Collecting revenue between state treasury and commercial bank: Bring benefits to 3 parties

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Vietcombank Phu Tho cooperates with Phu Tho State Treasury in 2017. Photo: ThuyLinh.

Revenues through banks account for the majority of budget revenues

According to the State Treasury, closely following State budget revenue estimates, the State Treasury of the provinces and cities has actively coordinated closely with the collection agencies in the locality to calculate quickly, fully and accurately the amounts of collection for budget levels. Statistics of the State Treasury show that as of the end of June 30, the cumulative State budget revenue in balancing reached 743,430 billion VND (equal to 52.68 percent of the yearly estimate).

To get this result, in the first six months of 2019, the State Treasury of provinces and cities worked with the collection agencies in the locality to focus quickly, fully and accurately account the revenues for budget levels; providing data on regular and continuous budget collection for authorities to serve the management of budget collection at all levels.

According to the State Treasury, the work was quick, full and timely thanks to the effective and efficient coordination of the State Treasury with commercial banks. By this time, the State Treasury continued to expand the collection account at five State-owned commercial banks (Vietcombank, VietinBank, BIDV, Agribank and MB) to enhance the coordination of collection and delegation of State budget collection by cash, contributing to focusing quickly on revenue and payment for timely payment to the State budget; at the same time, it helps taxpayers ensure safety and efficiency in managing the State budget and minimise the use of cash in transactions with the State Treasury. As of June 24, the number of specialised accounts of State Treasury units was 1,163 (of which the provincial State Treasury was 264 accounts and the State Treasury was 899 accounts).

Phu Tho State Treasuryis one of the typical units doing collection work well. According to Tran Manh Hung, Director of Phu Tho State Treasury, the coordination of State budget collection between the State Treasury - collecting agencies - commercial banks has been implemented since June 2010. At this time, Phu Tho State Treasury only signed an agreement to collect revenue with 12 commercial banks of VietinBank and Agribank system. By June, the unit signed an agreement to collect revenue with 30 commercial banks in the province at five banking systems (VietinBank, Agribank, Vietcombank, MB and BIDV). According to statistics of Phu Tho State Treasury, the first six months of 2019, the State budget revenue in Phu Tho is 3,076 billion VND (with 76,135 items). In which, the amount collected through commercial banks was 2,337 billion VND (with 70,558 items), reaching 76 percent of the total State budget revenue (in 2018 this revenue was only 63 percent).

"Coordination of State budget collection has brought encouraging results, contributing positively to the renewal of mechanisms and policies and professional processes in the management of state budget funds in the direction of simplicity, modernity, publicity, transparency and in accordance with international practices," said Tran Manh Hung.

Also according to Phu Tho State Treasury, the expansion of the State budget collection mandate has also been gradually improved from the State Treasury only to authorise the collection of taxes, fees and charges so far mandated to collect administrative violations for the commercial banks.

Benefits for three parties

As one of the commercial banks that cooperated with Phu Tho State Treasury effectively during the past time, Vietcombank Phu Tho made an important contribution to help the province fulfill the task of state budget collection. According to Van TienThanh, Director of VietcombankPhu Tho, this bank started signing a collection agreement with Phu Tho State Treasury from July 2017. According to statistics, from July 2017 to December 2017, the budget revenue through Vietcombank Phu Tho is over 178 billion VND. Entering 2018, the revenue has increased to 695 billionVND. In the first six months of 2019, the amount collected through this bank has reached 488 billion VND.

"Collection coordination has brought important effects. Firstly, it is convenient for taxpayers - customers, especially customers with large transactions. Taxpayers have more choices about the location of payment and the time of payment. The second advantage is that the cash flow from the bank to the State Treasury is always quick, for example, with import and export taxes, the fast flow of tax from customers to State Treasury helps goods get through quickly," said Van Tien Thanh.

Also according to Vietcombank Phu Tho's Director, on the bank side, effective collection coordination besides bringing benefits to the bank itself thanks to the continuous money flow, the bank will also have more customers coming to do transactions, thereby helping to promote the brand.

On collection coordination, Tran Manh Hung said thanks to coordination, the parties have increased connection and information exchange. It is the data collected between the State Treasury, collecting agencies (Taxes, Customs) and unified commercial banks, contributing to the development and diversification of modern tax payment methods, simplification and minimisation of procedures time to pay money to the payers.

At the same time, this collection has effectively applied information technology to the collection management process, ensured the data collection and accounted for the State budget revenue is timely and accurate.

"Moreover, the collection of revenue also creates favourable conditions for organisations and individuals to fulfill their tax obligations with the state with many locations to choose to pay taxes, minimise the time to pay and reduce procedures. Difficulties due to travel, saving time and cost in fulfilling tax obligations, in particular, the collection of coordination has increased the proportion of non-cash payments gradually over the years in accordance with the objectives set by the Government," Director of State Treasury Phu Tho affirmed.

To implement the development strategy of the State Treasury until 2020 to form an electronic treasury, in the coming time, the collection mission will continue to be expanded nationwide to facilitate taxpayers' best interests and towards administrative reform, modernisation of State budget management for the entire State Treasury system.