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Draft regulation about banks providing customers’ accounts to tax authorities causes controvery


A draft regulation that would require banks to provide details of customers’ accounts to tax authorities has been causing controversy.

Some people argue that it would help tax authorities prevent tax evasion, others say it could lead to abuse of power.

The draft amendments to the Law on Tax Management state that commercial banks must provide bank account information of tax payers, including personal information, transactions and account balances, to tax authorities.

In a document responding to the draft amendments sent to the Ministry of Finance, the State Bank of Viet Nam said the draft regulation was unreasonable because the banking sector was not in charge of tax management.

In addition, no other country had such a regulation, and did not come under the requirements for information security regulated by the Law on Credit Institutions, the central bank said.

Besides, the huge number of bank accounts would make it difficult for banks to report periodically to tax authorities.

Current regulations state that banks only have to provide account information when required by State agencies, including the procuracy, the court and the police, to serve the process of inspection, investigation and prosecution.

The draft amendment also includes a regulation saying that banks should be responsible for automatically deducting money from customers who make large amounts of revenue from e-commerce.

The State Bank of Viet Nam said automatic deductions would not protect customers’ legitimate rights.

Ha Huy Phong, director of law firm Inteco, said that bank must protect customers’ rights.

Automatic deductions to pay taxes for income from e-commerce business would be infeasible because it would be very difficult for banks to verify payable taxes from the cash flow, according to Phong.

Truong Thanh Duc from law firm Basico said that detailed regulations were to prevent abuse of power and information leaks.

According to Nguyen Duc Nghia, chairman of HCM City Club of Tax Agents, support from banks was necessary to improve tax management, especially with tax evasion becoming more complicated due to booming e-commerce businesses.

Nghia, however, said that it needed tight regulations to ensure security and protect the rights of customers.

Dau Anh Tuan, head of the Legal Department at the Viet Nam Chamber of Commerce and Industry, said that the current draft regulations lacked transparency and were too general.

What information would be provided and at which levels should be regulated in the details, Tuan said.

Last week, the Goverment issued Decree 117/2018/ND-CP regarding confidentiality about customers’ information at credit institutions and foreign banks.

Accordingly, customers’ information must be kept confidential.

Banks were only allowed to provide information for organisations with rights to request that information or with customers’ agreement, according to the decree.

The decree will take effect on November 1.

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