Monday, 24 Jul 2017
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ECONOMY

Fostering sustainable revenue sources

Updated at Saturday, 08 Jul 2017, 10:11
The Hanoitimes - The state budget revenue in the first half of the year surpassed the estimate. However, the major source of revenue came from land use charges.
As a result, maintaining and expanding the sources of  revenue is the main task for the  Hanoi Tax Department and related agencies in the last six months of 2017.

Low contribution  from State-owned enterprises (SOE)

The  Director of Hanoi’s  Department of Finance Ha Minh Hai  said that since the beginning of the year, the Department and other related agencies have carefully assessed the  budget revenue performance in 2016, forecast  potential difficulties, established the Debt Collection Steering Board and revised the sources of revenue.

The state budget  revenue collected in Hanoi  is VND102,490 billion (roughly 4 billion dollars), reaching 50.1% of the estimation and outperformed the same period last year by 18% . Revenue from  land use charges reached nearly 66% of the estimate, personal income tax reached more than 50% of the estimation while the non-state industrial and service sectors also contributed significantly to the revenue.
 
South Tu Liem District Tax Department
South Tu Liem District Tax Department
However, revenue from the SOEs reached only 26.5% in comparison to the same period of last year, equaling 14,900 billion dong or roughly 700 million dollars. Manyhave to offset losses from previous years. Income tax payable in 2016 of some large enterprises when submitted to draw the balance sheet in the first quarter of 2017 decreased in comparison to that of the same period. For example, Viettel decreased by 650 billion VND; BIDV  by 134 billion VND; Vietcombank  by 205 billion VND and SCIC decreased by over 450 billion VND. Personal income tax in 2016 submitted in the first quarter of 2017 reduced by 550 billion VND.

Revenue from land use fees was high at 65.8% of the estimate. Meanwhile, the amount collected in the first half of the year was higher than expectation because some enterprises paid one-time rent for the whole 50 years of land rental. For example, VietinBank paid 275 billion VND and Ha Long Investment Development Corporation paid 625 billion VND.

To create a sustainable revenue stream

At the annual meeting of the Hanoi People’s Committee to review  the first 6 months of 2017, Chairman  Nguyen Duc Chung requested all agencies to pay attention to fostering and expanding sustainable revenue sources. The Hanoi Chairman  put the example of Nam Tu Liem District where despite having finalized  revenue collection in the first 6 months, the majority source of revenues is coming from land use charge. “ This  source of revenue will be over in the coming 3-5 years. So  all agencies have  support and create favorable conditions for business development. Strong enterprises will contribute  a steady and sustainable revenue source” – the Hanoi chairman emphasized. Besides, the leader of Hanoi also requested the Departments of Finance and Tax to ensure the completion of revenue collection; in turn make timely payment for civil works to speed up the implementation progress and increase disbursement rate in capital construction.

In the coming time, Hanoi will  put priority in improving business environment and striving to achieve 100% rate of online business registration.

In the first 6 months, total expenditure of Hanoi is estimated at approx. 27 trillion VND (equivalent to 1,2 billion USD), reaching 34,4% of estimation, up 16,6%, in which capital expenditure reached more than 11 trillion VND (equivalent to nearly 500 million USD). The amount is also equivalent to 33,4% estimation and up 14,4% in comparison with the same period of last year.
Nguyen Tung
Dinh Nguyen
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