IT expansion plays part in state budget revenue rise

The Ministry of Finance (MoF) last week reported updated figures in budget state revenue for 2024. Total revenue reached $81.75 billion, up by $13.7 billion or 20 per cent over the initial estimate, and by $6.82 billion or 8.4 per cent as compared to the sum earlier reported to the National Assembly (NA).

Central budget revenue hit $41.6 billion, up over $3 billion compared to the sum earlier reported. Meanwhile, local budget revenue stood at $40.15 billion, up by $3.72 billion – which does not take into account money collected from land use, lottery, and equitisation and divestment of state-owned enterprises.

The MoF also reported that in the first four months of this year, total state budget revenues are estimated to have come in at $37.76 billion, up 26.3 per cent on-year.

However, according to the MoF, total state revenues would have been higher if no supportive fiscal policy was applied to assist enterprises.

“The government has directed to focus on the assigned task of collecting the state budget, and at the same time, to continue to implement policies to reduce and extend taxes, fees, charges, and land rental to support businesses in removing difficulties in production and business activities, and in socioeconomic recovery and development,” stated Minister of Finance Nguyen Van Thang. “The estimated reduction and extension of taxes, fees, charges, and land rental for the first four months is about VND67 trillion ($2.68 billion).”

This support policy included $1.2 billion worth of tax, fee, and charge reduction, and $1.49 billion for extension of taxes and land rentals.

In 2024, such a policy cost about $7.9 billion, which led to a reduction of $3.95 billion – including $2.05 billion worth of a 2 per cent VAT decrease and $1.61 billion from environmental protection tax reduction. Extension of taxes and land rental was valued at $3.94 billion.

The MoF has ascribed the success in state budget collection to various reasons, one of which is the boosted application of IT and digital transformation.

“We have continued to expand the provision of electronic tax services to taxpayers, and deploy the electronic tax declaration system at all tax departments and tax branches,” Minister Thang stated. “Almost all tax administrative procedures have been implemented in the electronic environment.”

Under the MoF’s calculation, all enterprises in Vietnam have been using electronic tax declaration services, while 99 per cent of businesses have registered to use electronic tax payment services with tax authorities, 99.7 per cent of enterprises have completed registration for electronic tax payment services with banks, and 99 per cent of businesses have participated in electronic tax refunds.

“We have also continued to deploy the eTax mobile app for individuals and business households. Furthermore, we have also carried out information data portal on e-commerce platform and electronic invoices with tax authority codes generated from cash registers for businesses and business households operating and providing goods and services directly to consumers,” the ministry said.

The MoF’s calculations have shown that from December 15, 2022 to the end of this January, more than 94,400 businesses have registered to use the electronic invoice system generated from cash registers which were used by over 64,400 businesses. The number of electronic invoices generated from cash registers was 1.54 billion. In 2024 alone, an additional 52,660 businesses registered to use electronic invoices generated from cash registers.

The application of electronic invoice system nationwide has also been expanded. It is calculated that by late December 2024, the number of electronic invoices issued mounted to more than 11.12 billion, including 2.7 billion invoices with codes, 7.3 billion without codes, and 2.1 million invoices for each occurrence.

In 2024, the tax agencies conducted more than 72,000 inspections and examinations which examined 730,000 tax declarations of enterprises. This led to handling about $3.04 billion in finance, of which about $800 million was collected for the state coffers – of which $536 million was already paid to the budget.

Under the NA’s resolution last November on the state budget estimates for 2025, the total fiscal deficit for the year will be $24.25 billion, which is tantamount to 3.8 per cent of GDP, and will “still ensure safe thresholds for public debt, government debt, and the country’s debt”.

Total state budget revenues are set to reach about $81.95 billion, up 15.6 per cent as compared to the estimates in 2024 and up 5 per cent as compared to the estimated implementation last year.