July 14, 2020 07:56

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Solving the "dual”difficulty of tax revenue

06:53 | 15/05/2020

VCN - When tax collection by the tax sector shows signs of difficulties due to the complex development of the Covid-19 pandemic, to be able to complete the "dual" task of supporting taxpayers affected by the COVID-19pandemic while ensuringbudget revenue, the problem posed for the tax sector is not simple.

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Budget collection in the first four months of 2020 in most localities has been low in terms of both progress and speed. Photo: Thuy Linh

Revenue decreased significantly

According to a report from the General Department of Taxation, State budget revenue in the first four months of 2020 hitVND 426,734 billion, equal to 34% of the estimate. In particular, revenue of April 2020 was very low, estimated at VND 75,000 billion, equal to 6% of the estimate, only equal to 65.3% compared to the same period in 2019. This dragged down the revenue growth rate in the first four months of 2020. The collection progress in most localities was due to the great impact of the pandemic and the policy of extension for tax and land rent payments.

According to a report from PhuTho Tax Department, if in the first quarter, tax revenue in the area was 37.6% of the estimate, up 169% fromthe same period last year, in April, the budget revenue in the province plummeted mainly due to regulations on alcohol and beer restrictions, which makes the output of two large brewing enterprises in the areas Sai Gon - PhuTho Beer Company and Hanoi – Hong Ha Beer Joint Stock Company plummeted. Moreover, although extension of tax payment under Decree 41/2020 / ND-CP did not affect total budget revenue, quarterly revenues and from April onwards were affected.

Another locality with a decline in revenue wasHai Phong. At the end of April, Hai Phong Department of Taxation estimated to gain more than VND 9,433 billion (including VND 500 billion of tax payment extension), reaching more than28% of the assigned estimate. The declined revenue was mainly due to production and business situation of enterprises as well as the implementation of the provisions of Decree 41/2020 / ND-CP of the Government extending tax and land rent payment. According to Hai Phong Tax Department, the amount of tax extension in April of the unit was VND 500 billion. Due to the pandemic, to create favourable conditions for businesses to operate, the tax sector has temporarily stopped the tax inspection and examination, so the plan to increase revenues through inspection and examination also has many difficulties.

At BacNinh Tax Department, tax revenues in most lines and economic sectors have been affected. In particular, the most impacted sector was FDI. The revenue of the whole year is estimated to a decline of about VND 650 billion. In addition, central State-owned enterprises in the area were also strongly affected by the 19 pandemic, so the estimated annual revenue reduction was about VND 215 billion. For non-State enterprises, the budget revenue for the whole year is estimated to decrease by VND 345 billion. According to the calculation of this unit, if the Covid-19 pandemic ends in the second quarter, total budget revenue of BacNinh will be reduced by about VND 1,210 billion. However, if the pandemic continues into the third quarter, it will continue to have greater influence on the budget revenue estimate.

Synchronously implementing the "dual" solution

To support taxpayers in recovering production and business activities and creating revenue sources for the State budget to offset the damage caused by the pandemic, the General Department of Taxation continues to implement urgent solutions supporting taxpayers in accordance with the direction of the Prime Minister in Directive No. 11 / CT-TTg of March 4, 2020; coordinates with other agencies and units of the Ministry of Finance and ministries, branches and localities to implement Decree No. 41/2020 / ND-CP on extending the time limit for paying tax and land rents to payers.

In addition, the General Department of Taxation requires tax departments to continue reviewing all taxpayers affected by the pandemic; closely monitoring developments of production and business activities of taxpayers affected by the pandemic, evaluating and identifying the extent of the impact of the Covid-19 pandemic on each branch or field and each taxpayer, summarise the level of influence on budget revenue, thereby focusing on supporting and timely solving difficulties and obstacles for taxpayers to stabilize production and business and create sustainable revenues for the State budget.

In the context that budget revenue is entering a difficult period, to complete the "dual" task of supporting taxpayers affected by the pandemic while ensuringbudget revenue, the tax sectorhas set urgent tasks for units. In the immediate future, the General Department of Taxation will request tax agencies at all levels to continue to closely monitor and urge the progress of State budget collection in each field, tax type and geographical area and prepare plans to estimate 2020 revenue based on a new scenario due to the impact of the Covid-19 pandemic.

In addition, tax authorities at all levels will focus on the timely deployment of solutions for revenue management, prevention of revenue losses, transfer pricing and tax evasion, tax debt recovery, to avoid the situation of enterprises abusing tax support policies of the State to evade taxes ordelay tax debt payment. At the same time, to review the remaining potential revenues, raise the revenue and make up for the State budget deficit due to the Covid-19 pandemic, such as: revenue from land andfrom e-commerce activities.

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Along with that, the tax sector will focus on urging budget collection for a number of central budget revenues (crude oil, natural gas, mining licensing fees and land use fees). At the same time, to continue to monitor and report on impact of state budget revenues due to the pandemic and implement Government’s Decree 100/2019 / ND-CP on the prevention of alcohol harms.

According to the General Department of Taxation, until May 7, 2020, more than 90,190 proposals for extension of tax and land rent payment are were sent to the tax office. Therefore, the total accumulated tax and land rent as of May 7, 2020 was over VND 26,260 billion. In particular, the extension for organizations and enterprises was VND 26,054 billion (including VAT of VND 8,130 billion, corporate income tax of VND 14,619 billion, and land rent of VND 3,305 billion); the extension for individuals was 207 billion VND (including VAT and personal income tax of VND 86 billion and land rental of VND 121 billion).

Currently, the tax office is continuing to receive and classify to handle taxpayers' requests for extension. For requests for extension that are not eligible for tax and land rent under the provisions of Decree No. 41/2020 / ND-CP, the tax authorities shall notify the taxpayers.

It is known that, based on tax data managed by the tax agencies, at the end of 2019, the number of taxpayers eligible for extension under Decree No. 41/2020 / ND-CP accounted for about 98% of the total number of taxpayers with the total expected tax and land rent of about VND 180,000 billion.

By Thuy Linh/ Huyen Trang