The Impact of Tax Breaks and Extensions on Vietnam’s Economy
The Vietnamese government has implemented a range of tax breaks and extensions to support its citizens and businesses. These measures have resulted in a total of VND 60.9 trillion in tax exemptions and reductions, and VND 28.9 trillion in tax extensions. The tax breaks include policies that were introduced and implemented in 2023, which will continue to be in effect in 2024, resulting in a revenue reduction of VND 8.7 trillion. Additionally, policies introduced and effective in 2024 are expected to reduce revenue by VND 52.2 trillion.
According to the Ministry of Finance, the central budget has allocated VND 9.8 trillion from its reserves to fund national defense and security tasks, as well as provide support to localities for important, urgent, and unexpected tasks. This also includes funding for disease prevention and control, and recovery of production after natural disasters and epidemics.
To ensure sufficient resources for budgeted expenditures and support for citizens and businesses, tax and customs authorities have implemented various solutions, including intensified inspections and audits, and recovery of tax arrears. As of August 15, the tax authorities have conducted 34,800 inspections and examined 365,300 business tax returns, resulting in financial proposals of approximately VND 30.9 trillion. This includes recommendations for central budget revenue collection of VND 9 trillion (with VND 6.3 trillion already collected), and reduction of VND 21.9 trillion in deductible and loss-making expenses. The estimated collection of overdue taxes by the end of August is VND 53.8 trillion (with the total domestic tax debt as of August 31, 2024, estimated at VND 206 trillion, an increase of 21.1% compared to December 31, 2023).
The customs authorities have conducted 1,109 inspections and collected VND 290.5 billion in revenues. They have also closely coordinated with functional forces to combat smuggling, trade fraud, and counterfeit goods, seizing 9,800 cases with a total value of VND 18.4 trillion and collecting VND 413 billion in revenues.
In addition to inspections and audits, the tax and customs authorities are implementing comprehensive and drastic solutions to enhance revenue management, prevent revenue losses, recover tax arrears, and strengthen control over tax declaration, payment, and refund processes. They are also focusing on promoting digital transformation and modernization of tax administration, including the expansion of e-invoicing.
According to the General Department of Taxation, 100% of retail gasoline and oil outlets nationwide have implemented e-invoicing for each sale. Additionally, 79,400 businesses, households, and individuals have issued e-invoices from cash registers, with a total of over 758.1 million e-invoices issued. All 9,400 gold business establishments have also applied for e-invoices with a connection to the tax authorities.
The Taxman Cometh: Scrutinizing the Livestream Sellers
The General Department of Taxation has instructed local tax authorities to scrutinize and compile a comprehensive list of all organizations and individuals engaging in live-stream sales within their jurisdictions.
“Vietnam: Poised to Move Up the Global Supply Chain Ranks”
With its favorable policies and inherent potential, Vietnam has become an attractive destination for foreign investors (FDI). The country is expected to experience a positive growth trajectory in FDI inflows during the remaining months of 2024. Amidst intense global competition to participate in global supply chains, Vietnam holds certain advantages that position it competitively.
The Capital’s Task Delegation: A Clear 6-Point Plan
To address the persisting issues in Hanoi, Prime Minister Pham Minh Chinh emphasized the need for heightened determination, greater efforts, and more forceful and focused actions. He stressed the importance of clear task delegation, ensuring that responsibilities, timelines, and expectations for outcomes are explicitly defined for each individual. This approach, he believes, will foster a culture of accountability and deliver tangible results.
The Economy’s Resurgence: A 7-Month Snapshot
“The socio-economic situation of our country over the past seven months has continued to exhibit positive trends across various sectors and fields, setting the stage for growth in the upcoming months and quarters.”
