State budget revenue unlikely to reach 2020 plan due to COVID-19: Minister

It is unlikely that State budget revenue will reach the 2020 target approved by the National Assembly of over VND1.51 quadrillion (US$64.89 billion) due to the impact of COVID-19, Minister of Finance Dinh Tien Dung has said.

state budget revenue unlikely to reach 2020 plan due to covid-19: minister hinh 0

Vietnam has seen significant declines in State budget revenue since the beginning of the year as a result of business and production stagnation, while the State budget is funding a number of relief packages to recover industries and businesses.

According to the General Statistics Office, as of June 15 State budget revenue totalled VND607.1 trillion, equivalent to 40.1% of the annual target. The figure included VND503.8 trillion in domestic collection and VND20.2 trillion from crude oil, equal to 39.9% and 57.5% of targets, respectively.

This year’s State budget revenue will fall because of low economic growth, plunging oil prices and, in particular, tax cuts introduced to ease the burden on enterprises and household businesses from the outbreak, Dung said.

Many companies have scaled down production in the face of weakening demand and disruptions to supply chains, putting enormous pressure on the State budget, he explained.

The Ministry of Finance has proposed the Government waive or cut taxes and fees to support those affected by COVID-19, worth a total of about VND200 trillion, he continued, citing a five-month extension for the payment of taxes and land use fees as an example of such measures.

The ministry also suggested providing tax exemptions on imported medical materials and equipment for the COVID-19 response and imports of materials for various industries, including footwear, textiles and garments, processing of agriculture, forestry and fishery products, mechanical engineering, support industries, and automobiles, he added.

Dung further noted that the ministry has put extra effort into restructuring State budget revenues, with the proportion of domestic collections expanding from around 68.7% of the total during the 2011-2015 period to 81.5% in 2016-2020.

The ministry is set to raise domestic collections to 84% of the total this year, he said.