“For 3 consecutive years of exceeding the state budget revenue (2021-2023) in difficult conditions due to the impact of the pandemic, the Ministry of Finance has had innovations and initiatives to effectively carry out the assigned state financial and budgetary tasks. Thanks to that, there are resources and room to support people, businesses and the economy through a series of support packages on taxes, fees and charges. The finance sector has affirmed its role as a pillar of the country's economy”. That is the affirmation of Minister of Finance Ho Duc Phoc - Member of the Party Central Committee, Secretary of the Party Committee, Minister of Finance.
Minister of Finance Ho Duc Phoc. Photo: Huu Tho
The most anticipated tax and fee solutions
Reporter: Minister, the state budget revenue in the first four months of the year is still following the estimated progress. What is the significance of achieving positive budget revenue results in the current socio-economic context, Minister?
Minister Ho Duc Phoc: Entering 2024, although our country's economy faces many difficulties and challenges, with great efforts, determination, and close direction from the Government and the Prime Minister, the Ministry of Finance has managed and operated the fiscal affairs with many positive results.
Revenue in the first four months of the year was quite good compared to the estimate. The cumulative state budget revenue in the first four months is estimated at VND 733.4 trillion, equivalent to 43.1% of the estimate, up 10.1% over the same period in 2023 (central budget revenue is estimated at about 46.5% of the estimate; local budget revenue is estimated at about 39.7% of the estimate).
Regarding local revenue, it is estimated that 25/63 localities have achieved domestic revenue of over 40% of the estimate in the first 4 months; 54/63 localities have increased revenue compared to the same period. In the first 4 months of the year, the Ministry of Finance has directed the Tax sector to resolutely implement synchronous and effective solutions, both "relaxing people's strength" with tax deferral policies, but resolutely not allowing tax evasion and tax avoidance to cause loss of state budget revenue. The Tax sector has implemented the application of electronic invoices, applied AI (artificial intelligence) to analyze tax data, collected taxes from cross-border and domestic e-commerce platforms, connected payment initiators with tax authorities, synchronized tax codes with citizen identification numbers, etc.
Positive budget revenue results will create positive conditions for fiscal policy management, ensuring tasks of spending on disease prevention, natural disasters, and social security, as well as helping to consolidate fiscal policy space, reduce inflationary pressure; contribute to actively supporting a more solid state budget balance, offset the reduction in revenue due to the implementation of tax, fee, and charge exemption and reduction policies; create room for stabilizing monetary policy and stabilizing the macro-economy.
PV: Over the past 3 years, facing the negative impacts in many aspects from the Covid-19 pandemic, fiscal policy has once again affirmed itself as a pillar for socio-economic development through exemption, reduction, and extension of taxes, fees, land rents, and support for people and businesses. In the coming time, these are still the most anticipated solutions. Can the Minister share more about this?
Minister Ho Duc Phoc: More than half of the term has passed, the country has overcome many storms and challenges and is ready to enter a new stage of development. That result has a very important contribution from budget management and fiscal policy implementation.
We have just gone through difficult years after the Covid-19 pandemic. When the economy and businesses were in difficulty, the Government was steadfast and consistent in its management goals of stabilizing the macro economy, controlling inflation, promoting growth, and ensuring major balances. Implementing an expansionary fiscal policy through exemption, reduction, and extension of taxes, fees, charges, land rents, and land use fees to support people and businesses, with an amount of about 700 trillion VND.
In the coming time, realizing that the situation is still difficult and challenging, based on the assessment of the results achieved by the solution to reduce value-added tax (VAT) by 2% according to Resolution No. 110/2023/QH15, the Government will submit to the National Assembly for consideration and permission to continue implementing the policy of reducing VAT rates by 2% for a number of groups of goods and services currently applying a VAT rate of 10%, in the last 6 months of 2024.
In addition, the Ministry of Finance has sent a dispatch to the Prime Minister to allow the drafting of a decree to extend the deadline for payment of VAT, corporate income tax (CIT), personal income tax (PIT) and land rent in 2024; a decree to extend the deadline for payment of special consumption tax (SCT) on domestically produced or assembled automobiles according to simplified procedures and processes, so that the policy can soon come into effect.
