Vietnam tax revenue down 1.4% in two-month period
The fact that nearly 19,800 enterprises temporarily suspended operation in the first two months of 2021, up 60.5% year-on-year, has also contributed to a decline in tax revenue.
The fact that nearly 19,800 enterprises temporarily suspended operation in the first two months of 2021, up 60.5% year-on-year, has also contributed to a decline in tax revenue.
The COVID-19 pandemic has created opportunities for a fairer, more robust and more efficient tax revenue and spending system.
Hanoi remains a spotlight with tax revenue of VND265.89 trillion (US$11.52 billion) in 2020, up 5.9% year-on-year.
Such increases have created a burden on the citizens, while multinationals are taking advantage of Vietnam’s incentive policies to avoid taxes.
Tax revenue in May suffered a sharp plunge of 36.9% year-on-year to VND58 trillion (US$2.52 billion).
Multinational companies have more favorable conditions in exercising tax avoidance, and to a larger extend, tax evasion, compared to their peers in the state and private sectors.
In this year's state budget plan, revenue from crude oil is predicted at VND35.2 trillion (US$1.5 billion), accounting for 2.3% of the total.
The figure is more than double the estimated losses from the municipal tax authority in its extreme scenario at VND16.6 trillion (US$712 million) where the pandemic lingers to the fourth quarter.
The declining trend in revenue collection is a source of concern as it has serious consequences for the fiscal policy conducted by the government, especially on its investment program.
Vietnam could get rid of its most large tax incentives without harming its growth or competitiveness, said an Oxfam expert.