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Vietnam Academy of Social Sciences GRADUATE ACADEMY OF SOCIAL SCIENCES HOÀNG THỊ NGỌC NGHIÊM IMPROVING THE EFFECTIVENESS OF PERSONAL INCOME TAX MANAGEMENT IN HO CHI MINH CITY Major :Development Economics Code : 9.31.01.05 SUMMARY OF THESIS OF ECONOMY HANOI – 2022 The project was completed at: Vietnam Academy of Social Sciences GRADUATE ACADEMY OF SOCIAL SCIENCES Scientific guide group: Assoc Prof Dr Quach Duc Phap Dr Nguyen Quoc Huy Reviewer 1: Prof Dr Do Duc Binh Reviewer 2: Assoc Prof Dr Bui Van Can Reviewer 3: Assoc Prof Dr Nguyen Xuan Trung The thesis will be defended before the Academy level thesis committee, at: Academy of Social Sciences, 477 Nguyen Trai, Thanh Xuan, Hanoi At …….hour, date ……month ……year …… The thesis can be found at: - Library of the Academy of Social Sciences - Vietnam National Library INTRODUCTION The necessity of the research Tax is the basic and long-term source of national budget revenue and the most important financial source for implementing investment policies for socio-economic development of the country Tax revenue is considered as the lifeblood of the economy for a country At the same time, through the tax policy, the State will regulate the income gap between the rich and the poor, by subsidizing or providing public goods with sources of personal income tax, corporate income tax, etc In the developed countries, personal income tax is a relatively early direct tax and accounts for a very high proportion of 30% to 40% of total tax revenue In Vietnam, the Personal Income Tax Law that took effect on January 1, 2009 has helped the Government offset the decline in revenue from import and export due to the implementation of commitments to reduce import and export tax imports in international free trade agreements, on the other hand, makes our country's tax system more and more close to the world's practices After 10 years of implementation, personal income tax revenue has increased from 14,318 billion VND (in 2009) to nearly 109,400 billion VND (in 2019), but now accounts for only about 7% of the total state budget revenue (according to 2019 data) However, under the strong impact of international economic integration, the process of trade liberalization has led to a change in tax structure and tax revenue of the state budget Especially, the strong development of information technology, the increasingly popular non-cash payment market transactions have created favorable conditions for the expansion of the scope of application of direct taxes, in which personal income tax Therefore, the management of personal income tax is also very complicated and has many difficulties, so it is often not as effective as other taxes, especially on the basis of the digital economy, many business activities Businesses that have switched to follow new non-traditional models such as e-commerce, cross-border, online sales, agents, subscribers are big challenges for tax administration to prevent personal income tax fraud, personal income tax evasion in our country In addition, due to the decentralization of state budget management in Vietnam, the law on all taxes is promulgated by the National Assembly, so the local level basically only performs the collection work, not the collection of taxes allowed to make its own rules This leads to inadequacies and limitations that need to be studied and adjusted to suit each locality Therefore, it is necessary to have the most radical solutions to improve the efficiency of personal income tax management for Ho Chi Minh City and for the national personal income tax management system That is the reason why the PhD student chooses the topic "Improving the effectiveness of personal income tax management in Ho Chi Minh City" as his doctoral thesis majoring in Development Economics Purpose, tasks and research questions of the thesis 2.1 Research purposes: Proposing solutions to improve the efficiency of personal income tax management in Ho Chi Minh City in the coming time 2.2 Research mission: (1) An overview of theoretical and practical issues on personal income tax management policies at the local level; (2) Analyze and evaluate the current status of personal income tax management in Ho Chi Minh City from the perspective of economic development; (3) Solutions to improve the efficiency of personal income tax management for Ho Chi Minh City in the coming time 2.3 Research question: (1) What is the impact of information technology and trade liberalization in the process of international economic integration on the personal income tax policies of Ho Chi Minh City? (2) Based on what criteria to evaluate the management of personal income tax of Ho Chi Minh City? (3) The effectiveness of personal income tax management of Ho Chi Minh City in recent years has contributed to Ho Chi Minh City's budget in recent years? (4) What should be done to improve the efficiency of personal income tax management to avoid tax loss in Ho Chi Minh City in the near future? Research object and research scope 3.1 Research subjects: Researching theoretical and practical issues on improving the efficiency of personal income tax administration in the Ho Chi Minh city 3.2 Scope of research topic About the time: from 2009 to 2019 and propose solutions and recommendations until 2025, vision until 2030 About space: focus on research on personal income tax management in Ho Chi Minh City in the context of international