Domestic revenues for first 9 months of 2016 more than 75% of estimate

In 9-2016, the revenue collection reached 53.500 billion VND, by 113.2% ordinances over the same period. Photo: Thu Hang.

The amount of revenue is lower than previous years

According to a report of the General Department of Taxation, in September 2016, the amount of revenue managed by the Tax agency, reached 53.500 billion VND, 113.2% over the same period.

By the end of September, the total revenue collection by tax agencies gained 597.962 billion VND (excluding the sale of State’s shares for enterprises). This figure is 73.9% over the estimate.

There were 11 of 16 tax revenue had results which were acceptable; the others are related to land which were very high, many accounts finished the calculation in advance. Another 5 of 6 tax revenue were low which does not guarantee the implementation of calculation in advance for other sections such as the State enterprise sector, dividends and profits collection, charges & fees, etc.

According to the General Department of Taxation, the cause of this situation was due to the economic situation where there are still many difficulties and challenges, such as GDP growth slowed in the first 6 months of 2016. Investment efficiency is not high. Labour productivity grew slowly. The index of industrial production in 8 months increased by 6.9% (lower than the 9.8% growth in the same period in 2015). The total import-export turnover in the first 8 months of 2016 is lower than the same period last year.

Along with that, some companies have dissolved, gone bankrupt or suspended business activities. According to data from the General Statistics Office, the number of enterprises that suspended operation in the first 9 months of 2016 is 45,097 enterprises. Natural disasters such as cold weather in the northern mountainous damage, drought in central and Central Highlands, serious saltwater intrusion in the Mekong Delta; floods in coastal provinces and northern mountainous region, environmental pollution in the North Central Province, ... have all affected production, sales and revenues in a number of localities.

Notably, there have been a number of tax policies enacted to remove difficulties for businesses and taxpayers, but also reduce State budget revenues. For example: Continued implementation of Law No. 32/2013/QH13, Law No. 71/2014/QH13 reduced enterprise income tax by 7,500 billion VND. From 1-7-2016 implementation of Law No. 106/2016/QH13 also partly impacted State budget revenues in the last months, including policy changes to VAT refunds by deducting in the next period that lead to reduction of the amount of payable VAT in the domestic sector; reducing non-agricultural land tax due to exemption for households – an annual amount under 50,000 VND, 180 billion VND. Also, making adjustments to special consumption tax on cars leads to reducing revenue of 220 billion VND

Sticking to tax collection

According to the General Department of Taxation, to accomplete the mission in 2016 that the Government and the Ministry of Finance has allocated, striving to fulfill the targets for domestic revenue in 2016. Furthermore, in the last quarter of the year, the Tax agencies will work hard, accomplish tasks effectively and propose key measures in order to improve the business environment and enhance national competitive capacity for two years 2016-2017 as well as driven towards 2020 under Resolution No. 19-2016 / NQ CP via e-government. Also, providing services to declare and pay tax and VAT refunds through the Internet.

Besides, the General Department of Taxation will continue to closely monitor developments on the collection, and understanding the sources of revenue and the number of taxpayers in provinces; properly assess the impact causing increases, reduced revenues under each area, each field of collection, determine the remaining potential revenues, the field, and the type of tax losses to promptly propose solutions for efficient management.

The inspection and monitoring of tax declarations, focusing on examining declarations of incompatibility, where the business sector shows signs of insufficient tax declaration (restaurants, hotels, exploitation of natural resources, minerals) will be emphasized.

These last months of 2016, the General Tax Department will implement aggressive management of tax liabilities and tax enforcement. They require each local tax department to reorganize and review responsibilities from each level and each part of the tax agency in the management of debt recovery and enforcement of tax debts due to lack of full implementation in a timely manner, prescribed by law for debt management measures, enforcement of tax debts, not processed promptly false debt, or virtual debt.

In particular, the General Department of Taxation recommends local tax agencies to monitor closely movements of crude oil prices, the impact assessment following the oil price scenario, and promptly advise the Ministry of Finance in operating activities of State budget revenue.