Positive changes in revenue structure of tax sector

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	Long-lasting difficulties in budget collection of tax sector

Vice Chairman of the National Assembly Phung Quoc Hien and a delegation of the National Assembly met with the General Department of Taxation.

Leaders of the General Department of Taxation reported this issue to the Party Central Committee, Vice Chairman of the National Assembly Phung Quoc Hien and a National Assembly delegation at the working session with the new General Department of Taxation on September 8.

Revenue structure of tax sector shifts towards a more sustainable direction

At the working session, Director General Cao Anh Tuan said the State budget revenue for 2016-2019 reached VND 5,384 trillion, 77.3% of the target for 2016-2019. The State budget revenue in 2019 increased 1.55 times compared to 2015, of which tax revenue jumped 1.56 times; revenues of most localities increased rapidly year by year. The growth rate of State revenue for 2016-2019 averaged 11.6%/year, of which tax revenue increased 11.8%/year.

The revenue structure for 2016-2019 continued to change towards a more sustainable direction compared to 2011-2015. Domestic revenue accounted for about 80.9% of total State budget revenue, while budget revenue gradually reduced the dependence on revenue from crude oil and import-export activities.

However, according to the leader of the General Department of Vietnam Customs, in the first eight months of 2020, revenue collection faced many difficulties, total tax revenue is estimated at VND 752,615 billion, 60% compared to the estimate and 91.9% compared to the same period in 2019.

“The cause of this situation is that the economy in the first months of the year was hit hard by the Covid-19 pandemic, production and business activities of many enterprises dropped compared to the same period in 2019. Along with that, the deployment of support packages, extension of the deadline for tax and land rent fee payments for businesses and people has caused the sharp decrease in the State revenue,” Tuan said.

According to the General Department of Taxation, total State revenue for 2016-2020 is estimated at VND 6,707,055 billion, 103.7% of the estimate and increases by 1.61 times for the previous period. The rate of State budget mobilisation averaged 24.4% of GDP, reaching the National Assembly's target of 23.5% of GDP.

Regarding implementation of the reform strategy 2011-2020, Director General Cao Anh Tuan said the General Department of Taxation - the Ministry of Finance has studied and reported to the Government to submit to the National Assembly for amendments and supplements to taxes, fees and charges to be consistent with the target. The tax sector’s reform efforts have been recognised and appreciated by domestic and foreign organisations.

Average mobilised State budget revenue will not be lower than 25% of GDP in the next five years

At the working session, Vice Chairman of the National Assembly Phung Quoc Hien said he highly appreciated the tax sector’s efforts in administrative reform and determination to perform revenue collection in the past five years. The General Department has advised competent authorities to amend taxes, ensuring comprehensive revenue. Tax authorities at all levels have reformed administrative procedures, creating favourable conditions in revenue collection. In addition, changing the apparatus restructuring in a more effective and efficient manner. The fight against tax loss and policy development is more and more perfected. State budget revenue structure of tax sector has shifted towards a more sustainable direction with a gradual increase in the proportion of domestic revenue, ensuring recurrent expenditures, debt repayment, and part of investment spending on development.

However, Vice Chairman of the National Assembly Phung Quoc Hien said there are still shortcomings in tax administration policies, such as tax neutrality not being guaranteed, tax policy has too much burden on social security, tax debts are still high; some revenues from production and business have not yet completed the assigned estimate and sometimes the handling problems for taxpayers have not been implemented promptly.

In the near future, the economy will suffer from difficulties that will affect the State revenue collection while demand for spending on development investment, salary and demand stimulus will increase. Therefore, Vice Chairman of the National Assembly Phung Quoc Hien set a goal in the next five years, the average rate of mobilised State budget revenue will not be lower than 25% of GDP, the average rate of mobilised tax and fee revenue will not be lower than 21% of GDP, tax debt will be controlled at less than 4% of GDP and the public debt will be below 60% of GDP.

To achieve these goals, the tax sector should continue to reform, increase use of information technology and enhance the satisfaction of taxpayers. In addition, the tax sector should promote tax inspections based on risk, reducing the quantity but increasing the quality of each inspection.

Vice Chairman of the National Assembly Phung Quoc Hien also emphasised that in the tax system reform strategy for the next 10 years, the tax sector should bild a modern, effective and efficient tax administration apparatus, meeting the requirements of integration.