An online tax payment form seen on a computer screen. Photo credit: Tuoi Tre
About one year after launching its online tax payment system in collaboration with local banks, the Ministry of Finance is urging local businesses to use the service and ditch cash payments.
In its latest letter to local governments, the ministry asked them to urge businesses to adopt the online service, and order banks to stop accepting businesses' tax payment in cash starting next month, local media reported this week.
More than 90 percent of businesses around Vietnam have registered for the service to pay taxes, but very few of them have actually used it, the ministry said.
In Ho Chi Minh City, which hosts around 161,000 businesses, the ban on tax payments in cash will take effect on December 1, Tran Ngoc Tam, deputy chief of the city's tax office told Tuoi Tre newspaper on Thursday.
In the city only 40 percent of businesses have switched to online payments even though almost all companies have signed up for the services, he said.
Although businesses hesitate about the service, mainly because they are concerned about its security, so far none of those who use it have reported any problem, he said.
The current online payment system allows businesses to increase their account's safety by creating multiple passwords and security features, he said.
Tam also addressed other concerns among businesses, saying that the ministry has sought the central bank's help to reduce wiring fees. The agencies will also simplify the payment process, Tam said.
Businesses in Vietnam spend 770 hours a year paying 30 tax payments, compared to the East Asia and Pacific's average of 201.4 hours and 25.3 payments, according to the World Bank's Dong Business 2016 report released last month.