Capital feels the heat

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In 2012, the Hanoi Tax Department was assigned by the municipal people’s committee to put VND131.9 trillion ($6.28 billion) into state coffers, surging 22 per cent on-year.

Based on sectors’ contribution from centrally-governed state-owned enterprises (SOE) must hike 21 per cent against 2011, corresponding figures for foreign-invested enterprises (FIE) and non-state businesses would be up 29 and 36 per cent against 2011, respectively.

If the tax amount subject to be exempted, reduced or extended in 2012 was not included, hikes in budget revenue from centrally governed SOEs must be over 30 per cent against 2011, and from FIEs and from non-state businesses up more than 50 per cent and 60 per cent, respectively.

“The task is extremely tough in the context local and world economies are  yet to get rid of the recession and firms are fraught with high lending rates and other unsettled problems,” said Hanoi Tax Department’s head Phi Van Tuan.

Relative to bank loans alone, non-state firms are incurring debts of VND1.1 million billion ($52.3 billion). With an estimated lending rate of 20 per cent per year these firms will have to pay VND220 trillion ($10.47 billion) in interest against a proposed profit figure of VND75 trillion ($3.57 billion) per year, according to Ministry of Finance’s deputy minister Do Hoang Anh Tuan.

Besides, continued public investment tightening policies will further affect firms’ production and business activities and property market performance, according to the tax department’s Tuan.

To make budget revenue objectives come true, right from early year the Hanoi Tax Department assigned budget revenue estimates to each member unit based on reviewing and appraising budget revenue collection capacity in specific area and firm, said Tuan.  

In addition, the department will scale up checks and inspections to avoid tax losses in business areas with high possibility for tax evasions such as property, motorbike and auto trading, hotel and restaurant business.