Reducing 200 trillion VND in taxes for businesses
Sharing with the press on the first day of the Lunar New Year of Giap Thin 2024, Minister of Finance
Hồ Đức Phớc
said that the results of import and export
of the whole year 2023 reached 683 billion USD, decreased by 6.6% compared to the previous year (in 2022 reached 732.5 billion USD). However, due to the faster decrease rate of import than export, the trade balance of goods in 2023 still had a surplus of 28 billion USD, far exceeding the number of 11.2 billion USD in 2022.
In the past year, the Government has made determined efforts to create favorable conditions for businesses, especially import-export businesses, to create a driving force for economic growth.
“Why when the economic growth rate is only 5.05%, but budget revenue still increases rapidly. Meanwhile, the Government still reduces taxes for businesses up to about 200 trillion VND. So where does the revenue come from? We support businesses to the maximum, but in the implementation process, we have been creative and innovative in revenue management,”
Minister Hồ Đức Phớc said.
Minister Hồ Đức Phớc affirmed that reducing taxes alone is not enough to help businesses overcome difficulties.
Leaders of the Ministry of Finance gave an example that in 2023, there were 73 foreign enterprises, including large enterprises such as Google, Meta (Facebook), Microsoft, TikTok, Netfix, Apple, etc., that have registered and declared and paid taxes through the Portal.
In addition, the tax authorities have implemented the issuance of electronic invoices and tightened the management of electronic invoices, increasing revenue for the state budget. In addition, the tax authorities have closely managed the issue of tax refunds, the prevention of transfer pricing, as well as connected data integration with cash registers and issuance of lucky draw invoices…
“Those solutions have brought revenue to the state budget, in addition to deploying solutions to expand, postpone tax fees in recent years,”
Minister Phớc affirmed.
According to Minister Hồ Đức Phớc, in 2024, the Ministry of Finance proposed and the National Assembly decided to reduce the VAT tax rate by 2% for all goods and services subject to a tax rate of 10% (reduced from 10% to 8%). In addition, the Ministry of Finance continues to propose reducing environmental taxes on gasoline and reducing fees, charges, and reducing 30% of land rent to support businesses and the economy in difficult periods.
However, in order to solve the difficulties for businesses, not only tax reduction measures are needed, but also many other solutions such as: removing legal obstacles, opening consumption markets, credit and banking; or removing obstacles through simplifying and reducing administrative procedures…
“Therefore, many solutions are needed to support businesses in overcoming difficulties, along with financial solutions to ensure low budget deficit and stable revenue through stable tax solutions.”
emphasized leaders of the Ministry of Finance.
At the same time, he emphasized:
“In theory, in the short term, we can reduce taxes to support businesses, but in the long term, to strengthen the power of public finance, ensure low budget deficits, there must be financial solutions to stabilize taxes.”
Tax deferral and tax reduction policies have helped businesses overcome difficulties, stabilize production, and business operations.
Financial market transparency
Sharing the story of public debt, Minister Hồ Đức Phớc said that in recent times, Vietnam’s public debt has been highly appreciated by international organizations. According to statistics, Vietnam’s public debt tends to decrease, from 61.4% of GDP (in 2017) to 58.3% of GDP (in 2018), 55.9% of GDP in 2020 and 43.1% of GDP in 2021. In 2022, the public debt level is estimated to be equivalent to 2021, about 43-44% of GDP. The scale of public debt by the end of 2023 is about 37% of GDP, much lower than the ceiling of 60%. Government debt is about 34% of GDP, much lower than the ceiling of 50%. This debt surplus is much lower than the average level in 2023 of countries with BB credit ratings, which is 52.8% of GDP, and BBB 54.9% of GDP.
“Looking at those figures, we see that there is still a large potential for us to mobilize public debt to serve essential infrastructure projects, infrastructure projects, and development creation in the future. When those projects come into operation and achieve the highest efficiency, they will contribute to the highest development of the economy,”
the Minister said.
Regarding management solutions for the corporate bonds market to regain the trust of investors,
,
the Minister of Finance believes that
,
corporate bonds are a good capital mobilization channel. In recent times, the management of the corporate bonds market has been implemented systematically, accurately, and properly.
The Ministry of Finance has advised the Government to issue Decree 08/2023/NĐ-CP and strengthen inspection and examination work, creating conditions for businesses to mobilize capital, while establishing order and discipline to make the financial market transparent.
“With respect to individual corporate bond mobilization channels, according to our strategy, we will mobilize about 25% of GDP. At present, the outstanding corporate bond debt is about 1,000 trillion VND, which is less than 10% of GDP. So, we still have about 15-16% of GDP in potential to mobilize individual corporate bonds to serve the economic and social development of the country, solve difficulties, and develop businesses,”
the Minister stated.
However, the implementation must follow the regulations of the law, in the spirit that businesses borrowing money from the people must repay the people on time and implement the purpose of the loan correctly, without using this loan for other borrowings and unable to repay the debt, causing loss of trust of the people and investors, affecting the corporate bond market.
