What can we see from Quang Nam's domestic revenue estimate in 2025?

Whether Quang Nam's domestic budget increases much or not depends largely on the consumption of the automobile market.

Determine the budget collection address

The Provincial People's Council decided that 20,800 billion VND is the amount of domestic tax to be collected in 2025. The Quang Nam Tax Department calculated this revenue based on the central, local and FDI state-owned enterprise sector to be about 1,875 billion VND (equal to 85.4% of the estimate, 90.3% of the estimated implementation in 2024). The estimated revenue of these areas is much lower than the estimate and actual revenue in 2024.

According to the Tax Department, the revenue accounts for a large proportion of hydropower plants. However, due to the lack of new capacity, power generation capacity, commercial electricity output depends on the weather, regulation by the National Power System Control Center and unpredictable competitive electricity prices.

Compared to the actual revenue in 2024, the estimate applied to hydropower enterprises is only 91.5% (430 billion VND) and the remaining enterprises are 88.4% (283 billion VND).

The FDI sector no longer has a brewery. Revenue from the South Hoi An Tourism Area depends on the openness of the Chinese and international tourism markets, and is only expected to be 89.2% (VND580 billion). The remaining FDI enterprises will only collect about VND500 billion.

Compared to the 2024 budget, the collection of registration fees and personal income tax is set to increase, but not by the actual revenue. According to the Tax Department, this decrease in actual revenue is because personal income tax is mainly collected from salaries and wages.

The remaining revenue sources such as personal income tax from capital investment, property leasing, winnings and from business households are forecast to grow. However, the revenue from these sources is not much, accounting for a small proportion of the total personal income tax. Other taxes such as fees and charges will be determined to be implemented in 2024.

Domestic budget revenue depends on the recovery and strong development of both international and domestic tourism markets.

The biggest difference is that environmental protection tax increased by 174.4% (VND 750 billion) and land use fee increased by 338.2% (VND 3,300 billion), while the policy of reducing environmental protection tax on gasoline, oil, grease, and lubricants and reducing value added tax from 10% to 8% for some goods and services has been approved by the National Assembly and the Government for 2025.

Revenue from the non-state industrial, commercial and service sectors accounts for the majority of the total annual domestic budget revenue (more than 60%). 2025 is no exception. The revenue from this sector is about VND 12,522 billion, up 0.3% from the estimate, but only 79.3% of the actual revenue in 2024.

The largest proportion of total revenue in this area is still Truong Hai (accounting for 73.3%). However, the budget revenue in 2025 assigned to Truong Hai is only about VND 9,180 billion, equal to 98.7% of the estimate, nearly 29% lower than the actual revenue in 2024 of this group (in 2024 Truong Hai paid VND 12,960 billion). The remaining amount (VND 3,342 billion) will be mobilized from private hydropower enterprises (VND 600 billion), nearly 9,000 other small enterprises and households and individuals doing business (VND 2,742 billion).

Budget collection collaboration

The domestic budget revenue set for 2025 is only 3.5% higher than the 2024 estimate, but only 91.2% of the actual revenue in 2024. Unlike the budget revenue that has been defined for many years, the following year must always have an estimate of increasing revenue compared to the previous year, by at least 9-10%.

Land rent is expected to bring in large revenues by 2025, but is forecast to be difficult to complete.

The main revenues, accounting for the largest proportion in the domestic revenue structure, are both lower than the estimate and the implementation in 2024, except for land use fees and environmental protection taxes which are set to increase with the forecast that land use fee collection projects are likely to recover.

When the real estate market changes, businesses have financial resources to pay outstanding land use fees to the budget (currently, land use fee debt is still very large).

In theory, once domestic revenue is set to increase only slightly (3.5% compared to the 2024 estimate), but much lower than the actual revenue in 2024, the possibility of domestic budget revenue in 2025 will be "easy to breathe", not only easily meeting the planned target but also possibly exceeding the revenue like in 2024.

However, the budget, finance and revenue agencies do not think so. They believe that approving such a budget revenue level is reasonable, and that it is impossible to rely on the actual revenue figures of 2024 to make estimates for 2025 when there are still too many unfavorable factors affecting the economy and revenue sources.

Mr. Luong Dinh Duong - Deputy Director of Quang Nam Tax Department said that the budget collection in 2025 will be more favorable if Truong Hai Group maintains its growth rate, the problems of each real estate project are effectively handled and public investment capital is disbursed well, achieving high efficiency.

Removing bottlenecks for real estate projects will be one of the important highlights to promote budget growth.

Market and economic reality shows that budget revenue is a chart measuring economic development and a measure of the budget management level of local governments.

This criterion is also an important basis for assessing the quality of tax management of tax authorities. Therefore, the tax sector is always concerned about the implementation of tax collection, which is necessary. However, the real estate market has not shown any signs of recovery. Real estate businesses have not yet found a way to open the market.

The policy of reducing environmental protection tax on gasoline, oil, grease and lubricants and reducing value added tax from 10% to 8% on some goods and services will reduce production and business costs for enterprises and promote personal consumption, but will affect budget revenue in terms of targets for this tax.

Not to mention the large number of businesses leaving the market, not knowing when they will return. The number of new businesses entering the market and new investment projects are also only in the start-up phase.

Mr. Nguyen Van Tiep - Director of Quang Nam Tax Department said that currently, new production capacities cannot generate revenue. There are no additional addresses to collect taxes.

According to the cycle after receiving the policy of 50% reduction in registration fee, car sales will decrease. Meanwhile, electric cars are coming out a lot, car competition is fierce. It is very difficult to forecast or predict the market.

If there is a policy to reduce registration fees by 50%, that would be great, but this “protection” is unlikely to continue. As for land use fees, it is forecasted that it will still be difficult to collect. At most, only about 2,000 billion VND can be collected.

“Domestic budget collection this year will be difficult. The tax sector will have to make every effort to overcome the pressures and difficulties of the economy, strive to complete and exceed the assigned budget,” said Mr. Tiep.

Director of the Department of Finance Dang Phong said that although the budget revenue estimate is low, it is not easy to implement. There are no more support and stimulus policies, and competition for automobile market share is increasingly fierce, so Truong Hai will face more difficulties in its production and business plans. The shopping needs of people and businesses tend to be saturated, which will cause consumption output to decrease significantly compared to 2024.

“The Ministry of Finance expects fierce competition in the automobile sector. The market is saturated, so it has set a low revenue target. Quang Nam has strived to increase the revenue target for automobiles by 1,000 billion VND compared to the Ministry of Finance’s target. This figure will require a lot of effort to achieve,” said Mr. Phong.

Source: https://baoquangnam.vn/thay-gi-tu-du-toan-thu-noi-dia-quang-nam-nam-2025-3146979.html