Individual Corruption

According to Transparency International's Global Corruption Barometer 2010, approximately one-fifth of households surveyed report to have paid a bribe to the tax revenue services in 2009.

Business Corruption

Corrupt tax officials present an obstacle to companies doing business in Vietnam. According to Global Integrity 2009, small and medium-sized companies are vulnerable to corrupt tax officials, and tax regulations are not always evenly enforced. Companies report that they have to pay facilitation payments in order to move a tax decision rapidly through the tax bureaucracy. There are also reports that payments are demanded to secure a rapid and true estimate of the taxes owed and that officials can be bribed so that they purposely understate a company's tax obligations.

Reportedly, there is a lack of internal supervision in tax administration. There is no system for penalising corrupt or disruptive tax official behaviour. According to the World Bank & IFC's Business Issues Bulletin 2007, 'as long as the amount of tax payable can be negotiated between the company and the tax official, there will be corruption and an unfair business environment'. In support of this comment, the USAID's Vietnam Provincial Competitiveness Index 2010 finds that a substantial percentage of companies operating in Vietnam feel that negotiating with tax officials is an essential part of doing business. Corruption in the sector is fuelled by the combination of tax officials with a high degree of discretion, taxation policies and procedures that are varying and ambiguous, and the number of tax regulations being too burdensome for SMEs to adequately manage. While companies report that the importance of negotiating with tax authorities as a part of doing business is decreasing, KPMG & the Economist Intelligence Unit's Open for Investment 2007 report that it is still crucial for companies to build good relations with tax authorities.

Political Corruption

According to Global Integrity 2009, corrupt tax officials are the major cause of losses in the tax collection system. The same source also reports that in small towns and remote areas, there is nearly no record keeping for tax collection.

According to a 2009 news article by VietnamNews Biz, between 2006 and 2009, a total of USD 647 million of missing taxes were detected, stemming from overdue tax debt, inappropriate tax levies, improper tax refunds and poor tax management.

Frequency

The World Bank & IFC: Doing Business 2012:
- A medium-sized company must make 32 separate tax payments per year that take 941 hours to complete, and manage a total tax rate of 40.1% of annual company profits.

USAID: Vietnam Provincial Competitiveness Index 2010:
- 41% of companies feel that negotiating with tax officials is an essential part of doing business in Vietnam.

Transparency International: Global Corruption Barometer 2010:
- Nearly 20% of households who had contact with tax revenue services throughout 2009 report to have paid a bribe.

The World Bank & IFC: Enterprise Surveys 2009:
- Over 33% of companies surveyed expect to give gifts in meetings with tax officials.

- Over 5% of companies identify tax administration as a major constraint to doing business.