Some solutions to combat tax base erosion in Vietnam

Abstract

Tax base erosion poses a significant challenge to tax collection and financial stability in Vietnam. This study explores potential solutions to address tax base erosion in Vietnam today. The study employs analytical and comparative methodologies to evaluate the current state of tax base erosion in Vietnam and propose viable solutions. Firstly, it is imperative to enhance the effectiveness of tax management by adopting advanced technology and comprehensive workforce training. Furthermore, implementing stringent regulations on transfer pricing and deploying measures to deter tax avoidance can mitigate profit shifting and tax evasion perpetrated by multinational corporations. International collaboration also holds a pivotal role, involving the ratification of tax treaties and active engagement in global initiatives such as the OECD’s BEPS framework. Lastly, fostering a competitive business environment and promoting economic diversification can reduce dependence on industries susceptible to tax erosion. The Vietnamese government can effectively counter tax base erosion by integrating these measures, safeguarding fiscal stability, and fostering socio-economic progress.