penal Code includes provisions for criminal prosecution for tax evasion crimes involving the use of illegal invoices, as well as crimes involving the illegal purchase and sale of invoices.

Nevertheless, during the tax administration process, tax authorities have identified typical acts of violating the law of some businesses, organizations, and individuals on purpose to deliberately use false e-invoices to appropriate tax refunds from the State budget, such as issuing fraudulent invoices, buying and selling false invoices for profit; making wrong invoices to legalize, reducing input costs to lower payable taxes, incorrectly or insufficiently declare; not issuing invoices for exported goods; reforming commercial discount invoices as adjusted invoices.

A range of typical cases have been investigated and prosecuted by police investigation agencies such as those in Phu Tho, Hai Phong, Quang Ninh, and Ninh Binh. The acts of deception of businesses are very sophisticated with the nationwide scope of implementation, occurring from establishment to abandonment of the business place or till the competent State agencies detect violations of the law in a short time.

Take a hard line on violations

In the light of the aforementioned situation, the Government Office issued Document No. 5465/VPCP-KTTH on July 20, 2023, informing the direction of Deputy Prime Minister Le Minh Khai on the information mentioned in the review and processing of invoices to express the consistent view in the struggle to strictly handle illegal acts of trading and using e-invoices with the purposes of evading taxes and misappropriating taxes.

As a result, Deputy Prime Minister Le Minh Khai requested that the MoF strictly supervise the issuance and use of invoices, detecting and strictly dealing with acts of buying and selling, using illegal invoices for tax evasion, and appropriating tax refunds from the State budget.

According to its competence, functions, and tasks, the MoF has been assigned to "manage and supervise the issuance and use of invoices strictly under regulations, detect and strictly handle illegal acts of trading and using invoices for tax evasion, appropriation of tax refunds from the State budget, provide information timely, publicly, and transparently to press agencies, and minimize negative impacts on production and business activities."

Following the consistent view of the Government, the MoF, and the GDoT are resolute in the prevention of fraud and the illegal use of false e-invoices and frauds in VAT refunds. At the recent conference on the Implementation of Financial Work held in the last six months of 2023, Minister of Finance Ho Duc Phoc desired and requested ministries, branches, and localities to pay special attention and collaborate with the MoF to resolutely and explicitly address fraud in the use of illegal e-invoices and VAT refund to ensure compliance with the law.

Regarding the Tax sector, in addition to continuing to promote digital transformation and maximize the exploitation of Big Data in tax management and management of e-invoices to prevent, combat, and resolutely deal with deliberate violations of illegal use of e-invoices in order to appropriate taxes from the State budget, the GDoT looks forward to receiving the attention, coordination, and effective support of press agencies in the work of information, propaganda, detection, reflection, and condemnation of businesses and organizations, individuals violating the law on using e-invoices. As a result, it will make an important contribution to the Tax sector in implementing public, transparent, and equal tax administration to help businesses and citizens develop production and business.

Simultaneously, tax authorities at all levels will continue to timely provide complete and transparent information to press agencies to ensure honesty, and accuracy, and minimize adverse impacts on the production and business activities of individuals and businesses ./.