Hanoi Tax Department seeking solutions to reduce budget loss caused by Covid-19

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Hanoi Tax Department collected VND 68,131 billion in the first quarter. Photo: TL

Director of Hanoi Tax Department Mai Son said that total budget revenue in the first two months of 2020 reached VND 49,984 billion (accounting for 19.2% of the estimate, up 7.5% compared to the same period last year). Of which, revenue from business and production was VND 27,812 billion, or 18.9% of the estimate, up 7% compared to same period last year; revenue from land-related revenues VND 3,654 billion, reached 15.5% of the estimate and up 51.4% compared to the same period last year. These revenues basically met the estimates thanks to good economic growth atthe end of 2019.

Based on the state revenue of the first two months, Hanoi Tax Department’s revenue was estimated at VND 68,131 billion, reaching 26.2% of the estimate, up 10.4% compared to the same period last year. Of which, revenue from the business and production sector was estimated at VND 36,278 billion, reaching 24.7% of the estimate and up 6.1% compared to the same period last year.

Assessing the impact of Covid-19 on state budget collection in 2020, Son said that by the end of February, Hanoi Tax Department managed 169,401 taxpayers as enterprises and economic organizations in operating. Due to regulations on restricting harmful effects of alcoholic beverages, as well as the Covid-19 epidemic, enterprises began to face difficulties.

On the basis of statistics of enterprises and large economic organizations that have made value-added tax declarations in January (the deadline for submission of declarations on February 20, 2020), the total turnover of goods and service sale decreases 6% over the same period last year, the arising value-added tax amount decreased by 10.5%.

Facing this situation, the Hanoi Tax Department has proposed four scenarios for the decline of state budget revenue in 2020.

Accordingly, under scenario 1, if the Covid-19 epidemic ends in the first quarter, domestic revenue excluding land-related revenues shall decrease 1.82-2.33%, or VND 4,200 - 5,400 billion.

Under scenario 2, if the epidemic ends in the second quarter, domestic revenue excluding land-related revenues shall decrease 2.85-4.06%,or VND 6,600-9,400 billion.

Under scenario 3, if the epidemic ends in the third quarter, domestic revenue excluding land-related revenues shall decrease 4.67-5.49% or VND 10,800-12,700 billion.

Under scenario 4, if the epidemic ends in the fourth quarter, domestic revenue excluding land-related revenues shall decrease 6.48-7.17% or VND 15,000-16,600billion.

To overcome the impacts of the Covid-19 epidemic on budget collection in 2020, Hanoi Tax Department has proposed some solutions, particularly, following the directions of the Government, the Prime Minister, the Ministry of Finance and the City in carrying out measures to remove difficulties and support taxpayers to cope with the impact of the Covid-19 epidemic; implementing administrative procedure reforms and electronic tax schemes.

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At the same time, Hanoi Tax Department will closely monitor the business and production situation, revenues, money flows, tax declaration and payment of taxpayers to remove difficulties and obstacles; strengthen inspection and examination against budget losses and control to prevent acts of abusing the Covid-19 epidemic and supportive policies to profiteer, causing state budget losses.