Sustainable budgets and challenges for revenue collection in 2020

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Budget revenue from production and business is still important revenue. Photo: Thuy Linh.

May exceed 5 percent of estimate

Statistics of the Ministry of Finance show that the total State budget revenue in 10 months is estimated at 1,253.16 trillion Dong. Thus, the State budget revenue was at 90 percent of the estimate when only there are 1.5 months to the New Year. Of which: Domestic revenue was estimated at 1,016.7 trillion Dong, 86.6 percent of the estimate, up 10.9 percent over the same period in 2018. In October, domestic revenue increased by 57.7 trillion Dong against September, mainly due to the time businesses declare and pay allowable taxes to be collected quarterly.

By the end of October, there were 7 out of 12 revenue and revenue groups well compared to the estimate and higher than the average revenue (86.6 percent of the estimate) such as revenue from houses and land (117 percent of the estimate). , revenue from construction lottery activities (98.5 percent of the estimate), collection of granting rights to exploit minerals, water resources (139.4 percent of the estimate), ; 5/12 revenues are lower than the average level, including three direct revenues from production - business activities, accounting for nearly 54 percent of domestic revenue (from State-owned enterprises reached 78.7 percent of the estimate, up 9 percent; revenue from foreign-invested enterprises reached 82.3 percent of the estimate, up 13.5 percent over the same period; revenue from non-State economic sector reached 82.8 percent of estimates, up 12.7 percent over the same period in 2018); Particularly, the Environmental Protection tax only reached 72.3 percent of the estimate, mainly due to the volume of gasoline and oil consumption not reach the expected (reached 68.2 percent of the plan, down 1.9 percent over the same period). It is estimated that 55/63 localities in the country collect inland reaching the estimation progress (over 82 percent), of which 47 localities collect over 85 percent of the estimate; Compared to the estimate for the same period of 2018, there were 56 localities with higher revenues and 7 localities with lower revenues: Lai Chau, Son La, Hoa Binh, Quang Nam, Quang Ngai, Binh Phuoc and Hau Giang.

Revenue from crude oil was estimated at nearly 50 trillion VND on the monthly payment of oil output of about 950 thousand tonnes, the price of oil paid about USD 66.5 per barrel, an increase of USD 1.5 per barrel compared to the estimated price.

Revenue from import and export activities in the first 10 months of 2019 was estimated at 289.95 trillion VND. Customs authorities conducted about 2,809 post-clearance inspections, handling approximately 1,555 billion VND revenue into the State budget; collecting and handling about 680 billion VND of outstanding import and export tax.

In the report on the State budget in 2019 to the National Assembly at the 8th session, the Government expects this year's budget revenue will exceed 3.3 percent of the estimate, Minister of Finance Dinh Tien Dung confirmed the number may exceed 5 percent. The good news is that 2019 will undoubtedly be the fourthg consecutive year the central budget's revenue is exceeded with an estimated figure of 8-11 trillion VND. In addition, revenue from production and business activities is still an important and core revenue, accounting for approximately 40 percent of total revenue while land use levies in 2020 will only account for 6 percent and revenue of exploiting minerals right account for only 0.3 percent of total State budget revenue. From that, it can be affirmed that State budget revenues are increasingly sustainable.

Challenges from production and business

According to the Government, total State budget revenue in the 2016-2020 period is estimated at 6.8 million billion Dong. The proportion of mobilised revenue to the State budget reached 24.4 percent of GDP, of which, taxes and fees were approximately 21 percent of GDP. The proportion of domestic revenue by 2020 will reach nearly 84 percent of total State budget revenue.

To achieve this figure, on the afternoon of November 12, the National Assembly passed the Resolution on the State budget estimate in 2020 with total revenue of 1,512.3 trillion dong. This estimate increases by 3.8 percent compared to the estimate in 2019. In particular, domestic revenue is expected to increase by 12.5 percent compared to the estimate in 2019, accounting for 83.6 percent of the total balance. In particular, revenues from three economic sectors (State-owned enterprises, foreign-invested enterprises, non-State enterprises) will account for 45 percent of total revenue. This is a big challenge because these revenues have been turbulent recently, often not reaching the estimates.

According to Minister Dinh Tien Dung, there is partly subjective reason for the estimate assignment. In recent years, due to the rapid reduction of revenue from crude oil and import and export, estimated revenue from crude oil in 2020 accounts for 2.3 percent of total State budget revenue; revenue from import-export activities accounts for 13.8 percent and land use levies account for 6 percent, so annual revenue estimates focus on 3 economic sectors accounting for the largest proportion of total budget revenue and also focus on key economic localities. In this regard, in 2018, the Ministry of Finance reported to the National Assembly and adjusted closer to reality, showing the number of localities that did not meet the domestic revenue estimate excluding land and lottery numbers decrease in recent years. Specifically, if there were 34 localities in 2017, there will be 22 localities in 2018 and 15 localities in 2019. However, the forecast of local revenue also has many difficulties, such as when estimating and assessing in the next year, the local production capacity will increase due to one, two or three new projects. It was put into operation but it was delayed, leading to a decrease in revenue during the year or some localities have small and medium hydroelectricity, which depends much on the weather and business plans of enterprises.

Facing this challenge, besides balancing estimates, many solutions have also been set up. is the yinclude tight, efficient and transparent fiscal policy management; synchronously and flexibly coordinate with monetary policy to continue macro-economic stability, control inflation, support production and business development, and promote economic growth; tighten discipline and discipline, increase the responsibility of the leader in management and use of finance and budget. In addition, continue to focus on the management of State budget revenues; restructuring revenues; strengthening the inspection and examination work against tax losses, transfer pricing and tax evasion; reduce the tax debt ratio; expand the deployment of electronic invoices; no promulgation of policies to reduce State budget revenues, except for the adjustment of revenue policies according to integration commitments; strive to achieve the highest goals and tasks of the five-year National Financial Plan for 2016-2020.

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In particular, management of revenues, the expansion of tax bases, the reform and modernisation of the tax industry must be strengthened in addition to implementing the regulations on auction when selling, transferring, leasing public properties, land allocation and land lease in accordance with the law on management and use of public assets, the land law; specifying the collection, remittance and use of road use charges collected through the beginning of vehicles uniformly throughout the country, including roads under central management and roads under local management.