HCM City: Many tax types suffered slow growth in three years

Revenue collection of HCM City Tax Department had already reached over 50 percent. Photo: T.H

According to Ho Chi Minh City Tax Department, in the first seven months of 2019, many tax types contributing to the main revenue for the budget have increased over the same period, but the growth rate had been the lowest in the last three years. In particular, corporate income tax increased by 8.02 percent over the same period and was the highest rate of revenue collection among three main types of revenue.

However, this was the lowest growth rate in the last three years of this type (in the first seven months of 2018 increasing by 16.69 percent compared to the same period in 2017; the first seven months in 2017 increasing by 17.37 percent compared to the same period in 2016) because some key enterprises have made low amounts of payments or no payments.

According to statistics, most enterprises making large amounts of payments reach low corporate income tax payment in the seven months.

The value-added tax (VAT) increased 7.93 percent over the same period and is the type of income enterprises pay in each region reach an increase compared to the same period. Special consumption tax for the first seven months of 2019 increased by 3.1 percent over the same period which mainly focused on enterprises in production and trading activities of items such as beer, wine and cigarettes (revenue collection of these items accounting for 77.95 percent of the total excise tax in the first seven months of the year) and at the same time the special consumption tax for cigarettes also increased.

Personal income tax increased by 11.83 percent over the same period, the growth was mainly due to the increase in personal income tax collecting from wages and salaries, which was also the highest proportion of total revenue collection of personal income tax (accounting for 80.26 percent).

According to Ho Chi Minh City Tax Department, although personal income tax has had a slight increase of growth rate over the same period, this is the lowest growth rate in the last three years (the first seven months of 2018 increasing by 23.58 percent compared to the same period of 2017, the first seven months of 2017 increasing by 20.41 percent compared to the same period of 2016) due to the reduction of pesonal income tax collecting from real estate by 18.52 percent compared to the same period of the previous year, if excluding the reduction from real estate, the personal income tax increased by 15.46 percent over the same period.

Besides that, many revenues fell sharply over the same period. Specifically, revenue from land use fees decreased by 52.43 percent over the same period. The reason was that, last year, many new real estate projects began, leading to the collection from land use fees reaching a quite good result in 2018.

According to Ho Chi Minh City Tax Department, low growth rate of major tax types is affecting the revenue of the State budget. In the seven months of 2019, total domestic revenue reached 162,684 billionVND, achieving 56.04 percent of the current appropriation in 2019, increasing by 1.57 percent over the same period of 2018.