economic integration The thesis uses data from other localities in the country as a basis for analysis Topics discussed and researched: Ho Chi Minh City Tax Department 4.Scientific and practical significance of the research topic Theoretically: The thesis completes the theoretical basis for the management of personal income tax at the local level In terms of practice: (1) The research results of the thesis will contribute to improving the efficiency of PIT management, contributing to increasing state budget revenue for the city Ho Chi Minh City and the whole country in the coming time; (2) The research results of the thesis can be used as references for research, teaching and learning Research Methods The thesis uses the following main research methods: synthesis method and systematic analysis combined with comparison, qualitative research method, investigation method, expert method and qualitative research method quantity (using international standard decimal notation) New points of the thesis (1) A systematic review of the research works related to the thesis topic at home and abroad on the management of personal income tax in order to point out the research gap and confirm the selected topic selected has no overlap with any previously published studies (2) Systematizing theoretical issues: building a scientific basis on personal income tax and factors affecting the management of personal income tax and evaluating the management of personal income tax This is an important contribution to the research topic and basic theoretical basis for further research (3) Establishing a practical basis: from the introduction of experience in the management of personal income tax of some countries and localities in Vietnam, some comments are made in order to draw lessons for the city HCM can refer (4) Focusing on analyzing the current situation of the city's PIT management Ho Chi Minh City helps readers visualize the whole picture of the city's tax industry in the period of 2009 - 2019 (5) Focusing on research on the effectiveness of the city's PIT management HCM aims to contribute a part to the selection in accordance with practical requirements and budget decentralization in Vietnam (6) On the basis of planning from the current situation of personal income tax management in Ho Chi Minh City to the degree of harmonization of the interests of taxpayers and personal income tax policy to determine the main reasons for Factors leading to the current situation of personal income tax management in Ho Chi Minh City and forecast development trends of all economic sectors in the coming time to propose solutions to improve management efficiency Personal income tax in Ho Chi Minh City until 2025 Structure of the thesis In addition to the introduction, conclusion, references and appendices, the content of the thesis structure has chapters as follows: Chapter 1: Overview of research on personal income tax management Chapter 2: Theoretical basis on personal income tax management and effectively improve personal income tax management in the provinces and city Chapter 3: Actual situation of effective personal income tax management in Ho Chi Minh City Chapter 4: Solutions to improve the efficiency of personal income tax management in Ho Chi Minh City in the period to 2025 CHAPTER 1: OVERVIEW OF RESEARCH ON PERSONAL INCOME TAX MANAGEMENT 1.1 Foreign research projects The thesis focuses on studying foreign research projects: Dulleck, U., Fooken, J., Newton, C., Ristl, A., Schaffner, M and Torgler, B (2016), with the theme “Tax compliance and psychic costs: Behavioral experimental evidence using a physiological marker”; Jimenez, P and Iyer, G.S (2016), with the theme “Tax compliance in a social setting: The influence of social norms, trust in government, and perceived fairness on taxpayer compliance” Castro, L and Scartascini, C (2015), with the theme “Tax compliance and enforcement in the pampas evidence from a field experiment”; Kamleitner, B., Korunka, C and Kirchler, E (2012), with the theme “Tax compliance of small business owners”; Wahl, I., Kastlunger, B and Kirchler, E (2010), with the theme “Trust in authorities and power to enforce tax compliance: An empirical analysis of the “slippery slope framework”; John Brondolo, Kyoshi Nakayama, Frank Bosch, Allan Foubister Judy Tomaso (2008), with the theme “Viet Nam implements personal income tax”; Kevin Holmes (2007), with topic “Personal income tax management”; Tax Affairs Committee of the OECD (2004), “Managing compliance risk: Managing and improving tax compliance”; Hugh J.Ault, Boston College Law School & Brian J.Arnold, Goodmans, LPP, Toroto (2004), “Comparative Imcome Taxation: A Structural Analysis; Bert Brys and Christopher Heady (2006), with the theme “Fundamental reform of Personal Income Tax in OECD Countries: trends and recent experiences”; Thanh Bình (2003), with the theme “Japan - 55 years of applying the self-declaration and payment mechanism”; Richard M.Bird Milka Casanegra de Jantscher (1992), with the theme “Improving Tax” Administration in Developing Countries” 1.2 Domestic research projects: Vu Thi Bich Quynh (2019), with the topic "Personal income tax management for Vietnamese people in Ho Chi Minh City" Ho Chi Minh City in the context of international economic integration”; Huynh Van Dien (2016), with the topic "Personal income tax law from practice in Can Tho City"; Nguyen Hoang (2013), with the topic "Improving State