Crude oil revenue is very small
At the end of the discussion session on the morning of November 2, Minister of Finance Ho Duc Phoc reported, explained and clarified a number of budget and public investment issues.
Talking about fiscal policy, Minister Ho Duc Phoc said that recently the Government has been implementing an expansionary fiscal policy, or in other words, a deficit, which means reducing taxes but still increasing budget spending.
In the past 3 years, the Ministry of Finance has submitted to the National Assembly and the Government tax reductions for various taxes and land rents. In 2021, it reduced 132,400 billion VND; in 2022, it reduced 233,000 billion VND; this year, it is expected to be about 200,000 billion VND. According to Mr. Phoc, this is a great effort.
According to the Minister, after reducing taxes, how can we have money to continue maintaining the fiscal balance, while having to put 347,000 billion VND into the economy according to Resolution 43/2022?
Regarding the implementation of the 2023 budget estimate, as of October 30, the budget revenue reached 85%, or 1,366 trillion VND. According to the Minister, many delegates said that revenue increased from land fees, but land fees only reached 57.8%, or only 86,482 billion. Revenue from crude oil is also very small, only 46,000 billion, or only 2.6% of total budget revenue.
"Therefore, the main source of budget revenue comes from production and business, especially domestic revenue," the Minister of Finance emphasized.
Minister of Finance Ho Duc Phoc (Photo: Quochoi.vn).
Regarding the 2024 budget estimate, Minister Ho Duc Phoc assessed that this is a great effort by the Government and the National Assembly. Accordingly, the Resolution of the 8th Central Executive Committee must increase by more than 5%.
However, if we calculate the two expected tax reductions, which are the 2% reduction in VAT as well as the environmental protection tax on gasoline, oil and grease, the estimate is up to 1,757 trillion VND instead of 1,700 trillion VND. This is equivalent to an increase of 8.46% compared to the estimated implementation in 2023 and compared to the estimate for 2023.
In particular, in the expenditure arrangement, the Ministry of Finance arranged for capital construction expenditure or public investment expenditure of VND 677,300 billion, accounting for 32% of the total budget expenditure. As well as implementing the Central's policy and arranging enough to increase the basic salary from July 1, 2023 and implementing Resolution 27 of the Central on salary reform starting from July 1, 2024.
Painful lessons from tax refunds
Clarifying some issues raised by delegates, regarding the viewpoint of some delegates that it is necessary to reduce regular expenditure, the Minister said that the opposite viewpoint is to reduce investment expenditure, to save in investment. Investment must not be wasted, investment must be effective, investment must not be lost.
As for regular expenses, the Ministry of Finance calculates that for some ministries and sectors, salaries and salary allowances account for over 66%, leaving nothing to save.
“Right now, the ministries and branches receive very few guests and go on business trips, so we should not raise this issue too much. If any delegates want, we will detail some ministries and branches to show that we are very frugal in regular spending, mainly serving people, mainly on salaries and salary allowances,” Mr. Phoc emphasized.
Minister of Finance Ho Duc Phoc emphasized the view that tax refunds must comply with tax law regulations.
Regarding tax refunds, according to the Minister, the tax authority has refunded 92%, currently only processing 14,857 files and is processing 534 files - equivalent to VND 9,154 billion. The conditions for tax refunds are to have a VAT invoice and money transfer documents. For import-export companies, there must be additional contract money transfer documents to transfer money for goods and customs declarations.
According to the Minister, some of the problems the Ministry has verified are that foreign tax authorities said that this enterprise does not exist, which means the contract is invalid, and an invalid contract cannot be completed.
“The tax refund issue has had a very painful lesson. For example, in the Thu Duc House case, the Ho Chi Minh City Tax Department had 18 people go to jail, including the deputy director who had to go to jail for 4 years, even though he did not take any money. If the tax law says to refund tax but only verify the final seller, the tax officer did not violate the law, then we will do it immediately, but the tax law stipulates that if refund first, check later, it is 6 days, we comply, check first, refund later is 40 days”, the Minister of Finance emphasized.
Yesterday, discussing the socio-economic situation, delegate Mai Thi Phuong Hoa (Nam Dinh delegation) raised the issue of delayed VAT refunds, and difficulties businesses face with administrative procedures stemming from documents guiding the operations. According to Ms. Hoa, the report of the Finance and Budget Committee assessed the manual nature of the operations, the complexity and overlap of documents, and the lack of criteria for classifying risks in tax refund dossiers.
"In reality, some businesses complain that businesses that violate financial obligations to the state are strictly punished. However, businesses that have outstanding debts for basic construction capital and have their VAT refunds withheld, causing great losses, do not know who to complain to," said delegate Mai Thi Phuong Hoa, asking the Government to clarify the cause and come up with drastic solutions to handle this situation.
Regarding the proposal to reduce VAT by 2% (from 10% to 8%) for all goods, Minister Ho Duc Phoc said that this policy is implemented in accordance with Resolution 43. In particular, VAT will be reduced by 2% for groups of goods and services currently applying a value added tax rate of 10%, except for the following groups of goods and services: telecommunications, information technology, financial activities, banking, securities, insurance, etc. In addition, if reduced for all types of goods, it will also put pressure on the budget .
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