Pessimistic outlook for tax collection towards year end

October 10, 2022 - 08:06
Digital transformation has facilitated tax payment, giving a boost to tax revenues over the year. However, global economic uncertainties continued to depress Việt Nam's economy and offset the technological impact.


A grocer in Ninh Bình Provice fills tax forms online. VNA/VNS Photo

HÀ NỘI — Tax revenues grew on a yearly basis but were falling month-by-month, according to Deputy Director of the General Department of Taxation (GDT) Đặng Ngọc Minh.

Minh estimated nine-month tax revenues at over VNĐ1.1 quadrillion, up roughly 22 per cent compared to the same period last year.

The deputy director believed the rise in tax revenues could be attributed to the digital transformation in tax administration.

The launch of e-invoices, an e-Tax mobile application for individual taxpayers, and an e-Tax portal for foreign service providers have made tax payments possible everywhere. 

Specifically, e-invoices increased value added tax (VAT) collection in September by 13.8 per cent against the same month last year, even though VAT rates have been cut by 2 per cent on certain goods and services.

Thirty-six foreign service providers registered for the e-Tax portal after six months of its operation, paying over VNĐ1.2 trillion of tax to the State Budget.

"Six giants - Google, Meta (Facebook), Microsoft, TikTok, Netflix, and Apple - which collectively account for 90 per cent of e-commerce revenues in Việt Nam, has registered, declared, and paid their tax via the portal," he said.

Economic recovery is another factor contributing to the increased tax revenues. Remarkably, land use tax revenues surpassed annual targets by 50 per cent, personal income tax revenues by 33 per cent and excise tax revenues by 25 per cent.

However, the deputy director also admitted that monthly census told a different story.

Tax revenues topped VNĐ133 trillion in July but fell to around VNĐ106 trillion in August and plunged to approximately VNĐ79 trillion in September. 

He said the global uncertainties caused by the Russia-Ukraine conflict and the economic instability felt by many countries have caused a major impact on Việt Nam's economy, dragging down tax revenues in recent months.

He was concerned that the situation would remain tough towards year-end and the annual growth target of 15.5 per cent for 2022 seems not an easy task.

In his estimation, the target requires tax revenues of over VNĐ85 trillion per month in the next three months, nearly VNĐ5.5 trillion higher than September.

He called for three measures to be taken to this end.

First, tax authorities need to improve e-commerce tax collection in line with the governmental Official Dispatch 889, which stipulates that the authorities collect tax data from e-commerce platforms via digital means, establish an e-commerce tax database, and embrace data-sharing solutions.

Second, tax authorities need to develop e-invoice big data and employ data-analysis tools to facilitate tax administration. They also need to launch the "lucky invoice" programmes in 63 provinces and cities in October and introduce e-invoice generated by cash registers.

Third, tax authorities need to draw up new legal documents to ensure the sector be well-regulated. The general department of taxation completed three decrees, one decision and one circular in the first nine months of the year. One new decree and five new circulars are under development to date. 

The deputy director said tax authorities have made digitalised tax declaration, tax payment and tax refund available to over 99 per cent of firms so far. 

The general department of taxation has considerably improved administrative procedures by reducing the number of administrative processes from 304 to 234. All tier-3 and tier-4 processes have been moved to the national public service portal for the ease of taxpayers. — VNS