management of personal income tax in Vietnam"; Vu Van Cuong (2012), with the topic "Law on tax administration in the market economy in Vietnam - Theoretical and practical issues" Ly Phuong Duyen (2010), with the title "Personal income tax management in Vietnam in terms of international economic integration"; Phan Thi Hang Nga (2017), with the topic "Solutions to improve efficiency in personal income tax management in Vietnam"; World Bank (2011), “Reform of Personal Income Tax Administration in Vietnam – Towards a More Efficient and Fair System”; International Monetary Fund (2008), “Vietnam implements personal income tax”, group of economists of the International Monetary Fund; Nguyen Thi Thanh Thuy (2008), "Improving the Vietnamese income tax law in the process of international economic integration and the experience of some countries in the world" 1.3 Research gaps and theories 1.3.1 Thesis research gap Theoretically: The thesis analyzes the theoretical basis for effective personal income tax management, theoretical research model and analytical framework design In terms of practice: Through research and analysis of domestic and foreign works on personal income tax management, it shows that personal income tax management is very rich and diverse, mentioned in many other research works different, at different times and in different contexts, and there is no research on the theoretical basis of personal income tax management to apply to improve management efficiency Personal income tax for Ho Chi Minh City from the perspective of economic development On that basis, the PhD student inherits the results of domestic and foreign studies and applies theoretical models of development economics and appropriate theories to analyze the current situation of income tax management individuals in recent years to propose solutions to "Improve the efficiency of personal income tax management in the city Ho Chi Minh City” in the near future 1.3.2 Research theory The thesis uses two important theories, namely the theory of management science and the theory of development economy, as the foundation for thinking critically, analyzing, commenting, evaluating and proposing solutions Besides, the thesis also applies other theories such as: Theory of development economy; Theory of traditional tax administration; Theory of modern tax administration; Tax theory - exchange; Tax theory solidarity; Theory of perfecting the law CHAPTER 2: THEORETICAL BASIS ON PERSONAL INCOME TAX MANAGEMENT AND EFFECTIVELY IMPROVE PERSONAL INCOME TAX MANAGEMENT IN THE PROVINCES AND CITY 2.1 Personal income tax and personal income tax management 2.1.1 Personal income tax is a direct tax levied directly on an individual's income 2.1.1.1 Personal income tax features There are outstanding features: is a direct tax; individuals often have multiple sources of taxable income; enter the income of each individual; tools to regulate population's income to ensure social justice goals; directly on the income of each individual; progressive in nature 2.1.1.2 Contents of personal income tax (1) Taxpayers; (2) Taxable income; (3) Income is exempt from PIT; (4) Taxable income; (5) Expenses are deducted; (6) Family circumstances deduction; (7) Tax period; (8) PIT rate; (9) How to calculate personal income tax; (10) Declare, pay tax and withhold personal income tax; (11) Finalization of personal income tax; (12) Examination and inspection of personal income tax 2.1.1.3 Role, position of personal income tax Personal income tax plays a very important role and position in the tax system of each country, reflected in the following aspects: (1) Contributing a part of revenue to the state budget; (2) Contributing to the regulation of incomes among classes of the population; (3) Contributing to the management and control of social income; (4) Expanding revenue sources 2.1.2 Personal income tax management is an organized and oriented impact of tax authorities and tax officials on the subject of personal income tax management according to the contents and by methods and tools prescribed by law determined, in order to achieve the State's personal income tax management objectives determined by the State 2.1.2.1 Features of personal income tax management The goal is to make all personal income tax payers comply with regulations, ensure the effectiveness of personal income tax management activities with the most economical personal income tax management costs, fairness among taxpayers, openness, transparency, conformity and compliance with international standards and practices 2.1.2.2 Contents of personal income tax management (1) Tax administration of the tax authority is responsible for tax administration for taxpayers under its management according to regulations, such as: Tax registration, use of MST according to regulations; Tax declaration, tax calculation, tax payment, tax deduction, tax 11 markets To promote the strong advantages of a megacity to create breakthroughs so that the city has conditions for faster and more sustainable development On November 24, 2017, the National Assembly voted to approve Resolution No 54/2017/QH14 on piloting specific mechanisms and policies for the development of Ho Chi Minh City 3.1.2 Socio-economic situation During more than 35 years of renovation, Ho Chi Minh City's economic growth is quite and stable, averaging 10.7%/year, 1.6 times higher than the national average The economic structure always maintains