Identifying factors affecting budget revenue in the first 6 months of the year in Nghe An

The results

State budget revenue in Nghe An in the first 6 months of the year is estimated at 8,489 billion VND, reaching 53.5% of the estimate assigned by the Provincial People's Council and equal to 80.6% compared to the same period in 2022; thus, it has not reached the scenario set out (9,600 billion VND) by the Provincial People's Committee.

Of the total budget revenue for the first 6 months, domestic revenue for the first 6 months reached VND 7,858 billion, reaching 53.9% of the estimate and equal to 82% compared to the same period in 2022. Excluding land use fees and lottery fees, domestic revenue for the first 6 months reached VND 5,558 billion, reaching 50.3% of the estimate and equal to 88.5% compared to the same period in 2022.

Causes affecting the numberbudget revenue

The economic situation is still facing many difficulties, the impact of conflicts, the consequences of the Covid-19 pandemic, the world economy recovering more slowly than previously forecasted, affecting production, business and budget revenue. Tight monetary policy has a stronger impact on businesses, economic activities, investment and global consumption; many major economies are slowing down, even falling into recession, while inflation remains high, risks in the banking system, public debt, corporate debt, etc. are increasing; developing a green economy and protecting the environment is both an opportunity and a challenge when many developed countries use it to create import barriers.

In the country, the economy is open, in the process of economic and social recovery and development; cultural and social activities return to normal. However, the prices of some input goods have increased, especially gasoline prices, and the local shortage of labor resources has affected the production and business activities of enterprises and people. In Nghe An, many new projects have been and are being started, but have not yet come into operation.

“State budget revenue in the first 6 months of 2023 is lower than the same period, the first reason: Due to the Government's policy of exempting, reducing, and extending a number of tax collections such as: 50% reduction of environmental protection tax on gasoline, oil, and grease according to Resolution 20/2022/UBTVQH15, Resolution No. 30/2022/UBTVQH15 of the Standing Committee of the 15th National Assembly; 30% reduction of land rent and water surface rent payable in 2022 for subjects affected by the Covid-19 epidemic. Second: The real estate market has cooled down, leading to a significant decrease in land use fees, corporate income tax, personal income tax from real estate transfer, land and house registration fees, and non-agricultural land use tax. Third, most key enterprises producing key products in the area are facing difficulties in production and product consumption, reducing the amount of state budget revenue”.

Mr. Nguyen Dinh Duc - Director of Nghe An Tax Department

Reality shows: The cooling down of real estate has led to stagnation in many industries such as cement, brick, construction steel production, restaurants, and catering services. Many factories have cut labor due to lack of orders, maintaining production enough to pay workers' salaries. Revenue from import and export activities mainly comes from mineral products (export of all kinds of stones); imported goods such as: Machinery and equipment, aluminum, steel, electronic components, gasoline, wood, etc. However, this sector also decreased revenue due to difficulties in business of enterprises importing steel and aluminum as raw materials for production, unable to export aluminum and steel products, so the amount of aluminum and steel imported in the first 6 months of the year decreased significantly compared to the same period in 2022; International oil prices are currently higher than domestic oil prices, and enterprises importing very few oil and gasoline compared to the same period in 2022 (only 16 billion VND was imported in the first 6 months of the year). Wood import turnover also decreased compared to the same period in 2022.

Transport businesses in the area are also starved of orders due to slow consumption of beer, materials, and white stone, with transport capacity reaching only 70%-80% compared to the same period, leading to a sharp decrease in budget payments. In localities, the organization and collection of money for land use rights auctions in the area is slow, real estate transfer activities in the area have decreased, making it difficult to attract participants. The number of cars registering and paying registration fees has decreased. In the first 5 months of 2023, car registration fees have decreased by about 56 billion VND.

Some key enterprises in the local budget revenue collection also decreased sharply: The consumption output of 3 beer companies decreased by more than 11 million liters compared to the same period, reducing the amount paid to the state budget by nearly 154 billion VND; cement companies reduced the amount paid by 93 billion VND; Masan Company decreased by 57 billion VND...

Promote solutions

Budget collection is a very important task to ensure the balance of revenue and expenditure. In the context of economic difficulties, removing difficulties for production and business is given top priority. Nghe An province has established working groups to directly go to localities to remove difficulties for production, speed up public investment progress, and speed up project progress. The Department of Finance coordinates with Tax and Customs agencies to monitor the budget collection situation in the locality, directs the budget collection work of districts, develops solutions to remove difficulties, increase budget collection to advise the Provincial People's Committee to manage in each specific arising situation.

To complete the domestic budget collection plan, Mr. Nguyen Dinh Duc - Director of Nghe An Tax Department said: The Tax sector will review and closely evaluate the ability to collect the State budget in 2023 in accordance with the economic growth situation in the area, the ability to develop production and business and collect budget of organizations and individuals; at the same time, it is necessary to analyze, evaluate, calculate and fully identify factors affecting the budget collection results in the year such as economy, mechanisms, policies, and strive to complete the budget collection task.

Continue to effectively implement tax support solutions according to Resolution No. 43/2022/QH15 of the National Assembly; Resolution No. 11/NQ-CP, Decree No. 32/2022/ND-CP, Decree No. 34/2022/ND-CP of the Government, contributing to supporting businesses and people to quickly restore production and business activities, creating a premise to increase revenue for the State budget.

The Tax sector promotes administrative reform, effectively implements the Tax System Reform Strategy until 2030, facilitates taxpayers, and provides maximum support to businesses in carrying out tax procedures. Strengthens tax refund management, ensures the right subjects and compliance with the State's legal policies, and creates favorable conditions for taxpayers.

The industry focuses on human resources to speed up the progress of tax inspection and examination, striving to complete the inspection and examination plan for 2023; continue to focus on inspection, examination, and prevention of revenue loss for enterprises in high-risk industries and fields, enterprises refunding VAT on exported goods, enterprises exempted from or reduced from tax, enterprises with affiliated activities, showing signs of transfer pricing; e-commerce business activities, business on digital platforms, capital transfer, projects...; focus on collecting information, building business databases; assigning responsibility to management staff for enterprises with high tax risks but not promptly detected, leading to tax loss and risks in tax management. Continue to strengthen the review and examination of electronic invoices to prevent fraud in the use of invoices to prevent revenue loss for the budget.

In addition, resolutely implement solutions on management and tax debt collection according to the direction of the General Department of Taxation.

Reality shows that Nghe An still has room for development and budget revenue potential, which are construction projects in newly operational industrial parks, newly issued investment attraction support policies for production, and projects under urgent construction, which are also factors that increase budget revenue in the last 6 months of 2023.

Right from the beginning of the year, identifying the political tasks, Nghe An Tax Department has promptly deployed the task of budget collection, assigned emulation targets on inspection, examination, internal examination, submission of tax declarations, electronic tax declarations and payments, and reform of administrative procedures to the departments and Tax Branches for implementation; assigned budget collection targets to the departments and Tax Branches in the area. Advised the Provincial People's Committee to issue Directive No. 01/CT-UBND dated January 12, 2023 of the Provincial People's Committee on strengthening the work of collecting state budget and collecting social insurance and health insurance in Nghe An province in 2023. Issued the plan for administrative reform of the Tax sector, the plan for deploying information technology of Nghe An Tax Department and the plan for legal education and legal support for businesses in 2023 while implementing other solutions to carry out the task of budget collection. Localities also vigorously participated in this work.