Strategies to Successfully Accomplish Budget Collection Goals

Recognizing the importance of achieving state budget collection targets by year-end, local tax authorities have formulated solutions and action plans. The recent review conference on tax affairs for the first half of the year underscored the General Department of Taxation's resolute commitment toward achieving these targets and outlined future tasks accordingly.

In the first half of 2024, the tax sector recorded revenue totaling VND 865 trillion, surpassing 58% of the projected amount and reflecting a 15% increase from the previous year

Expanding the tax base through e-commerce tax management

Mr. Vu Manh Cuong, Director of the Hanoi Tax Department

In the first six months of the year, Hanoi's state budget collection was optimistic. A strong contributor to this good overall achievement was tax management in e-commerce business activities. Accordingly, in the reporting period, the Hanoi Tax Department identified 418 e-commerce platform owners and 54 accommodation service providers, thus finding 366,000 booths and 198,848 tax codes. Regarding the administration of business households, in addition to 200,000 traditional business households currently managed, the department has now expanded the tax base by figuring out 198,000 more business households on e-commerce platforms. Hence, more than VND10,000 billion was collected from e-commerce business in the first six months of the year. To achieve this result, following the approach to building a database as the foundation, assigning communications as the focus and regarding inspections and examinations as the spearhead, the Hanoi Tax Department launched a website that synthesized all tax data, combined with bank data and personal identification data to form electronic books for managing every taxpayer. Notably, tax authorities also directly support companies by promptly grasping their health, especially newly established ones, to have the best solutions.

To manage e-commerce tax more effectively in the last months of this year, the Tax Department recommended regulations on the tax declaration responsibility of e-commerce exchange operators instead of business households to reduce pressure on tax authorities while facilitating businesses, especially small ones. At the same time, business households must use electronic invoices for e-commerce business. Tax authorities are considering allowing e-commerce exchanges to issue electronic invoices on behalf of their merchants.

Enhancing support and alleviating obstacles for businesses to foster revenue growth

Mr. Nguyen Nam Binh, Director of the Ho Chi Minh City Tax Department

In the first six months of 2024, the budget revenue collected by the HCM City Tax Department was estimated at VND206,380 billion, equal to 58.7% of the full-year target and up 25.6% year on year. Excluding unexpected revenue items and policy impacts, the amount was VND191,937 billion, equal to 54.5% of the annual target and up 16.8% from a year earlier. To achieve the 2024 objectives, the department will implement effective management solutions. These include enhancing support for businesses to nurture sustainable revenue sources for the State budget, reinforcing revenue management, and optimizing revenue sources with growth potential. The department will also focus on managing declaration processes, conducting inspections to prevent tax losses, and closely monitoring debt collection progress. Measures will be deployed to intensify collection efforts and enforce tax debt payments.

Regarding land-based revenue, the department will advise the City People's Committee to expedite record processing for timely tax collection. It will continue to collaborate with relevant units and sectors to advise the Municipal People's Committee on addressing obstacles to expedite legal procedures, facilitating prompt project initiation and operation to boost budget revenue effectively.

Additionally, tax authorities will closely monitor tax collection progress across economic sectors. This proactive approach will enable timely assessment of company impacts and health, facilitating appropriate collection management measures. Emphasis will be placed on addressing overdue taxes promptly to prevent tax arrears and late payments, alongside stringent management of budget revenue from e-commerce and gold trading.

Focused management of business household tax

Mr. Nguyen Tien Truong, Director of Hai Phong Tax Department

In the first six months of 2024, thanks to consistent management solutions, Hai Phong Tax Department collected VND29,862 billion for the State coffers. Excluding land use fees and land rents, the amount was VND15,299 billion, or 55.6% of the target set by the Municipal People's Council and 117.8% more than the year-ago period. Of the sum, budget revenue from business households was VND246 billion, equal to 0.82% of total domestic revenue and 1.6% of total revenue minus land use fees and land rents and up 112.6% year on year.

As of June 2024, the Hai Phong tax sector managed 31,810 business households while only 186 officials served them. Although the revenue from business households accounted for a small share, it raised many issues regarding administration, especially in the current context of the growing digital economy. Specifically, some business entities were not recorded because they did not have registered addresses while trading across the city and across the border. Business household data managed by tax authorities are not updated promptly while taxpayers do not declare correctly on the electronic accounting books.

On this basis, the Hai Phong Tax Department proposed perfecting policies and mechanisms for administering business households by requiring those on e-commerce platforms to conduct business registration. The department will need to complete the debt management policy and process for households with business registration, add their bank account information to enforce tax debt collection and implement measures to temporarily suspend entry and exit for individuals with tax debts. On the other hand, it will promote information technology application in household management to strengthen connectivity with the national population database for electronic identification and authentication and prevention of tax frauds. In addition, it will improve the quality of grassroots civil servants, guide tax information technology applications to them in a bid to raise the quality of human resources, reduce payrolls and increase the tax collection from business households.

Strengthening management solutions, increasing budget revenue

Ms. Pham Thi Tuyet Lan, Director of the Tax Revenue Estimation Department

The H1, 2024 budget revenue was generally quite good, over 58% of the estimation, but that did not mean that budget revenue collection will be certainly as good from now until the end of the year. In reality, the monthly revenue collection in some localities showed signs of slowing down while nine out of 21 tax revenue items and 31 provinces and cities reported worse performance (below 55%). Furthermore, the adoption of the 2% VAT reduction amid high but unstable economic recovery will exert a certain impact. Tax exemption and reduction policies are still being issued, which will affect the budget revenue in the last six months of the year.

Therefore, to complete and exceed the 2024 budget target assigned by the National Assembly and the Government, in the last months of the year, tax authorities at all levels need to analyze and correctly assess budgetary revenue situations and developments to make accurate forecasts to have solutions for stronger management, utilization and increase revenue, thus creating a basis for making better budgetary revenue estimation for 2025.

By Huong hau, Vietnam Business Forum