a reasonable proportion, the service sector regularly holds the largest proportion in Gross regional domestic product, in 2020 is estimated at 62.13%, exceeding the set target of 56% - 58% industry - construction is estimated at 24.61% The growth rate of state budget revenue from the economic sector in the 2016-2020 period is 12.17%, higher than the growth rate of Gross regional domestic product The city's labor productivity is 2.7 times higher than the national average labor productivity, the city's labor resources are qualified among the highest income groups in the country Ho Chi Minh City actively promotes regional linkage activities in terms of goods supply and demand, traffic development, tourism, environmental protection, disease control, human resource training to serve economic development socio-economic conditions of the region, such as: signing a cooperation agreement to implement the highway project Moc Bai City (Tay Ninh) and with 13 provinces and cities in the Mekong Delta signed a tourism development cooperation program The stage 2020-2025 calendar period actively contributes to creating jobs for local workers in the region, reducing the pressure of working-age migrants to the city by creating favorable conditions for their businesses to Currently investing, contributing to the formation of many industrial parks in the provinces in the region 3.2 The basis of personal income tax revenue in Ho Chi Minh City 12 Ho Chi Minh City has the largest personal income tax revenue base in the country with a variety of taxable income types, both regular income and irregular income, focusing on business, services, tourism, e-commerce, capital transfer, real estate, inheritance, stocks, cultural and artistic activities In which, the proportion of individual business establishments in Ho Chi Minh City accounting for 9.07% of the whole country; employs more than 9.3% of the country's workforce; FDI enterprises account for nearly 30% of enterprises in the country In addition, PIT revenue from foreigners coming to work in the City 3.3 Actual situation of effective personal income tax management in Ho Chi Minh City 3.3.1 Tax administration status of tax authorities 3.3.1.1 Regulations on administrative procedures Strictly implementing the process of controlling tax administrative procedures as guided in Article 10, Article 11 of Circular No 05/2014/TT– BTC, dated January 6, 2014 of the Ministry of Finance 3.3.1.2 Tax administration apparatus The organizational apparatus consists of 22 functional rooms arranged in a vertical system from the city to the districts to perform the task of managing tax collection activities 3.3.1.3 Infrastructure, technology The tax branch of Ho Chi Minh City has full facilities and technical infrastructure to meet the requirements of personal income tax collection and management In addition, the Ho Chi Minh City Tax Department aims to build an electronic invoice system to optimize the management process, improve working efficiency, and save costs, marking a turning point in the development of the trend New direction of Ho Chi Minh City tax industry 3.3.2 Assessing taxpayer compliance 3.3.2.1 Tax information management of taxpayers in Ho Chi Minh City Under the responsibility of two levels, the City Tax Department and the District Tax Departments As of 2019, Ho Chi Minh City Tax Department manages more than 230,000 businesses and more than 488,000 individual business 13 households and millions of individual income tax payers; City Tax Departments manage more than 520 businesses and about 4,900 individual households, with large revenues of 150-200 billion/year 3.3.2.2 Actual situation of tax declaration, calculation, withholding and paying personal income tax in Ho Chi Minh City (1) Declare, calculate, withhold and pay tax on personal incomes from salaries and wages paid by agencies, organizations and individuals, achieving important results; The personal income tax revenue from salaries and wages next year always increases higher than the previous year's and nearly 75% of the total personal income tax revenue of the whole City (2) Declare, calculate and pay taxes for freelancers with positive results However, some writers and artists have not yet shown their selfdiscipline to the tax office to declare and fulfill the obligations of citizens to the State (3) Tax declaration, calculation, deduction and tax payment for business individuals all make annual tax declaration dossiers in accordance with regulations, helping to determine the flat tax rate smoothly and achieving results (4) Declaration, tax calculation, deduction and payment of taxes on other sources of income have not been given due consideration, together with a large volume of data, while the processing capacity is limited, there are not enough sources The effort to strengthen the inspection and regular inspection leads to a lot of revenue loss and low efficiency of personal income tax management 3.3.2.3 Actual situation of personal income tax finalization in Ho Chi Minh City The situation of loss of personal income tax collection in Ho Chi Minh City due to the failure to perform well the tax deduction responsibilities at agencies, administrative and non-business units located in Ho Chi Minh City is still relatively large 3.3.2.4 Actual situation of personal income tax inspection and inspection in Ho Chi Minh City 14 (1) Examination and inspection of personal income tax for residents