Many international organizations forecast Vietnam's economic growth in 2024 at 5-6%. However, these forecasts are lower than the target assigned by the National Assembly. Therefore, I think that, in addition to tax and fee solutions, it is still necessary to combine and synchronize solutions, from improving the investment and business environment, simplifying procedures; supporting capital and interest rates, removing difficulties of the economy; especially promoting public investment, real estate market, developing production and business, promoting exports are solutions that need to be focused on drastically.
Digitalizing tax management contributes to increasing budget revenue
Reporter: The Ministry of Finance is one of the ministries and sectors with the strongest digital transformation, bringing practical efficiency in management work, measured by specific numbers. As the Minister once shared, this is a fundamental solution contributing to increasing budget revenue in the context of economic growth not meeting expectations. Can the Minister elaborate on this?
Minister Ho Duc Phoc: The Finance sector has achieved many outstanding achievements thanks to the digitalization of tax management, which is recognized in the expansion of the implementation of electronic invoices (E-invoices), tax management for e-commerce activities, and business on digital platforms. The tax authority has deployed E-invoices, E-invoices generated from cash registers, and operated the Electronic Information Portal for foreign suppliers. And recently, it has deployed the issuance of invoices for each sale for business activities, retail of gasoline, etc.
Regarding the implementation of electronic invoices, from the implementation date to April 21, 2024, the number of electronic invoices received and processed by tax authorities is estimated at 7.48 billion invoices. There are 53,424 business establishments that have registered to use electronic invoices generated from cash registers, the number of electronic invoices generated from cash registers is more than 328.6 million invoices. Regarding the implementation of issuing invoices for each sale for petroleum business and retail activities, up to now, nationwide, there have been 15,935 petroleum retail stores issuing electronic invoices for each sale, reaching over 100% of the total number of petroleum retail stores.
Successfully operated the Electronic Information Portal for Foreign Suppliers, 94 foreign suppliers registered and were granted tax codes via the electronic information portal, an increase of 9 new foreign suppliers compared to the previous month. Revenue in the first 4 months of the year was about 3,900 billion VND.
Implementation in the electronic environment will contribute to strengthening control and revenue management, ensuring tax collection, and a transparent business environment to increase state budget revenue.
Reporter: Although economic growth in the first quarter was positive, it is forecasted that there will be many difficulties in the coming time. If economic growth does not meet expectations, how will it affect the state budget collection, Minister?
Minister Ho Duc Phoc : State budget revenue is directly proportional to economic growth. Good budget revenue is closely linked to the vitality of the economy and the “health” of enterprises. Of course, low growth also affects state budget revenue, but the Finance sector always strives to “nurture revenue sources”, “ease people’s burdens” and also not to let revenue items go uncollected according to regulations.
Although the Government proposes to reduce taxes and exempt land rents for people and businesses each year, on average about VND200 trillion. However, the budget still makes progress and meets the set plan. This demonstrates the Government's flexible and open management and operation of fiscal policy; at the same time, increasing expenditures, such as construction investment, infrastructure development, and economic recovery expenditures after the Covid-19 pandemic.
It must be affirmed that, in recent times, the Government has focused on directing the Ministry of Finance and the Tax sector to complete the task of budget collection. The Finance sector has had many initiatives in tax collection, and has proposed many solutions, from the issue of electronic invoices to the construction of tax data centers and cross-border electronic information portals.
In addition, the Finance sector has implemented tax collection for business activities and real estate transfers; guided people and businesses to correctly declare real estate transfer prices, improve management efficiency, ensure budget revenue... These solutions not only support businesses, ease people's burdens, but also collect potential revenues that have not been collected for a long time, ensuring a resource to implement spending on infrastructure investment and socio-economic development of the country.
I believe that completing the financial and budgetary tasks requires great effort, creativity and flexibility. Of course, achieving that task is not enough if only the Finance sector is present, but this task is also the result of great determination from all levels, sectors, localities and especially the efforts of people and businesses to overcome difficulties.
Building scenarios for effective state financial and budget management
PV: However, from now until the end of the year, it is forecasted that there will still be many potential difficulties. What solutions does the Ministry of Finance have to be proactive in managing fiscal policy, Minister?
