In 2020, tax sector was in a state of tension

The state budget revenue made by the tax agency by the end of December 24, 2020, reached VND1,215,294 billion, equal to 96.93% of the estimate. Photo: T.Linh

The rise and fall of collection

Looking back at the implementation of the revenue collection of the tax sector, it can be seen that 2020 was a difficult year, due to the Covid-19 pandemic and the floods affecting national economic development targets in the last months of the year. This has a strong impact on the revenue collection of the tax sector, especially in the second and third quarters.

In the second quarter, due to the implementation of social distancing, the budget revenue decreased 12% compared to the same period a year earlier. Entering the third quarter, although the economy showed signs of recovery (GDP in the third quarter increased by 2.62%), the budget revenue still decreased by about 7.2% compared to the same period in 2019. At the end of third quarter, estimated revenue in nine months was only 66.4% of the estimate. According to the General Department of Taxation, this is the lowest revenue in the past 10 years.

At that time, the General Department of Taxation was concerned that if the revenue did not improve, the fourth quarter budget revenue could not recover like economic growth in the past quarter, it is forecasted that the budget revenue in 2020 will face in large deficit compared to the estimate.

Moreover, along with the slow economic recovery in the last months of the year and many difficulties, the Government continues to consider expanding the target groups, extending the time, and raising the level of support for businesses and people, so the budget revenue in the last months of the year is very low, which will greatly affect the administration of the macro-economic balance in 2020 of the Government.

From those worries, the pressure on the entire tax sector is huge, from the central to local levels. There were consecutive meetings between the Ministry of Finance and the General Department of Taxation, as well as between the General Department of Taxation and local tax authorities, to find solutions to ensure revenue for the state budget. However, the taxation sector did not ignore the key point of budget collection and accompanying businesses to raise the budget revenue.

In the local directive documents, the General Department of Taxation always said that tax departments must continue to implement urgent solutions to support taxpayers affected by the Covid-19 pandemic, to remove difficulties for production and business, promoting disbursement of public investment, bringing policies to life, while gradually stabilizing and restoring production and business, ensuring financial resources to pay taxes on time and increasing contributions to the State budget.

In parallel with the goal of prompt and timely support for businesses and people entitled to tax, fee and land rental support packages in accordance with the policies and laws of the State and agencies, the tax sector has concentrated on revenue management, preventing revenue loss, exploiting to increase revenue for potential revenue sources, speeding up the implementation of budget revenue estimates in the last months of 2020.

Last minute good news

Thanks to the specific and timely solutions not only from the Ministry of Finance and the General Department of Taxation, with the guidance of the People's Committees and People's Councils of localities, by the end of the year, the domestic revenue also saw positive results.

According to the general report, the total state budget revenue made by the tax agency by the end of December 24, 2020 reached VND1,215,294 billion, equaling 96.93% of the estimate and an increase of VND112,000 billion compared to the Government report to the National Assembly as of June 2020.

In addition, 45 out of 63 provinces and cities have completed and exceeded the 2020 state budget revenue plan. These figures are proof of the tireless efforts of tax authorities across the country in completing the State budget collection task in 2020.

At the Hanoi Tax Department, though the revenue by the end of November only reached more than 83%, it was equal to 100.2% compared to the same period in 2019. According to Deputy Director of the Hanoi Tax Department Nguyen Tien Truong, after nearly a year of implementing revenue collection in the context of many difficulties and challenges, the lessons learned are the synchronous implementation of solutions, from focusing on nurturing revenue sources, drastically fighting tax loss and price shifting to strengthening coordination between tax agencies with departments, branches and localities in tax debt collection, checking the remaining sources of revenue, as well as the potential for exploitation such as revenue from land.

“For the capital tax sector, the biggest lessons learned are to improve the responsibility of leaders at all levels and each official and civil servant in charge; identify specific goals and targets for each task and attach the same responsibilities of each officer and civil servant," said Mr. Nguyen Tien Truong.

At the Tax Department of Nam Dinh, by December 2020, this unit collected 95% of the ordinance estimate, an increase of 7% compared to the same period in 2019.

Mr. Vu Dinh Hong, Director of Nam Dinh Tax Department, said that along with strengthening the management and timely collection of taxes into the state budget, the Tax Department organized propaganda on the contents of the Government's policies to support people and businesses to overcome difficulties caused by the Covid-19 pandemic.

In particular, by the end of the year, according to Mr. Vu Dinh Hong, in addition to implementing urgent solutions to support taxpayers affected by the Covid-19 pandemic, every day, the Department also closely followed the assigned tasks to gather forces to manage the collection, combat tax loss and recover tax debts; direct budget collection in detail to each collection area, revenue source, tax identity; especially assigning tasks and responsibilities to each tax leader and civil servant in performing their duties.

Although 2020 is a year full of difficulties for the tax sector, since the beginning of December, many tax departments have reported good news in budget revenue, including Dong Nai Tax Department and Yen Bai Tax Department or Kien Giang Department of Taxation. These three units were estimated to exceed their estimates by 13%, 9% and 2.7%, respectively.

The taxation sector across the country is still monitoring revenue poured into the state budget. Whether or not to complete the task, it must be affirmed that the Tax Department has done its job very well and this will be a favorable premise for the entire tax sector to be able to fulfill the State budget collection task in 2021.