earning income from salaries and wages paid by agencies, organizations and individuals is mainly carried out in conjunction with the inspector corporate income tax, there are few cases of organizing separate thematic inspection on personal income tax (2) Examination and inspection of personal income tax for selfemployed people has not been focused (3) Inspection and inspection of personal income tax for individuals earning income from business, individual business households is imposed on individuals earning income from business due to the implementation of the business contract mechanism tax collection and payment (4) Examination and inspection of personal income tax for individuals who are residents and have other types of taxable income, which is concerned by the tax department of Ho Chi Minh City Within 10 years, the number of files inspected and examined increased by more than 18 times, the amount of arrears for the state budget increased by times However, in the age of science and technology, many new business models appear, there are certainly many revenue sources that are still being abandoned, causing loss of state budget revenue 3.4 General assessment of the current situation of personal income tax management in Ho Chi Minh City 3.4.1 These achievements 3.4.1.1 Increase State budget revenue: In the period of 2009–2019, the actual situation of personal income tax management tasks of the Ho Chi Minh City Tax Department always met and exceeded the personal income tax collection estimate, making a great contribution to the total budget revenue in the city Ho Chi Minh City Personal income tax management in Ho Chi Minh City has achieved good results, gradually raising taxpayers' awareness of personal income tax During the research period, the city's total state budget revenue contributed on average over 16% to the country's total state budget revenue The proportion of personal income tax revenue in the total state budget revenue in each year and the growth rate of 15 personal income tax collection over the previous year over the past 10 years in Ho Chi Minh City has always been higher than average country 3.4.1.2 Effective personal income tax management in terms of cost and human resource use: Through comparative data between local tax departments of the General Department of Taxation in 2019, it can be seen that the cost to collect dong of personal income tax for the state budget is that of Ho Chi Minh City and the cost of income tax For the personal income tax management department compared to the total tax administration costs of the whole tax agency, Ho Chi Minh City has the lowest cost, but the amount of personal income tax is managed by one officer Personal income tax collected in year is over 1.17 billion VND However, Ho Chi Minh City has a higher number of personal income tax administrators compared to the total number of tax authorities than other localities and the satisfaction level of taxpayers with tax officials tax accounting for 70% compared to other localities is still low In general, the management of personal income tax in Ho Chi Minh City in terms of personal income tax administration costs is more effective than in other provinces 3.4.1.3 Effective personal income tax management in terms of compliance with tax administration laws (1) Regarding declaration and registration for tax identification numbers: Ho Chi Minh City strictly adheres to regulations on the use of tax codes compared to taxpayers who have been granted tax codes, reaching a very high rate of 99%, of which the number of taxpayers who strictly comply with regulations on the use of tax identification numbers compared to taxpayers who have been granted tax identification numbers is 89%; (2) Regarding tax declaration, calculation, tax deduction and payment of personal income tax: Ho Chi Minh City has a block of businesses and individual business households that comply with tax laws on declaration, tax calculation and withholding deduction and payment of personal income tax into the state budget accounts for 99%, higher than that of provinces and cities such as Hanoi, Da Nang, Dong Nai, and Can Tho The effectiveness of the penalty for late payment of personal income tax of the number of taxpayers who are fined for 16 late payment compared to the total number of taxpayers who have paid personal income tax, accounting for 4.6%, is times higher than that of Hanoi and Dong Nai, nearly times higher than Da Nang and Can Tho City This shows that the tax compliance awareness of these taxpayers is not high, they have not really voluntarily complied with the self-declaration and payment of personal income tax; (3) Regarding the inspection and examination of personal income tax: In general, the inspection of personal income tax on tax returns of business individuals and enterprises has been approved by the tax authorities in Vietnam Ho Chi Minh City makes relatively regular, periodic tax declarations However, the majority of cases of personal income tax fraud are discovered, provided or reported by taxpayers, not from the inspection, comparison and verification by tax authorities; (4) Regarding budget revenue: The state of Ho Chi Minh City's budget revenue is positive, especially budget revenue from personal income tax In the period of 2009–2019, Ho Chi Minh City had a total personal income tax revenue of over 232 trillion, of which the highest contribution to the state budget in 2019 was over 43 