Efforts to Accomplish Tasks

Faced with economic difficulties and challenges in the first quarter which are forecast to hurt financial and budgetary collection in the coming time, on April 5, Minister of Finance Ho Duc Phoc asked the tax sector to closely monitor the "health" of businesses to promptly advise on fiscal policies.

The tax sector is working collectively to accomplish all assigned tasks

Sharp slump in budget revenue

Reporting at the conference on April 5, Mr. Mai Xuan Thanh, Deputy General Director of the General Department of Taxation, said that the fiscal revenue reached 31.1% of the target in the first quarter but dropped 17.5% year on year. March budget revenue decreased from February as well as January. The budgetary revenue collected by the tax sector kept declining, if excluding extraordinary income. Specifically, the sector raked in VND95.4 trillion in January, VND85.3 trillion in February and only VND82.5 trillion in March. Notably, takings dropped most in real estate, securities trading and excise tax in the first quarter.

Given this development, the budgetary income flow was different from previous years, he said, adding that it will likely be more difficult in the coming months, he said.

Regarding law-making work, in the quarter, the General Department of Taxation reported to the Ministry to ask the Government to issue decrees on the extension of value-added tax, corporate income tax, personal income tax and land rent in 2023 and reported to the Ministry to propose the Prime Minister to speed up data sharing to boost e-commerce development, combat loss of state budget revenue, and ensure monetary security.

In April and in the second quarter of 2023, the General Department will hold meetings with businesses greatly affected by Pillar 2 tax policy and report this matter to the Ministry of Finance. At the same time, the agency will organize a national conference to discuss budgetary collection and loss-preventing measures and focus on solutions to unveil unobserved revenue sources, especially from e-commerce.

Notably, the General Department will hold a VAT refund conference; organize business dialogues at the branch level and continue to study and build an e-invoice center; open the electronic invoice database center; host a national conference on information technology application, deploy breakthrough solutions for better tax management; and accelerate the deployment of an electronic data portal for ministries and branches.

At the briefing, units under the Ministry of Finance reported on work performance in the past time and working plans in the coming time. Accordingly, Mr. Hoang Viet Cuong, Deputy General Director of the General Department of Vietnam Customs, said that budgetary revenue collected by the customs sector also witnessed a steep drop. Specifically, in the first quarter, the country’s import-export turnover sank 13.3% year on year to only US$154 billion, of which the export value plunged 11.9% to US$79 billion and the import value tumbled 14.7% to US$75 billion. The pace of decline kept widening. The steep plummet of some key exports such as raw materials, machinery and parts for production greatly affected the budget revenue of the customs sector, which collected VND91,267 billion in the March quarter, equal to 21.5% of the target and down 17% year on year. The sector saw a drop of VND10 trillion in machinery and equipment imports and over VND1,700 billion in petroleum imports. These drops were the largest in many years, he noted, adding that the situation may be even more difficult in the coming time.

Before this reality, the General Department of Vietnam Customs directed local customs to hold dialogues and meetings with big local exporters and exporters, and work with large corporations to grasp their business performances to forecast its revenue in the coming time.

Efforts to complete assigned tasks

Praising strong performers in the difficult and challenging quarter, Minister Ho Duc Phoc said, documents and advisories of the Ministry of Finance are highly appreciated by the Government and ministries for their accuracy, methodology, logicality and complete solution. He said, the country’s GDP contracted in the first quarter, while base interest rates and yields on corporate bonds all increased.

This context showed that the fiscal policy will be tough in the coming time. Because finance is present in every corner of life, not only governmental finance but also residential finance, when the economy faces difficulties, the finance sector will suffer enormous impacts as a result. Meanwhile, as the fiscal policy is based on the health of businesses, if businesses and the economy are in difficulty, increasing pressure will weigh on fiscal policy.

Minister Phoc, therefore, requested the whole sector to be more united, more cooperative, more supportive and more sharing at work to complete all assigned tasks.

Expressing his agreement on reports, he noted that law-making must be a top priority, with a focus placed on documents on mechanisms and policies assigned or opined by the National Assembly and the Government, because this is the basis for assessing the quality of timely coordination and advice of the Ministry of Finance on important issues of the country.

In addition, tax, customs and corporate finance agencies need to closely monitor corporate performance and be based on budget revenue and expenditure, import and export situations to make reports to the Government to assess difficulties and challenges faced by enterprises and the whole economy to promptly give advice on fiscal policies.

With regards to budgetary revenue collection, he asked the General Department of Taxation to focus on perfecting the global minimum tax policy and consider it an important issue to speed up this task. Besides, the agency will urgently and effectively deploy projects, including electronic invoice data centers, electronic invoice management tools and real estate transfer management software; and strengthen the management of domestic e-commerce platforms and cross-border e-commerce platforms in order to prevent tax loss and strictly implement tax refund to avoid tax loss.

Minister Phoc also directed the General Department of Customs to strictly exercise discipline and prevent negative and troublesome manifestations; install modern machinery and equipment for airports and seaports to ensure the performance of assigned tasks; continue to step up the fight against smuggling and commercial fraudulence; and closely monitor import and export turnover to promptly advise the Ministry and Government to make workable decisions.

Regarding communications, he suggested the agency be active and act one step ahead in order to raise social awareness of the nature of its problems. He also asked all relevant bodies to focus on carrying out their tasks well, including privately placed corporate bonds, Government bonds and budget settlement.

Source: Vietnam Business Forum