Low budget revenue in the first quarter - A sign of deep economic decline

(Baonghean) -Normally, the first quarter of each year is the "biggest revenue" quarter for the tax industry, because it focuses on the Tet months, when businesses collect money and goods. However, this year, in January 2012, Nghe An's budget revenue was only 20% compared to the same period in 2011. In the first 3 months of 2012, the estimated revenue reached nearly 1,000 billion VND, equal to 15.1% of the plan assigned by the Provincial People's Council.

Vinh City Tax Department - the unit that concentrates a large amount of revenue of the whole province, in the first quarter of 2012, the revenue only reached 10% of the yearly plan and equal to 8% compared to the same period with regular revenue of 145 billion VND, including land revenue of 15 billion VND. Mr. Cu Huy Hung - Head of Vinh City Tax Department said: Not only land use tax revenue decreased, but other business sectors also suffered losses, purchasing power decreased sharply. Typically: cars, restaurants, hotels, entertainment, tourism, services....

For example, in January 2011, city residents paid registration fees for 543 cars at the tax office, the tax collected was 25.4 billion VND. In January 2012, only 201 cars were sold, the tax collected was only 9.2 billion VND. In February 2012, 170 cars were sold, in March 2012, it decreased to 120 cars, the tax collected was 5.8 billion VND.

Motorcycle sales also decreased by 40% compared to the same period last year. Entertainment services are deserted, many restaurants with large investments are losing money due to lack of customers, the construction sector cannot recover money, and debts are increasing. Gold, silver, and land trading is stagnant... All of these have caused the revenue of the department to decrease sharply, and the growth rate has decreased compared to many years ago.

Currently, the outstanding debt under the management of the department is over 120 billion VND, including the entire province, the outstanding tax debt up to February 2012 is approximately 1,000 billion VND. Many units have large outstanding debts of over 1 billion VND such as: Tuan Cuong Construction Joint Stock Company, I and D Company Limited, Thang Long Design Consulting Joint Stock Company, Tien Luc Joint Stock Company, Asia Trade Development Investment Joint Stock Company, Sara Joint Stock Company... In the entire province: In the first 3 months of the year, the estimated revenue reached nearly 1,000 billion VND, equal to 15.1% of the plan and 34.5% compared to the same period. Many revenue items are low, especially the land use fee due to the frozen real estate market.

The sharp decrease in revenue shows that Nghe An's economy has been adversely affected by the economic recession. Businesses are facing many difficulties, with increasingly large impacts: recession, investment cuts according to Resolution 11, freezing of the real estate market, bankruptcy, broken savings and credit association, reduced purchasing power, increased loan interest rates, costs remain high, especially recently, costs of gasoline, oil, electricity, salaries... have increased while consumption of goods and services has decreased due to limited money sources.

In that situation, tax arrears increased despite the application of many drastic measures. Up to now, construction enterprises are at the top of the list of arrears. Most enterprises cannot recover capital, cannot find jobs at the end of the year, and the number of enterprises closing down is increasing.

In 2011, facing many difficulties, the Tax sector advised the Provincial People's Committee on a series of policies such as: adjusting the land rental price in 2011 down, reducing the land rental coefficient to the lowest level in the Government's regulation framework of 1.56, reducing 30% of corporate income tax for small and medium enterprises, reducing 50% of land tax for some enterprises in 2011 and 2012. Guiding enterprises to extend the payment of Value Added Tax for basic construction enterprises using budget capital. The sector has also drastically applied measures to manage collection, exploit revenue sources, prevent budget losses and achieved positive results, contributing to the completion of the 2011 budget collection plan. However, currently, there are still many enterprises with tax arrears, of which many units are slow to pay and show signs of appropriation because borrowing from banks is still very difficult.

According to Mr. Cu Huy Hung: In the near future, the Department will organize a dialogue with businesses with tax arrears to find out the cause, grasp the situation, and encourage businesses to pay taxes promptly. For those units that are procrastinating, enforcement will be carried out.

Chau Lan