Resolution 159/2024 on the state budget estimate for 2025 promulgated in Vietnam? Shall the tax authority organize state budget revenue collection in Vietnam?

Resolution 159/2024 on the state budget estimate for 2025 promulgated in Vietnam?

On November 13, 2024, the National Assembly passed Resolution 159/2024/QH15... Download regarding the state budget estimate for 2025.

Specifically, the 2025 state budget estimate includes:

- State budget revenue is 1,966,839 billion VND (one trillion, nine hundred sixty-six billion, eight hundred thirty-nine billion VND).

- The use of 60,000 billion VND (sixty thousand billion VND) central budget accumulation resource for wage reform and 50,619 billion VND (fifty thousand six hundred nineteen billion VND) local budget wage reform resource remaining until the end of 2024, transferred to the 2025 estimates for Ministries, central, and local agencies to implement a statutory pay rate of 2.34 million VND/month.

- The total state budget expenditure is 2,548,958 billion VND (two trillion, five hundred forty-eight billion, nine hundred fifty-eight billion VND).

- The state budget deficit is 471,500 billion VND (four hundred seventy-one thousand, five hundred billion VND), equivalent to 3.8% of the Gross Domestic Product (GDP), including:

+ Central budget deficit of 443,100 billion VND (four hundred forty-three thousand, one hundred billion VND), equivalent to 3.6% of GDP;

+ Local budget deficit of 28,400 billion VND (twenty-eight thousand four hundred billion VND), equivalent to 0.2% of GDP.

- The total borrowing of the state budget is 835,965 billion VND (eight hundred thirty-five thousand, nine hundred sixty-five billion VND).

Moreover, regarding the implementation of wage policy and some social policies, the National Assembly also approved:

- No increase in public sector salaries, pensions, social insurance allowances, monthly allowances, and preferential allowances for people with meritorious services in 2025.

- Ministries, central, and local agencies continue to implement solutions to create resources for wage policy reform according to regulations. It allows excluding some revenue when calculating the increase in local budget revenue dedicated to wage reform as prescribed in Clause 2, Article 3 of Resolution 34/2021/QH15 dated November 13, 2021, of the National Assembly.

- Permitting the expansion of the use of central budget accumulation resources for wage reform from July 01, 2024, to adjust pensions, social insurance allowances, monthly allowances, preferential allowances for people with meritorious services, and streamlining staffing; allowing the use of local budget wage reform resources for implementing social welfare policies issued by the Central Government and streamlining staffing.

- Allowing localities to use surplus wage reform resources to invest in regional and national connection projects, key national projects implemented locally as per regulations of competent authorities in cases where localities have significant surplus resources, guaranteeing wage reform funding and implementing social welfare policies issued by the Central Government for the entire pathway to 2030, and not requesting central budget support.

Thus, the statutory pay rate for 2025 will remain the same at 2.34 million VND/month as of July 01, 2024.

See the state budget estimate in Resolution 159/2024/QH15... Download

Official Resolution 159/2024 on the state budget estimate for 2025 promulgated in Vietnam? (Image from Internet)

Vietnam: What does state budget revenue include?

Based on the provisions of Article 2 Decree 163/2016/ND-CP, state budget revenue includes the following items:

(1) Taxes paid by organizations and individuals as prescribed by tax laws.

(2) Fees paid by organizations and individuals as prescribed by law.

(3) Fees collected from service activities performed by state agencies; in cases where operating costs are covered, they may be deducted.

(4) Fees collected from service activities performed by public service providers and state-owned enterprises, after deducting the portion retained to cover costs as prescribed by law.

(5) Contributions to the state budget from the economic activities of the State, including:

- Dividends and other revenues from oil and gas exploration and exploitation activities;

- Recovery of capital invested by the State in economic organizations;

- Collection of dividends, profits divided from joint-stock companies, and limited liability companies with two or more members with State-contributed capital;

- Collection of remaining post-tax profits after setting aside funds for state-owned enterprises;

- Revenue surplus over expenditure of the State Bank of Vietnam;

- Recovery of loans given by the State (including both principal and interest), excluding re-borrowing of foreign loans of the Government of Vietnam.

(6) Mobilization of contributions from agencies, organizations, and individuals as prescribed by law.

(7) Revenue from the sale of state-owned assets, including revenue from the transfer of land use rights, change of land use purpose managed by state agencies, units, and organizations.

(8) Land use fees; land and water surface rental fees; marine area use fees; rental and sale of state-owned housing.

(9) Revenue from assets established as State ownership; fees for mineral exploitation rights, fees for water resource exploitation rights.

(10) Money collected from administrative penalties, fines, and other confiscations as prescribed by law.

(11) Voluntary contributions from domestic and international organizations and individuals.

(12) Non-reimbursable aid provided by the Government of Vietnam to other countries, organizations, and individuals outside the country for the State, the Government of Vietnam, and local state agencies.

(13) Revenue from the financial reserve fund as prescribed in Article 11 State Budget Law 2015.

(14) Other revenues as prescribed by law.

Shall the tax authority organize state budget revenue collection in Vietnam?

Based on the provisions in Clause 1, Article 55 of the State Budget Law 2015 as follows:

Organizing State Budget Revenue Collection

1. Revenue collection agencies are financial agencies, tax agencies, customs agencies, and other agencies authorized or assigned by competent state agencies to perform state budget revenue collection tasks.

2. Only revenue collection agencies can organize budget revenue collection.

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Thus, based on the above regulations, the tax authority is authorized to organize state budget revenue collection.