Hanoi (VNA) - HCM City has asked the municipal tax authority to enhancepreventative measures against tax fraud and transfer pricing to ensure taxrevenue and improve business confidence.

DeputyChairman of HCM City People’s Committee, Tran Vinh Tuyen, said at a conference this week that the Government is urgently working to develop a scheme toprevent losses from tax collection and transfer pricing.

“Thebenefits from the scheme will not only include increasing tax revenue but alsoenhancing business confidence,” Tuyen said.

Tuyenstressed the importance of creating favourable conditions for firms to boosttheir business in order to fulfill this year’s tax collection goal.

TranNgoc Tam, Director of the city’s Department of Taxation, explained thattransfer pricing is a scheme that firms use to avoid paying taxes due todifferences in tax rates among countries. “The corporate income tax of Vietnamshould be reviewed to narrow the gaps with other countries,” Tam said.

Tamsaid that the taxation framework, especially on the operation of multinationalcompanies with transactions between related entities, should be improved toprevent transfer pricing.

Hesaid the database on average industry benchmarks should be developed soon,calling such systems useful in inspecting firms with related–partytransactions.

Accordingto Nguyen Hoang Minh, Deputy Director of the southern branch of the State Bankof Vietnam, transfer pricing requires close coordination between relevantorganisations and agencies to ensure efficiency.

Thecentral bank is striving to reduce the proportion of cash transactions, from19-20 percent to 10 percent currently, which is a solution to prevent taxlosses.

DeputyMinister of Finance Vu Thi Mai said that the municipal tax watchdog must hasteninspections, with a focus on sectors and firms in which it is easy to committax evasion, adding that punishments must be strong enough to deter violations.

“Taxreform, especially the application of information and technology, must behastened,” Mai said.

Mai asked the municipal taxation department to improve tax collection amonge-commerce businesses booming in the southern city.

PhamThanh Kien, Director of the HCM City Department of Industry and Trade, saidthat there are around 80,000 e-commerce websites in the city, half of whichoperate regularly. It remains difficult to collect taxes on these businesses.

Kiensaid that nearly no taxes are collected on sales activities via Facebook,adding that local authorities should work with the social network to formmechanisms to control revenues.

HCMCity planned to collect 238.9 trillion VND (10.4 billion ÚD) for the Statebudget in 2017.

Lastyear, the city’s tax revenue reached nearly 203.3 trillion VND, increasing by10.5 percent over 2015.-VNA