Minister Ho Duc Phoc: The Ministry of Finance is currently developing scenarios to advise and propose to the Government and the National Assembly to effectively manage financial and state budget work.
In reality, the management of financial and budgetary work has never been without difficulties, especially in the past 3 years of “difficulties on top of difficulties”. However, the Ministry of Finance continues to make efforts with the highest determination to both ensure the task of budget revenue and expenditure, and ensure the work of removing difficulties for people and businesses, and supporting economic recovery in the most effective way.
Along with fiscal policies through tax exemption, reduction, and extension, the Ministry of Finance will continue to innovate, create, apply digital transformation, reform administrative procedures, and build synchronous financial policies and laws... to accompany businesses in overcoming difficulties, continuing to develop, and making greater contributions to the country's development.
We believe that tax support to “nurture revenue sources” and “relax people’s strength” is very necessary, but at the same time, focusing on perfecting legal policies, freeing up resources, and removing difficulties in capital, market, and legal aspects… for business development is extremely important and is a solid foundation for sustainable development.
Reporter: Improving the financial market and unblocking capital flows for the economy are always given special priority by the Government. According to the Minister, what solutions are needed in the coming time to make the financial market more stable and sustainable?
Minister Ho Duc Phoc: The financial market, including the stock market, government bonds, corporate bonds, and insurance markets, has been greatly affected by fluctuations in the domestic and international macro economy. However, thanks to the attention and drastic direction of the central government, the National Assembly, and direct guidance from the Government and the Prime Minister, as well as the efforts of management agencies at all levels, the financial markets have gradually stabilized and recovered.
The Vietnamese stock market is still guaranteed to operate smoothly, safely, and with liquidity, and is changing positively towards becoming more transparent and healthy. The legal framework is being reviewed, updated, and amended to better suit the new context. The quality of goods on the floor is being controlled more strictly in the direction of improving quality. In addition, management agencies are making great efforts to promote the process of upgrading the Vietnamese stock market.
The private corporate bond market after Decree 08/2023/ND-CP, along with solutions to remove difficulties for businesses promoted by the Government, is showing many signs of warming up again. In addition to the primary bond market gradually regaining confidence as more businesses issue more transparently, the secondary private bond trading market is operating with good liquidity and more transparent and reliable information.
The insurance market, especially life insurance, despite many difficulties, has now operated in a more systematic, quality and transparent manner after the drastic participation of the management agency and many related units. In the coming time, the Ministry of Finance will continue to closely coordinate with related ministries and branches to have solutions to promote the financial market to develop transparently, healthily and sustainably, contributing more substantially to the country's economy with the motto that strong enterprises lead to good and sustainable market development.
PV: What are the solutions that the Finance sector will implement to contribute better, more effectively, and more sustainably to the country's economy in the coming time, Minister?
Minister Ho Duc Phoc: The Finance sector will continue to promote proactiveness, creativity, and flexibility to complete key tasks, effectively collect and spend the State budget, develop the financial market, perfect financial policies, and promote economic development. The Ministry of Finance will develop proactive and effective response solutions, including urgent and unexpected situations.
The Ministry of Finance continues to closely coordinate with ministries, branches and localities to proactively and flexibly implement, maintain macroeconomic stability, control inflation, ensure major balances of the economy, promote public investment disbursement, spend the budget effectively, practice thrift and combat waste.
According to the assigned functions and tasks, we continue to operate a reasonable, focused, and key expansionary fiscal policy in the short term and implement a sustainable financial policy in the long term; deploy solutions to improve the effectiveness of fiscal and financial policies.
At the same time, the Ministry of Finance remains steadfast in its goal of removing difficulties for people and businesses and fostering sustainable revenue sources. We will continue to advise all levels on solutions to support people and businesses to continue removing difficulties for production and business, creating jobs, and contributing to economic growth.
At the same time, continue to promote the application of information technology, extensive digital transformation, strong administrative procedure reform, focus on public investment disbursement, and build infrastructure projects quickly and effectively. Complete financial laws, facilitate production and business, especially real estate, public investment, and attract FDI.
Thank you very much Minister!
Tran Thang - Ministry of Finance Portal
Source: https://mof.gov.vn/webcenter/portal/btcvn/pages_r/l/tin-bo-tai-chinh?dDocName=MOFUCM313029
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