Budget management in the challenging context

Pay attention to decreasing revenue

Based on the report of the Ministry of Finance (MoF), although the domestic revenue in the first 5 months of the year was quite good compared to the estimate, it was on a downward trend. According to the MoF, January revenue was 14.7%; February revenue was 7.7%; March revenue was 8.9%; April revenue was 9.9%; and May revenue was predicted to account for 6.4% of the estimate. Excluding corporate income tax, dividend income, remaining profits, and revenue and expenditure differences of the State bank, the 5-month domestic revenue stood at about 97.1% compared to the same period in 2022

Looking closely at revenue from three economic regions (which account for 53.3% of domestic revenue estimates), the 5-month revenue was anticipated to be 49.5% of the estimate, a 4.2% increase over the same period. However, excluding corporate income tax, which was quite comparable to the estimate because the enterprise has temporarily paid 3 out of 5 periods as prescribed, the revenue of these three areas decreased by 10.3% compared to the same period in 2022.

According to a closer examination of local revenue, 17 out of 63 localities achieved 48% of the estimate in 5 months; 13 out of 63 localities experienced revenue growth over the same period in 2022, while up to 50 localities experienced lower revenue in comparison with the same period last year.

The leaders of tax and customs units just clarified the reasons why the state budget revenue declined over the same period last year during a recent meeting of the working committee to look back on the results of the 5 months and implement the future tasks of the MoF. According to the acting Director General of the General Department of Taxation, Mai Xuan Thanh, the Tax Department's budget revenue for the first five months of 2023 was estimated to be 663,843 billion VND. This revenue accounted for 48.3% of the ordinance of estimates, equivalent to 96.9% over the same period.

Budget management in the challenging context

“State budget revenue is still on track, but it is the lowest throughout 14 years when compared to previous years”, demonstrated Mr. Mai Xuan Thanh. If the revenue generated by quarter, month, and sudden revenue is excluded, the monthly revenue movement is still on the decline, and the forecast for the coming months shows no signs of improvement.

Similarly, budget revenue from import-export activities managed by the Customs sector fell by 6.23% in May 2023 compared to the previous month. Accumulated revenue in 5 months reached 152,942 billion VND, equal to 36% of the estimate, down 18% from the same period last year.

The whole financial sector endeavors to manage budget revenue

According to the Deputy General Director of the General Department of Customs Hoang Viet Cuong, the reason for the lower revenue in May 2023 was due to a decline in the taxable import turnover of some goods with significant revenue. For example, cars of all types reached 7.6 thousand units, worth 189.5 million USD, down 37.8% in volume and 33.6% in value, reducing revenue by 1287 billion VND. Iron and steel of all kinds reached 675 tons, worth 555 million USD, below 22.1% in volume and 16.7% in value, equivalent to 253 billion VND. Phone and components reached 166 million USD, which fell by 27.1 %, equal to 180 billion VND. Representatives from the General Department of Customs also stated that the reduction in budget revenue for the following month was greater than the previous month and greater than the same period last year.

Revenue estimates have been decreasing since the beginning of the year, according to the heads of the Tax and Customs sector. In March 2023, when re-evaluating the budget revenue from import-export activities, the General Director of the General Department of Customs Nguyen Van Can predicted that revenue from import-export activities would not increase significantly from that time until June 2023 due to non-mutant orders. However, as businesses expand their production in the last few months of the year, the situation will improve.

According to the leaders of the General Department of Taxation, the revenue managed by the tax sector was estimated to be 663,843 billion VND, equivalent to 48.3% of the ordinance of estimates, which has represented a significant effort on the part of the unit so far.

The Tax Department held numerous conferences to discuss solutions to increase budget revenue, in the spirit of reviewing all receivables and potential amounts. At the same time, the General Department of Taxation organized collection by lump sum to each unit towards the goal of completing the budget revenue task albeit with current difficulties. The Tax Department's head confirmed that the tax authority will closely monitor the situation to obtain the assigned estimate.

Since the beginning of the year, the Customs sector has actively directed local customs departments, particularly the 8 major customs departments, to implement various solutions to increase budget revenue due to the challenging situation of state budget revenue from import and export activities. Customs authorities have held meetings with businesses, particularly in areas with high import-export turnover, removing obstacles for businesses, stimulating import-export activities, and contributing to increased state budget revenue.

In the future, the Tax and Customs sector will continue to synchronously implement solutions, create favorable conditions for the business community, particularly deal with challenges in implementing tax payment and specialized inspection procedures; at the same time, strengthen the fight against tax revenue deficit; strengthen discipline in the performance of public duties.