trillion, exceeding 105.5% revenue plan 3.4.2 Points that are still limited Compliance with the law on personal income tax management is still low among some taxpayers; The cost of personal income tax administration and the use of human resources in personal income tax management are low; Exploiting the potential of personal income tax revenue to increase Ho Chi Minh City's budget revenue has not been effective 3.4.3 Causes of shortcomings in the effectiveness of PIT management in Ho Chi Minh City 3.4.3.1 Subjective reasons: Not paying attention to the development of practical skills in digital economy; Tax administration according to the concept of mere collection has not fully promoted responsibility in revenue management and exploitation of revenue sources; the coordination between tax authorities and relevant branches is not close; equipment for tax administration has not yet met the requirements of tax administration in the 17 new situation; the level of application of modern technology in tax administration is still inadequate; slow in renovating tax administration methods towards non-traditional business activities; the inspection and inspection of personal income tax has not paid due attention; no measures to exploit e-commerce data, payment data to compare with personal income data to detect tax fraud cases; There is no mechanism for classifying taxpayers according to the principles of risk management and probabilities 3.4.3.2 Objective reasons: Regulations on family deduction levels in the Law on Personal Income Tax are equal in nature, applicable to all taxpayers across the country, affecting the lives and psychology of taxpayers; The provisions on the presumption mechanism in the Personal Income Tax Law lack flexibility, reduce the meaning of competition and fail to control the cost structure of production and business establishments; Personal income tax payers always have potential risks; The capacity of the Tax Advisory Council of communes and wards as well as the experience in tax administration of the tax authorities in Ho Chi Minh City is still limited 3.5 Evaluation of the effectiveness of personal income tax management in Ho Chi Minh City 3.5.1 Quantitative research sample design: Design a survey with 34 questions belonging to factors mentioned in the research model to conduct a survey of 350 observations by convenient method combined with norm method The results obtained were 308 observations that were eligible for quantitative analysis 3.5.2 Testing the research model: On the basis of analyzing the results of descriptive statistics, evaluating the reliability of the scale and adjusting the research model to analyze multiple linear regression to test the research hypotheses, quantify the impact of factors on the effectiveness of personal income management Through the study, it was found that the effectiveness of personal income tax management belongs to the dependent variable, after testing the 18 reliability of the scale, observed variables belonging to the scale for the concept were included in the EFA analysis and using the Extract Principal Component to perform EFA analysis for dependent variable As a result, we have the following regression equation: Effectiveness of personal income tax management = 0.055 + 0.137 Tax administration staff capacity + 0.087 Policy communication + 0.085 Personal perception + 0.437 Infrastructure, technology + 0.072 Tax law + 0.053 Photo Social benefits + 0.125 Coordinate with agencies and departments The factor of tax administrator's capacity is based on the results of factor regression with a standardized Beta coefficient of 0.187 and a Beta Sig test value of 0.000, showing that at 95% confidence level, we can conclude that capacity The force of tax administrators positively affects the efficiency of personal income tax management, which means that when we improve the capacity factor, the more active the tax administrators are, the more effective the tax administration will be At the 95% confidence level, when other factors are constant, if the capacity of tax administrators is increased by unit, the efficiency of personal income tax management will increase by 0.187 units The factor of tax policy propaganda, the factor regression results, have a standardized Beta coefficient of 0.110 and a Beta Sig test value of 0.007, showing that at 95% confidence level, we can conclude tax policy propaganda has a positive effect on the efficiency of personal income tax management, which means that when we improve the factor of tax policy propaganda, the more effective the tax administration efficiency will increase, at the 95% confidence level All other things being equal, if policy propaganda is increased by unit, the personal income tax management efficiency will increase by 0.110 units The factor of individual tax payer awareness based on the regression results of the factor has a standardized Beta coefficient of 0.105 and a Beta Sig test value of 0.019, showing that at 95% confidence level, we can 19 conclude that awareness Taxpayers have a positive influence on the effectiveness of personal income tax management, which means that when we improve the perception of individual taxpayers, the efficiency of tax administration will increase The infrastructure factor, the factor regression technique has a standardized Beta coefficient of 0.510 and a Beta Sig test value of 0.000, showing that at 95% confidence level, we can conclude