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Operations at Lai Chau Tax Department. Photo: TL

A shortfall due to objective causes

In addition to localities meeting the collection progress, there are still seven localities which are behind the progress set out, including Son La, Lai Chau, Hoa Binh, Quang Nam, Quang Ngai, Binh Phuoc and Hau Giang.

Checking Lai Chau Tax Department, in 2019, the Department was assigned the revenue target of VND2,110.5 billion by the provincial people’s council. As a northern poor province, this target is quite high, requiring efforts of the tax agencies in the province in each task to ensure it is met.

Explaining the causes for failure to meet the collection progress, Nguyen Manh Chien, Deputy Director of Lai Chau Tax Department in Lai Chau province said that in 2019, the revenue from hydroelectricity decreaseddue to the fact that hydroelectricity had one month off for maintenance of machinery. Along with that, less rainfallreduced yields. Up to now, the revenue from hydroelectricity has only reached 68.5 percent over the same period last year. According to the leaders of Lai Chau Tax Department, it is estimated that by December 2019, this revenue will reach VND1,089 billion, reaching 106 percent of the target assigned by Central Government, but only 93.9 percentby the province and 89, 7 percent over the same period last year. Thus, this year, revenue from hydroelectricity will see a deficit of VND100 billion.

Nguyen Manh Chien said that another cause for the decline in the revenue of Lai Chau Tax Department was due to the sharp reduction inrevenue from land use, this was because the real estate market suffered a slowdown Compared to the same period last year, the revenue only reached 69.8 percent. In addition, the revenue frominfrastructure feesof this unit also decreased compared to the same period last year due to the reduction of fees from the use of infrastructure works, service works and public utilities in the border gate area because some goods are not cleared by China’s barriers at openings at border areas.

At Son La Tax Department, by the end of October 2019, the Department collected VND3,088 billion, amounting to 76 percent of the target assigned by the Ministry of Finance and only 67 percent by the provincial People's Council. Of which, the revenue from taxes and fees was only VND2,800 billion.

Speaking to reporters,Dang Quang Hung, Deputy Director of the Son La Tax Department, said that Son La's budget revenue greatly depended on hydroelectricity. The revenue from hydropower plants accounted for alarge proportion(estimated at VND 2,400 billion in 2019), while this year's hydrological map is very poor, the amount of water is not sufficient, resulting in low generating capacity, making a reduction in revenue, including Value Added Tax and Natural Resource Tax. With this revenue, if there is a deficit, there will be no source to offset it. In addition, in Son La, the revenue from petroleum is estimatedwell. But there is only one petroleum trading enterprise in the province, therefore, there is no guarantee for the revenue.

“In 2019, the business individuals in the province is not as favorable as last year, resulting in a shortfall of about VND 350 - 400 billion. Moreover, revenue from land use was low, the real estate market in the province was not as vibrant as last year. Although People's Councils at all levels have very closely reviewed the land fund and organized auctions, the demand of the market this year was not significant, so far only VND290 billion has beencollected, while in the same period in 2018, it was VND 700 billion,” Dang Quang Hung said.

Another locality which also saw a decline in revenue due to the insufficient revenue from hydroelectricity is Hoa Binh. According to the Hoa Binh Tax Department, two factors impacting its revenue are those from Hoa Binh Hydroelectric Plant and environmental protection tax on petroleum. This year, revenues from these two items are declining. Specifically, the electricity output of the whole year of Hoa Binh Hydropower Company only reached about 8.7 billion kWh, a loss of about 3.4 billion kWh, equivalent to a loss of about VND340 billion compared to the estimate. If adding the shortfall of VND 110 billion from the Environmental Protection tax on petroleum, these two revenues would see a shortfall of VND 450 billion.

Collecting debt to offset deficit

According to the General Department of Taxation's calculations, in order for 63 of 63 localities to complete the target, the task of state budget collection in the last two months of 2019, the tax sector must collect a minimum of VND 204,500 billion, of which, domestic revenue will be about VND 202,300 billion. Thus, on average, the entire tax system must collect at least VND 3,400 billion to meet the State budget revenue target in 2019.

To complete the collection task in 2019, the director of the General Department of Taxation has asked key tax departments to strengthen human resources, speed up the inspection and urge the timely payment of arrears to the State Budget; direct the collection of outstanding tax debts at the assigned tasks. In particular, for some tax departments with revenues failing to reach the progress, or with tax debts higher than the national average, the leaders of the General Department of Taxation requested these tax departments take drastic measures to combat loss of state budget revenue, reduce outstanding debts according to the targets set by the General Department of Taxation.

Deputy Director of Son La Tax Department, Dang Quang Hung said from now until the end of the year, the unit will focus on debt collectionto offset the deficit; exploiting revenues from land as well as other revenues to fulfill the estimates. Son La Tax Department has also established a working group to combat loss of state budget revenue to review all revenues in the area; mobilize all revenues, including other revenues from taxes, fees before December 31, 2019.

Also at Lai Chau Tax Department, Nguyen Manh Chien said that from now until the end of the year, the unit will focus on debt collection, especially for large debts in the area. “The unit will carry out drastically and fully the debt handling steps. However, the unit will also encourage and remove difficulties for businesses to improve their awareness of tax law compliance” Chien said.

In order for the tax debt collection work to achieve high results, the leaders of these department said that they will assign the task of tax debt collection to each unit and each official. Every day and every month, the tax departments will closely monitor the performance progress of each official to urge, remind and adjust the tax debt collection plan in a timely manner to fulfill the tax debt collection task and avoid arising new debts, contributing to increasing revenues for the state budget; attach the responsibility of tax debt collection to each unit according to the responsibility of the head and each tax official.

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Notably, units with low revenue in the past ten months also confirmed that they will step up inspection to combat budget loss. At the same time, the Tax Branches will be assigned to closely coordinate with the People's Committee of communes, wards and townships and authorized collection units in providing a list of tax debtors to require business households and individuals to pay to the State Budget. Leaders of the tax departments all affirmed that, despite many difficulties, it is certain that by the end of 2019, the units will fulfill the assigned estimates.