Minister Dinh Tien Dung: Need for sharing and consensus in the development of financial policy

Minister Dinh Tien Dung spoke at the meeting.

2 causes of central budget difficulties

Minister Dinh Tien Dung said that in the previous years, the central budget accounted for 60-65% of the total budget revenue. In the period 2011-2016, there were 13 localities regulating the Central government. In the period of 2017-2020, there were 16 localities regulating the central government (3 provinces of Quang Nam, Hung Yen and Hai Duong).

Ministry of Finance assessed that in recent years, the central bank has had difficulties arising from two main causes: they are crude oil and import tax. Crude oil in the previous period accounted for 27-30% of total of budget revenue. In the last period, crude oil price was volatile, along with no increase in volume. The peak was $ 110 a barrel, but in 2016 it began to fluctuate and went down to $ 44 per barrel, sometimes $ 33 per barrel, while the estimate was $ 60 per barrel. Crude oil prices had fallen nearly $ 16 per barrel compared with $ 50 a barrel in the 2014-2015 periods, with oil prices falling sharply, accounting for about 27%. 2017 crude oil had an estimated revenue of 3.5%. Along with that, the import tax – the revenue of central regulation is 100% reduction again. Participation in Free Trade Agreements (FTAs) leads to continuous tariff reductions, especially in the period of 2017-2018 with deep tariff reductions. Although the import and export tax was considered to be even higher than the estimate, the absolute figure did not increase, which means that the proportion declined.

Facing this situation, the Government undertook a step of restructuring the budget in the spirit of Party Congress XII and Resolution 07 / NQ-TU of the Politburo. Domestic revenue has increased by more than 80% of total revenue. The role of the Central government is over 56% (from 65% down to 56%), according to Minister Dinh Tien Dung, "there are many inadequacies". Meanwhile, Vietnam's corporate income tax (EIT) is currently around 20% with more incentives for goods, products, sectors and geographical areas. Corporate income tax over the past few years was only 15%, not up to 20%. Only the foreign investment sector is more than 10%.

"We apply incentives for large projects, regions ... foreign investment companies take advantage of them, but with domestic enterprises it is difficult. These are issues affecting the central budget. This is a fact, we have come here to review, "- said the Minister of Finance.

According to Minister Dinh Tien Dung, the Ministry of Finance has studied one law to amend the six laws. The Prime Minister has basically agreed, and because there are many complicated laws, the Ministry will split them into two Laws, such as the Law on VAT, CIT and SST. However, the head of Finance also shared the "heart" of policy makers. He said that the new policy has been implemented but, it is very difficult carry out, especially in advocacy and propaganda. For example, the Law on Property Tax stated in the Resolution of the Central Committee of the 11th Party, the Tax of Reform Strategy 2011-2015 and most recently in Resolution No. 07 of the Politburo, Resolution 25 of the National Assembly requires a solution to research property tax. Although opinions are only available, opinions should be commented on; the Ministry undertook the adjustment, then consulted and submitted to the Ministry of Justice for appraisal, then submitted to the Government, the Government approved and submitted to the National Assembly to add to the law-building program...

According to Minister Dinh Tien Dung, if the bill is implemented, it will be for the next term. In the process of building law, at the same time, public opinions are received; the drafting agency will listen and receive explanations. During the process of policy development, it is necessary to agree, share and contribute ideas to the drafting agencies to implement the guidelines and resolutions well for the Party, the National Assembly and the Government.

The recoverable taxable debt is decreasing

The status of taxpayers declaring lack of turnover and determining wrong costs are stated by the Economic Commission of the National Assembly, which leads to wrong calculations of VAT, CIT, and affects the remaining profit to the budget. Dung affirmed this problem must be looked at more accurately.

At present, the finance sector is implementing the mechanism of transfer from pre-check to post-check. Tax is self-calculated, self-declaration, self-pay and the sole responsibility of enterprises, then the tax office post-checks. Customs is similar, customs clearance and then check later. Inspection later is too drastic.

Minister of Statistics, especially the inspection and examination after tax, in 2016 treatment of tax and fees increased over 12,000 billion VND, and increased revenue in 2017 was 19,000 billion VND. Post-inspection can see the consciousness of taxpayers, and management agencies also need to add solutions to do better, a stronger hand to handle.

Another point that the Ministry of Justice said is not reasonable in the verification report is the tax debt in 2017 of 73,000 billion VND. Although it was lower than 2016, it was still large, accounting for 7.6% of domestic revenue and this needs to be clearly and responsibly addressed.

According to the Ministry of Finance, the finance sector has been doing this issue very drastically. At present, the tax debt is capable of collecting less than 5% of the total of revenue; the remaining tax it is not able to collect. One problem is the delayed penalty mechanism of 0.3% per day, multiplied by the amount of tax debt plus 5,600 billion VND more.

"We have a project submitted to Congress to remove the debt of a bankrupted company, or missing from headquarters, ... The Government has also directed to amend the Law on Tax Management, and the Ministry of Finance is in progress," the Minister said.