the infrastructure Infrastructure and technology positively affect the efficiency of personal income tax management, which means that when we improve the infrastructure and technical factors, the efficiency of tax administration will increase, in terms of reliability 95% confidence level when other factors are constant, if infrastructure and technology are increased by unit, the efficiency of personal income tax management will increase by 0.510 units (the factor that has the strongest impact on efficiency) personal income tax administration) Tax law factor, the factor regression results have a standardized Beta coefficient of 0.087 and a Beta Sig test value of 0.035, showing that at 95% confidence level, we can conclude that tax legislation has a positive effect on the efficiency of personal income tax management, which means that when we improve the tax legislation, the efficiency of tax administration will increase Social influence factor results of factor regression have a standardized Beta coefficient of 0.077 and a Beta Sig test value of 0.046, showing that at 95% confidence level, we can conclude that social influence affects has a positive effect on personal income tax administration efficiency, which means that the more positive the social influence, the more effective the tax administration will be The agency coordination factor has a standardized Beta coefficient of 0.162 and a Beta Sig test value of 0.000, showing that at the 95% confidence level, we can conclude that the agency coordination has a 20 positive effect It has a positive effect on the efficiency of value added tax administration, which means that when we improve the coordination factor between agencies, the efficiency of tax administration will increase CHAPTER 4: SOLUTIONS TO IMPROVE THE EFFICIENCY OF PERSONAL INCOME MANAGEMENT IN HO CHI MINH CITY IN THE PERIOD OF 2021 - 2025 4.1 The context of socio-economic development in Ho Chi Minh City in the period of 2021 - 2025 and problems for PIT management 4.1.1 The context of socio-economic development in Ho Chi Minh City in the period of 2021 - 2025 The socio-economic situation of the City develops at a fast and modern pace Digital technology is widely applied and prevalent in all areas of life and has become the main means of all activities and the driving force of development The private and individual economy thrives, attracting and creating jobs for a large number of workers Many new and non-traditional business models were born and developed, bringing unprecedented high economic efficiency As a result, the population's income has also increased sharply, the middle class makes up the majority of the population There is also a larger gap between rich and poor A new color of the background in Ho Chi Minh City with more profound changes than before, will create great potential for revenue sources for the state budget, especially personal income tax 4.1.2 Issues facing personal income tax management in Ho Chi Minh City in the period of 2021 – 2025 Regarding revenue increase; The trend of official sector expansion; Regarding the trend of a cashless economy that is developing strongly in the context of the Industrial Revolution 4.0 and the outbreak of the Covid19 pandemic; Application of digital technology; E-commerce and digital economy 21 4.2 Proposed solutions to improve the efficiency of personal income tax management in Ho Chi Minh City in the period of 2021 2030: (1) Taxes, fees and charges are tools of the State, contributing to the management, regulation and stabilization of the macro-economy and restructuring of the economy; (2) Continue to improve the tax policy system to ensure consistency, transparency, clarity, understanding, ease of implementation, appropriate structure and expansion of the tax base to develop revenue sources; (3) Reviewing additional taxable objects to suit the nature of personal income tax according to international practices; (4) Tax administration institutions continue to improve to simplify administrative procedures and promote information technology application; (5) Building the organizational structure of tax authorities at all levels in a streamlined way to ensure effectiveness, efficiency, full authority and capacity to actively enforce tax laws; 6) Improve inspection and inspection capacity to approach good international practices; (7) Collecting tax debt properly and timely, reducing tax arrears and preventing loss of state budget revenue 4.3 Solutions to improve the efficiency of personal income tax management in Ho Chi Minh City in the period of 2021 – 2025 The thesis proposes groups of solutions: (1) Expanding the scope of personal income tax management both in terms of taxpayers and taxable income in order to control residential income, increase budget revenue and ensure fairness society; (2) Investing in infrastructure and technical development in combination with improving the quality of tax staff; (3) Implementing digitization in tax administration; (4) Risk management in tax administration 22 4.4 Some recommendations 4.4.1 Recommendations to the National Assembly (1) Modifying the family deduction level to suit the current income level in Vietnam and in line with the regulations of other countries, contributing to improving the efficiency of personal income tax administration in Ho Chi Minh City Bright The deduction for family circumstances must be calculated according to the adjusted rate for each