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Vietnam Introduces New E-Invoice System to Increase Transparency, Save Costs

Image credit: Ministry of Information and Communications

The General Department of Taxation recently operationalised the first stage of electronic invoices (e-invoices) in six cities and provinces, where the number of enterprises accounts for 60% of Vietnam’s total operating enterprises and 70% of invoices nationwide. These included Hanoi, Ho Chi Minh City, Hai Phong, Quang Ninh, Phu Tho, and Binh Dinh. This is a significant step forward in the Ministry of Finance’s effort to save costs, create an open and transparent business environment, and accelerate the national digital transformation process.

Introduced in 2010, e-invoices have been well-received by the business community as they helped save time and expenses. They have also allowed the department to modernise its management system and to become more time-efficient. Since the country’s tax authority rolled out a centralised tax management system in 2015, information technology (IT), digitalisation, and automation have been at the core of the department’s reform effort, a news report stated.

According to the department, the deployment of electronic invoices in the six cities and provinces will play a decisive role in providing e-invoices nationwide. The General Director of Taxation, Cao Anh Tuan, said this system would solve questions and problems from individuals and enterprises regarding e-invoices. This system would help the department organise and direct the application of e-invoices for the six taxation departments, before expanding to the taxation departments of 57 other provinces and cities. The department has set a target to roll out e-invoices in all cities and provinces across the country no later than the end of June 2022.

The move to e-invoices has been said to play a key part in the financial sector’s digitalisation effort while will help cut costs incurred by printing, storing, and transporting traditional paper-based invoices. The department noted that this will help build the country’s digital tax database and improve accuracy, security, and conformity in tax management nationwide. The central government has urged all local government offices to make it a top priority to implement the system by working closely with the Ministry of Finance and the department to ensure a smooth transition to the e-invoices.

By the end of October this year, nearly 850,000 businesses had signed up for electronic filings. The department has processed 16 million files in 2021 alone. Since 2014, over 837,000 or 99% of all businesses across the country have used the department’s electronic system to pay their taxes. The government’s electronic tax return scheme, since its implementation in 2017, has made payments to over 8,000 firms among 8,200 eligible firms.

Last month, OpenGov Asia reported that digital technology could potentially bring over US$74 billion to Vietnam by 2030, with the most beneficial sectors including manufacturing, agriculture and food, and education training. The country has many opportunities as the young, educated, and tech-savvy population accounts for 70% of its citizens under 35 years old. The literacy rate in the 15-35 age group is over 98%, higher than the average global rate of 91%. About 70% of the population uses smartphones. Vietnam also has the second-fastest-growing Internet economy in Southeast Asia after Indonesia. The country aims to be among the top 50 countries in the ICT Development Index as early as 2025, and its digital economy is hoped to account for one-third of the country’s GDP by the end of the decade, instead of only 5%.

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