What is the application of information technology in risk management in tax administration in Vietnam?

What is the application of information technology in risk management in tax administration in Vietnam?

Based on Clause 16 Article 3 Circular 31/2021/TT-BTC regulated as follows:

Terminology explanation

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15. Key monitoring is the application of professional measures by the tax authority towards taxpayers (assessed) with high tax risks or non-compliance with tax laws in specific business fields, locations during specific periods.

16. Application of information technology in risk management in tax administration (hereinafter referred to as risk management application) is the application of information technology to connect, receive information from related data sources within and outside the tax authority, electronize risk management measures and techniques based on issued sets of criteria, indexes to analyze, evaluate compliance, determine the risk level to serve the decision to apply professional measures of the tax authority.

17. Taxpayer segmentation is the division of taxpayers by the tax authority into groups with common characteristics to apply appropriate management measures.

18. Classification by machine learning method is the implementation of computational, statistical algorithms on computers to determine models, functions, indexes to help classify, predict risk levels.

19. The ranking method by category is the method of evaluating taxpayers through comparison with criteria, indexes on operational process and compliance with tax laws, arranged into groups corresponding to each ranking level. A taxpayer achieves a specific ranking level if evaluated to meet the criteria, indexes in the set of criteria, indexes corresponding to that ranking level.

20. The scoring and classification by score method is the method of evaluating taxpayers based on the scores of criteria, indexes on operational process and compliance with tax laws.

Thus, the application of information technology in risk management in tax administration is the application of information technology to connect, receive information from related data sources within and outside the tax authority, electronize risk management measures and techniques based on issued sets of criteria, indexes to analyze, evaluate compliance, determine the risk level to serve the decision to apply professional measures of the tax authority.

What is the application of information technology in risk management in tax administration in Vietnam? (Image from the Internet)

What should be done if there is an error with applying information technology in risk management in tax administration in Vietnam?

Based on Clause 6 Article 4 Circular 31/2021/TT-BTC regulated as follows:

Principles of risk management

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5. In the case of complying correctly with the provisions of the law, regulations in this Circular, and guidelines on risk management, tax officials are exempt from personal responsibility as per the legal provisions.

6. In case the risk management application encounters issues or does not meet the requirements of risk management application as specified in this Circular, risk management will be implemented manually through the approval of the proposal document or the document signed for issuance by the authorized person to apply professional tax management measures as regulated in the Tax Management Law and guiding documents.

7. If there is a change in information leading to a change in the result of compliance evaluation and risk level classification for the taxpayer, and the risk management application does not automatically adjust the compliance level and risk level, the update for the change in evaluation result is manually implemented by the official after obtaining the approval of the authorized person.

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Thus, when the risk management application in tax administration encounters issues, risk management is conducted manually through the approval of the proposal document or the document signed for issuance by the authorized person to apply professional tax management measures.

Vietnam: Where is the application of information technology in risk management in tax administration built and centrally managed?

Based on Article 9 Circular 31/2021/TT-BTC as follows:

Application of information technology in risk management

1. The risk management application and the database about taxpayers are built and centrally managed at General Department of Taxation*, ensuring information as the basis for risk assessment is fully, accurately, promptly updated through the information exchange connection with electronic tax data processing systems and related information data systems.*

In case of system failure or transmission line error, the updating, integration, processing, and storage of information on the system are implemented as soon as the error or system failure is resolved.

2. Apply management measures to ensure data safety, data security, computer safety, and network security as per legal provisions.

3. The General Department of Taxation specifies the responsibilities of units and tax officials at all levels in building, managing, operating, updating, exploiting, and using the risk management application relevant to each professional tax activity field.

Thus, the application of information technology in risk management in tax administration is built and centrally managed at the General Department of Taxation.