area where the taxpayer is working, living and generating income in the year of personal income tax finalization (2) Supplementing regulations on personal income tax management for business individuals, in Article 10 of the current Personal Income Tax Law, specifically: “Personal income taxable income of individuals business is determined according to revenue less reasonable expenses related to the generation of taxable income from business in the tax period For a smallscale business individual who has not yet properly complied with the accounting, invoice and document regimes but cannot determine the revenue, expenses and taxable income, the competent tax authority shall determine the turnover , the rate of taxable income to determine taxable income in accordance with each production and business line, according to the provisions of the law on tax administration On that basis, the Government will detail and guide the implementation of personal income tax management for business individuals (3) Amendment of regulations on taxable revenue for business individuals: adjustment of non-tax revenue with turnover (business individuals) less than 132 million VND/year (11 million VND/person/month) corresponding to the reduction in family circumstances for incomes from salaries and wages according to the Law 4.4.2 Recommendations to the Government (1) Use tax management tools 23 (2) Instantly form a digital database 4.4.3 Recommendations to the Ministry of Finance (1) Digital enhancement of the tax industry; (2) Good support for the goal of modernizing tax administration agencies (3) Strengthening the propaganda and dissemination of tax law (4) Strengthening the coordination of activities among the Ministries 4.4.4 Recommendations to the General Department of Taxation (1) Regulations on personal income tax declaration and finalization (2) Pilot data connection with all e-commerce platforms CONCLUDE Income from personal income tax always accounts for a large proportion of the total budget revenue of the country in general and of Ho Chi Minh City in particular Effective personal income tax management has a great influence on budget revenue In the period 2009-2019, the actual situation of personal income tax management of Ho Chi Minh City always met and exceeded the estimate of personal income tax collection, making a great contribution to the total budget revenue in Ho Chi Minh City Chi Minh However, the city is a locality with a diverse, rich and very large source of revenue, but personal income tax revenue still accounts for a low proportion of total state budget revenue The reason is that the City's tax sector has not paid much attention to the development of practical skills in the digital economy, providing modern technological equipment for tax administration staff; the number of tax officials in wards and communes with modern technology application skills is still limited; Tax administration according to the concept of mere collection has not fully promoted responsibility in revenue management, fully exploiting revenue sources; slow in renovating tax administration methods towards non-traditional business activities; the coordination 24 between tax authorities and relevant branches is not close; not yet pay attention to the inspection and inspection of personal income tax; there is no mechanism to classify taxpayers according to the principles of risk management to check the probability; no measures to exploit e-commerce data, payment data to compare with personal income data to detect tax fraud cases In addition, the provisions in the Law on Personal Income Tax are flat, lack flexibility, reduce the meaning of competition and cannot control the cost structure of production and business establishments leading to loose management in the tax industry in general and loss of tax revenue, reducing revenue for the state budget Based on the analysis and assessment of the current situation, clarifying the limitations, the causes of the limitations, and surveying and evaluating the effectiveness of tax administration to propose groups of solutions to contribute to improving the efficiency of tax administration personal income in Ho Chi Minh City in the near future Thereby, recommendations to the National Assembly and the Government to help facilitate the implementation of the proposed solutions LIST OF PUBLICATIONS BY THE AUTHOR [1] Hoang Thi Ngoc Nghiem (2017), “The management of personal income tax in the city Ho Chi Minh City: current situation and solutions", Asia-Pacific Economic Review, No 508– 2017, P.18 [2] Hoang Thi Ngoc Nghiem (2018), “Personal income tax deduction in the Ho Chi Minh City", Economy and Forecast Journal, No 692–2018, P.75 [3] Hoang Thi Ngoc Nghiem (2018), “Risk management in PIT administration in Ho Chi Minh City”, Financial Journal, No 687–2018, P.87 ... support for the goal of modernizing tax administration agencies (3) Strengthening the propaganda and dissemination of tax law (4) Strengthening the coordination of activities among the Ministries 4.4.4... non-traditional models such as e-commerce, cross-border, online sales, agents, subscribers are big challenges for tax administration to prevent personal income tax fraud, personal income tax evasion in... physiological marker”; Jimenez, P and Iyer, G.S (2016), with the theme “Tax compliance in a social setting: The influence of social norms, trust in government, and perceived fairness on taxpayer compliance”