Continued Supports for Business Development Required to Nurture Budget Sources

 

Pham Thi Tuyet Lan, Deputy Director of the Estimations Department under the General Department of Taxation, said that tax collection was difficult in the first five months of 2016 because of falling oil prices, droughts in the Central Region and the Central Highlands, severe salinity intrusion in the Mekong Delta, unusual fish death in some northern and central provinces, environmental pollution, and food poisoning. Besides, the implementation of the Law on amendments and supplements to some articles of the Tax Law (Law No. 71) provides that ordinary corporate income tax fell from 22 per cent to 20 per cent from January 1, 2016 and preferential tax was brought to 17 per cent. Lower tax rates have promoted business development but it also reduced State budget revenues.

 

To offset the revenue gap caused by objective reasons, based on directions of the Government and the Ministry of Finance, the General Department of Taxation requested local tax authorities to review and assess every income item and tax item to propose appropriate and effective management solutions. Tax authorities also inspected and audited tax reimbursements, intensified tax inspections and applied drastic measures to recover tax debts. As a result, State budget revenue grossed VND321,215 billion in the first five months, fulfilling 42.5 per cent of the estimate and growing 11.9 per cent over the same period of 2015. Importantly, takings from basic business operations outperformed the same period of last year. For example, tax revenue from non-State commercial and industrial areas increased 24.3 per cent and tax revenue from foreign-invested companies climbed 14 per cent. Personal income tax augmented 18 per cent and land-use fees looked up 34.4 per cent.