According to General Director of Taxation Bui Van Nam, in the first six months of this year, the proceeds from the sale of state-owned shares in enterprises reached just 16.7% of the estimates, equivalent to the same period of 2016; the revenue from dividends and the profits of state-owned corporations account for 29.8% of the estimates, up 5.2%; collection of land use fees is estimated at 80.7% of the estimates, up 36.6%; and the remaining domestic revenues achieved 45.5%, up 10.5%.
In 2017, in accordance with the revised State Budget Law, additional revenue from lotteries was estimated at 67.4% of the budget, up 9.8%. Revenue from crude oil was estimated at VND23 trillion, equivalent to 60.1% of the estimates, up 15.6% over the same period in 2016. Meanwhile, revenue from import-export activities managed by customs offices was estimated at VND141 trillion, equivalent to 49.4% of the estimates, up 9.4% over the same period last year.
In the first six months of this year, import and export activities have continued to grow, contributing to the increase in State budget revenue. After reimbursing the value added tax (VND52.5 trillion), the State budget revenue from import-export activities reached VND88.5 trillion, 49.2% of the estimate, an annual increase of 22.2%.
However, the analysis of state budget revenue, in the first half of the year, showed that although domestic revenue increased by 12.4%, in comparison with the same period last year, it remained low in terms of budget implementation and growth rate compared to that of over the past three years (in 2014, the domestic revenue reached 52.9% of the estimate, up 19.9%; in 2015, 52.8%. up 18.6%, and 2016, 49.3%, up 14.8%).
The slight increase of State budget collection is attributed to the low growth rate of a number of industries such as hydropower, mining (oil, gas, coal, etc.), automobile production and assembly, mobile phone manufacturing, and food processing. According to the Ministry of Finance, gas exploration declined by 8.7%; coal mining increased by 2.8%, inventories were approximately 10.22 million tonnes; automobile production and assembly increased by 0.3%; mobile phone manufacturing increased 0.5%; cigarettes, 0.9%; and food processing, 5% .
There are also objective causes such as the decline in tax revenue from various projects such as Formosa in Ha Tinh province, Dung Quat oil refinery in Quang Ngai; Masan Brewery Company in Phu Yen; and from several hydropower companies in Hoa Binh, Son La, and Tuyen Quang provinces. In the first half this year, the total State budget collection reached VND563.5 trillion (around US$24.8 billion), equivalent to 46.5% of the estimates, up 13.9% annually.
Fifty four localities collected higher amounts in comparison to the same period last year. But, 18 of them failed to meet their targets (under 48%), while nine others collected less than the same period last year due to the low growth in a number of key sectors, including mining, hydropower, automobile production and assembling, mobile phone production, food production and processing. The budget spending was estimated at VND582.9 trillion (US$25.6 billion), equivalent to 41.9% of the estimates, up 8.3% from the same period last year.
This situation shows that the development of the economy is directly affecting the state budget revenue. While budget collection from land and service activities increased (over 52%), direct revenue from production and business has seen low growth. The financial sector should improve institutions and accelerate the administrative reform process, focusing on taxation and customs, thus improving the country’s business environment. Taxation and customs agencies should devise drastic and continuous measures to effectively manage tax payers and tax sources, in order to surpass the state budget collection targets in 2017.
More effective solutions should also be devised to overcome any existing shortcomings, including the slow progress in equitisation, divestment, reforming State-owned enterprises (SOEs) and disbursing public investment, among others.
