Minister of Finance: continue to advise on promulgating fiscal policies to help economy recover and develop

VCN - According to Minister of Finance Ho Duc Phoc, although implementing policies to reduce and extend taxes and fees will impact budget revenue, the Ministry has reviewed, evaluated and continued to promulgate a number of fiscal policies to support people and businesses.
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Minister of Finance Ho Duc Phoc reported at the Conference. Photo: VGP
Minister of Finance Ho Duc Phoc reported at the Conference. Photo: VGP

Reduction in fees and charges reduces revenue by VND100 billion /year

Reporting at the regular Government Session in June 2024 and the Government's online conference with localities on July 6, Minister of Finance Ho Duc Phoc said that although in the first six months of 2024, the world’s situation has created many difficulties, but Vietnam's economy has showed an amazing recovery.

Sharing about the tasks of the Ministry of Finance, the Minister said that the Ministry of Finance has proactively advised and proposed the Government and the Prime Minister to promulgate fiscal policies, especially policies on exempting and extending the payment deadline of taxes, fees, and charges to help people and businesses overcome difficulties, stabilize production and business, and create conditions for the economy to recover and develop.

Specifically, the Ministry of Finance has submitted to the Government to promulgate policies to reduce and extend the payment deadline of taxes, fees, charges and land rents for businesses and people with a scale of about VND184.86 trillion (including reduced amount of tax, fees and charges is about VND92.3 trillion; deferred amount of tax and land rent is about VND92.56 trillion).

In particular, a 2% VAT reduction as applied in 2023 for a number of groups of goods and services subject to the 10% VAT rate from January 1, 2024 to ends June 30, 2024. This policy is expected to reduce state budget revenue in 2024 by about VND25 trillion.

Along with that, the Ministry of Finance has advised to promulgate a policy to continue reducing the VAT rate by 2% for some groups of goods and services that are applying the 10% VAT rate from July 1, 2024 until December 31, 2024. This policy is expected to reduce revenue in 2024 by about VND24 trillion.

The Ministry of Finance has also issued instructions on reducing environmental protection tax rates on gasoline, oil, and lubricants in 2024. This policy is expected to reduce revenue in 2024 by about VND42.5 trillion.

The Ministry also advised on the Decree on extending the deadline for paying VAT, corporate income tax (CIT), personal income tax (PIT) and land rent in 2024, with an expected amount of about VND84 trillion.

At the same time, the ministry advised to the Government to issue Decree No. 65/2024/ND-CP dated June 17, 2024 of the Government on extending the deadline for paying special consumption tax (SCT) for domestically assembled and manufactured cars, with an expected amount of about VND8.56 trillion.

The Ministry of Finance also issued Circular No. 63/2023/TT-BTC dated October 16, 2023 regulating the reduction of fees and charges from 10% to 50% to encourage the use of online public services (with effective from December 1, 2023 and applicable until the end of 2025). This policy is expected to reduce state budget revenue by about VND100 billion per year.

Recently, at the end of June, the Ministry of Finance issued Circular No. 43/2023/TT-BTC dated June 28, 2024 on reducing the collection rate from 10% to 50% of 36 fees and charges compared to the current regulations, applied from July 1, 2024 to December 31, 2024. It is expected that this policy will reduce state budget revenue in 2024 by about VND700 billion.

The Prime Minister and Deputy Prime Ministers attend the session. Photo: VGP
The Prime Minister and Deputy Prime Ministers attend the session. Photo: VGP

Reviewing to continue supporting people and businesses

For policies to extend the deadline for paying VAT, corporate income tax, personal income tax and land rent in 2024 and policies to extend the deadline for paying special consumption tax for domestically produced or assembled cars according to Decree 65/ 2024/ND-CP came to practice, Tax authorities at all levels promptly organized extensive dissemination on the policies to all taxpayers from the drafting of the Decree and guide the implementation when the Decree is officially launched.

According to the Minister, up to now, Tax authorities at all levels are still continuing to receive and update requests for extending the payment deadline of taxes and land rent for taxpayers.

Although implementing policies to deferring, reducing taxes and fees will impact budget revenue, Minister Ho Duc Phoc said that the Ministry has reviewed and evaluated the issued policies and based on practical performance, the Ministry continues to submit to competent authorities for promulgation of a number of fiscal policies to continue to support people and businesses.

Regarding the policy of reducing import and export taxes, the Ministry of Finance has submitted to the Government a draft Decree amending and supplementing a number of articles of Decree No. 26/2023/ND-CP dated May 31, 2023 on preferential export tariff schedule and special preferential import tariff schedule, List of goods and flat tax rates, mixed taxes, import taxes outside the tariff quota. It is expected that this adjustment of import tax policy will reduce revenue by nearly VND590 billion per year.

The Minister commented that, in the 2020-2023 period, financial policy solutions to remove difficulties for production and business will be issued with the total support of about VND700 trillion. The expected amount of solutions issued and implemented from the beginning of 2024 is about VND68 trillion.

According to the Minister, although the reduction in state budget revenue is related to the exemption, reduction, and support of taxes, fees, and charges, it does not affect this year's state budget balance.

In the first five months of the year, budget revenue reached 52.8% of the estimate, up 14.8% over the same period in 2023, while total budget expenditure reached 31% of the estimate, up only 0.5% over the same period of 2023. Therefore, the Minister said that in the second half of this year, if the budget decreases in revenue due to VAT reduction and policies on exemption and reduction of taxes, fees, charges, and land rents, and spending increases to accelerate public investment, the budget revenue-expenditure balance will be ensured and public debt and Government debt will be within safe limit.

By Huon Diu/ Huyen Trang

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