Hanoi (VNS/VNA) - Vietnam faces increasing tax evasionand avoidance as policies have not kept up with reality, according to a reportby the Vietnam Institute for Economic and Policy Research (VEPR) and Oxfam.

Tens of thousands of businesses have been detected violatingenterprise income tax rules worth up to trillions of VND per year from 2010 –2018.

Tax violations not only occur among multinationalcorporations but also in State-owned enterprises as well as domestic privateenterprises; not only in large-scale enterprises but also in small andmedium-sized enterprises.

VEPR said although Vietnam had tried to consolidate the legalframework for tax administration, laws were still inadequate, inconsistent andhad not kept pace with the reality of rapid and complex developments.

In the period, revenue loss in both value and proportion ofcorporate income tax has been on an upward trend since 2014.

Tax evasion and avoidance caused a revenue loss estimated atbetween 15.6-20.7 trillion VND each year, equivalent to 7.5 - 9.9 percent ofcorporate income tax revenue.

Professor Nguyen Hoang Oanh from the National EconomicsUniversity said tax evasion was a common phenomenon in the economy.

In Vietnam, multinational enterprises have the bestopportunity to evade taxes as they set up many branches abroad, shiftingprofits in high tax rates places to low tax rates places, Oanh said.

Nguyen Duc Thanh, a senior advisor of VEPR, said that to combattax evasion the country was trying to cut corporate income tax to compete withother countries in the region.

The reduction of corporate income tax might cause the countryto enter into competition with other countries, and there might be a race fortax incentives for businesses among ASEAN countries, Thanh said./.