The General Department of Taxation of Vietnam is trying to complete a national project on tax administration modernization by 2015.

The Tax Administration Modernization Project (TAMP) is designed to raise the tax management capacity at all levels.

The project, launched in 2008 with a $97.5 million financing from the World Bank, Japan’s loan and Vietnam's counterpart capital, will also help reduce corruption and offer improved e-tax services for taxpayers.

The project is expected to help the country realize its Tax Reform Strategy towards 2020, said Nguyen Minh Ngoc, vice director of the project management board.

“Vietnam is seeking to build a tax policy system that is comprehensive, consistent, fair, efficient and suitable to the socialist-oriented market economy,” he told Vietnam News Agency.

“Simplified transparent tax management is based on three major pillars, namely simplified administrative procedures, qualified human resources and highly integrated automatic taxation information,” he added.

The strategy included ambitious goals, such as placing Vietnam fourth in the region in tax advantage by 2020, applying information technology in all tax offices and ensuring that 90 percent of enterprises used e-tax services, Ngoc said.

“The project would focus on improving risk management and enforcement analysis in the tax sector, anti-corruption activities, applying information technology in tax management and project management capacity building, Ngoc added.

"Some 80 percent of the project investment will be spent on IT development, which will primarily support the procurement and implementation of a proven Integrated Tax Administration Information System (ITAIS)," he said.

The ITAIS will support all tax management processes, including tax registration, data processing, tax payment and refund, and tax violation detection, for all kinds of taxes except personal income tax.

However, the introduction of the innovation could be risky, bringing up issues such as incompatibility between systems and a shortage of staff qualified to use it, Ngoc said.

The legal framework for taxation had been improved through reforms in 1990 and 1998, approvals for amended tax management law in 2012 and the amended Corporate Income Tax Law and Value-added Tax Law in 2013 as well as the Tax Reform Strategy from 2011 to 2020, Pham Minh Duc, senior World Bank economist told Vietnam News.

“A 2011 World Bank survey on tax reform showed that the Vietnamese tax system ensured relative equality, as people with higher incomes or expenditure paid higher taxes,” Duc said.

“However, the cost for enforcement of tax regulations in Vietnam was also high, as measured by the number of times people paid taxes and number of hours spent on taxpaying procedures,” he added.