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Covid-19 has a severe and comprehensive impact on tax revenue

The Covid-19 pandemic is having a most negative impact on the private sector Photo: Internet.

Revenues plunges in most major taxes

According to the General Department of Taxation, budget revenue in August hit nearly VND69 billion, or 6.2% of the estimate and 91.5% of the same period in 2020.

Speaking at the online meeting of the Ministry of Finance on September 7, General Director of Taxation Cao Anh Tuan said August's budget revenue has shown the heavy and comprehensive impact of the Covid-19 pandemic on most economic activities and budget revenues.

Revenue plummeted in most major taxes such as: value-added tax reached only 57% of the average revenue in the first seven months of the year; special consumption tax hit only 59.5% of the average revenue in the first seven months of the year; personal income tax reached only 60% of the average revenue in the first seven months of the year, and the environmental protection tax reached only 72% of the average revenue in the first seven months of the year.

Registration fee revenue in August only reached VND970 billion, a sudden low level since January 2020, more than VND2,300 billion lower than the average rate of the first seven months of the year.

The three economic sectors collected only VND24,700 billion in August, or 43% of the average revenue in the first seven months of the year.

State-owned enterprises; foreign-invested firms and private businesses earned, commerce, and services only reached 60%; 41%; 35.7%. This ratio also shows that the non-State sector is being hardest hit by the Covid-19 pandemic.

Notably, 23 localities that are implementing social distancing reported revenue in August only accounting for 55.6% of total revenue (a decrease of more than 10% compared to the result of seven months), said the tax official.

Inspection at the enterprise's headquarters almost "frozen"

Director General of Taxation Cao Anh Tuan said the Covid-19 pandemic not only affected business activities but also tax administration.

The inspection and examination faced many difficulties due to the pandemic. Inspections at an enterprise’s headquarters in 23 cities and provinces which are implementing social distancing are almost "frozen".

Further, the documentary check at the tax office is also restricted by the implementation of the social distancing, the number of tax officers at the office is limited.

Regarding tax debt collection, the tax sector collected VND 20,900 billion or 69.4% of the assigned target between January and August. However, the total tax debt of the sector still increased due to the turbulence of Covid-19 pandemic that forced many local governments to implement social distancing, affecting the tax debt collection.

The tax official said the complicated and unpredictable developments of the Covid-19 pandemic meant that budget collection in the remaining months of the year will still face many challenges.

The General Department of Taxation will request tax authorities at all levels to keep closely monitoring the situation of the pandemic in each locality and budget collection progress, proposing timely, effective and appropriate solutions.

In September, the General Department of Taxation has focused on completing and submitting to the Ministry of Finance for promulgation of a circular guiding tax administration; a circular guiding the collection of dividends and remaining profits; a circular guiding on invoices and vouchers; a circular guiding on value added tax; and focused on implementing the project on e-invoices.

Tax authorities at all levels will continue to urge the implementation of the State Audit's recommendations related to tax refunds, exemption, reduction, tax extension, anti-tax evasion and anti-transfer pricing in 2020; carry out conclusions of the Government Inspectorate, agencies; strengthen tax collection solutions for business activities through e-commerce platforms, and digital platforms; develop a plan to connect personal information provision through the e-commerce floors; direct and take measures to strengthen the management of value-added tax refund, focusing on areas and industries with high risks of tax refund, thereby contributing to accomplishing the assigned political tasks