Q1 State Budget Revenue Sees Positive Performance

The Ministry of Finance reported an encouraging performance of State budget revenue during the first quarter of 2024. This was disclosed at an online briefing held in mid-April 2024, which focused on the financial and budgetary activities of the first quarter and the planned activities for the second quarter.

General Director Mai Xuan Thanh of the General Department of Taxation (GDT) said, the State budget revenue collected by tax agencies in March 2024 (as of April 5, 2024) was VND131,256 billion, equal to 8.8% of the target and up 8.1% year on year, totaling VND490,196 billion, equal to 33% of the estimated target and up 10.9% year on year. Thus, the first quarter budget revenue collected by tax authorities was optimistic relative to the estimated target and to the result in the same period of 2023, he said. However, State budget collection is still difficult, challenging and prone to huge risks. Therefore, the tax sector must be persistent with directions of the Ministry of Finance, uphold the sector-wide determination and closely coordinate with relevant bodies.

Regarding tax refund, in March, GDT continued to urge tax agencies to strengthen management and supervision, speed up progress and better implement VAT refund in a strict, timely and lawful manner. Therefore, the value of tax refund in the first quarter of 2024 increased from a year earlier. As of April 4, tax authorities issued 4,472 decisions to refund VND31,892 billion, a year-on-year growth of 8%.

Regarding policymaking, in addition to urgently focusing and accelerating the construction of a decree detailing the implementation of Resolution 107/2023/QH15 of the National Assembly on application of additional corporate income tax to prevent global tax base erosion, a decree amending Decree 123/2020/ND-CP dated October 19, 2022 of the Government on invoices and documents, and a decree amending and supplementing Decree 132/2020/ND-CP on related party transactions, the General Department of Taxation is reviewing other assigned legal documents as scheduled.

In particular, according to Thanh, electronic invoicing for petroleum retail stores has been now basically completed, reaching 99.97%. Recently, the Prime Minister sent a letter praising the Ministry of Finance, the General Department of Taxation and local tax departments for their efforts and achievements in implementing electronic invoices for petroleum trading and retailing. GDT will continue to consolidate and strengthen inspection, examination and supervision of this policy's implementation. Moreover, GDT hoped that competent authorities will continue to bring policies to life in the coming time and the Ministry of Finance will ask the Government for permission to seal taxes subject to petrol stations that breach the law. GDT requested public employees of the finance sector to support the tax sector by taking invoices for gasoline bought at petrol stations. To prevent electronic invoice fraud, GDT determined that this is an important, long-term task and always receives strong attention and direction.

In April and the second quarter, GDT will continue to keep a close watch on domestic and world economic situations and keep close track of budget collection progress to advise the Ministry of Finance and the Government on timely and appropriate operating plans; actively research and advise the ministry to submit support packages for 2024 to the Government and enact it effectively.

The meeting also heard reports on work results of tax authorities in the first quarter. According to Mr. Nguyen Van Tho, Deputy General Director of the General Department of Vietnam Customs (GDC), in the first quarter, policy institution building was executed as scheduled. In addition, the first quarter budget revenue reached VND88,354 billion, equal to 23.6% of the full-year target, down 4% year on year. He cited four main causes of customs revenue decline. In particular, the value of taxable imports and exports decreased, typically gasoline and completely built automobiles. Besides, the VAT reduction as a result of Decree 94 amounted to about VND4 trillion. Furthermore, the weeklong Lunar New Year 2024 fell on the quarter, thus affecting the revenue collection of the customs sector.

Deputy Minister Cao Anh Tuan said that the Ministry of Finance is currently enacting many major laws like the Law on Special Consumption Tax (amended), the Law on VAT (amended), the Law on Corporate Income Tax (amended) along with 18 decrees, 11 projects submitted to the Government and the Prime Minister and 24 circulars issued within its authority. Therefore, customs units need to reinforce coordination to implement them as scheduled and ensure timeliness and quality.

Regarding fiscal policy management, he emphasized that State budget revenue reached 34.06% of the full-year target as of April 7, signifying a good performance. However, relevant bodies, including GDT, need to carefully analyze factors that affect revenue sources to have further management solutions. Notably, they need to review extraordinary domestic revenues, forecast revenue sources in the second quarter, and take into account cases subject to tax reduction, tax extension and tax postponement solutions as per the Government's direction. GDT and GDC will continue to review solutions to combat smuggling and manage budget revenue.

By Huong Hau, Vietnam Business Forum