Hanoi eyes up to 9% year-on-year increase in tax revenue by 2023 amid rising global uncertainties and challenges from within the economy itself.  

Electronics production at Canon Vietnam, Thang Long Industrial Park. Photo: Thanh Hai

“Such an increase should not include revenue from land use rights, lottery and divestment from state-owned enterprises.”

The Hanoi People’s Committee released directive No.11 on drafting socio-economic development plans and the  budget estimate for 2023.

Accordingly, Hanoi aims to increase revenue from export-import activities by 4-6% compared to 2022.

The directive provided that the calculation of the 2023 estimate should closely follow the economic situation, avoid possible revenue losses and give room for businesses to recover following the severe impacts of the Covid-19 pandemic in the past years.

The directive urged local agencies to analyze both the global and domestic economic situations to assess the feasibility of  budget revenue target in the 2022-2023 period.

“The 2023 estimate should take into consideration possible impacts on the state budget, mainly due to changes in regulations on delaying payment, waiving, and freezing taxes; fees, land rental fees, along with the roadmap for tax reduction as part of Vietnam’s commitments in global integration,” noted the directive.

Taxation and customs authorities are responsible for working with other agencies in working out their respective estimates and ensuring effective tax management.

In line with such efforts, the local authorities need to step up administrative reform and modernize the budget collection, in order to avoid revenue losses from tax collection on commercial activities and real estate transactions.

The directive called for tightening supervision activities against acts of transfer pricing, and tax evasion, especially from e-commerce activities and business operations on the cyber platform;  tax arrears collection, and management of tax refunds.

Overall, the directive anticipated the local economy to face a difficult year in 2023, in which risks from geopolitical tension and rising inflationary pressure would continue to undermine the recovery of the global economy.

However, positive factors should come from the country’s stable macroeconomic conditions, the successful containment of Covid-19, and the implementation of the socio-economic recovery program.

Hanoi’s gross regional domestic product growth expanded by 9.49% during the second quarter, beating the expectation of 6.4-6.9% set in early 2022.

This resulted in Hanoi’s economic growth of 7.79% in the first half of 2022, a 1.29-fold increase against the same period of last year and higher than the 7.21% rate recorded in the six months of 2019 (before the pandemic).

The city is determined to maintain the growth momentum and strive for the GDP growth target of 7-7.5% for 2022.