Guidance on developing state budget revenue estimates for 2024 in Vietnam

The construction of state budget revenue estimates for 2024 is carried out according to the instructions in Article 18 of Circular 51/2023/TT-BTC (taking effect on August 31, 2023), specifically as follows:

General principles when developing state budget revenue estimates for 2024 in Vietnam

- The 2024 state budget revenue estimate must be developed in accordance with the provisions of the 2015 State Budget Law, the Law on Tax Administration, the Laws on Taxes, Fees, and Charges, and other relevant legal documents, ensuring correct and complete collection of state budget revenues.

- Develop revenue estimates for 2024, closely following the socio-economic and financial situation at home and abroad, specifically calculating factors of increase, decrease, and shift in revenue sources due to changes in legal policies on revenue and revenue management, especially policies on exemption and reduction of taxes, fees, and charges, and extension of tax and land rent payment deadlines that expire in 2023. Implement the tax reduction and incentive roadmap to fulfill the Government's commitments in the process of international economic integration with foreign investors.

- Develop revenue estimates must be associated with the drastic implementation of administrative reform measures and the modernization of revenue management; strengthen management and prevent revenue loss, especially tax loss in business and real estate transfer; Effectively manage new revenue sources arising in the context of digital economic development and cross-border electronic transactions; Promote tax inspection and audit, combat transfer pricing, tax evasion, and tax fraud, drastically handle tax arrears, and strictly control tax refunds.

- Strive to estimate domestic revenue in 2024 excluding land use fees, lottery revenues, proceeds from the sale of state capital in enterprises, dividends, and after-tax profits, and the average difference in revenue and expenditure of the State Bank of the country increases by about 5-7% compared to the estimated assessment implemented in 2023 (excluding factors of increase and decrease in revenue due to policy changes); the revenue growth rate in each locality is consistent with economic growth and the revenue sources generated in each area, taking into account the factors of strengthening revenue management, preventing revenue loss, and collecting tax debt. Estimated revenue from import-export activities in 2024 will increase by an average of about 4-6% compared to the estimate implemented in 2023.

Guidance on developing state budget revenue estimates for 2024 in Vietnam (Internet image)

To develop domestic revenue estimates in Vietnam

- Localities that develop domestic revenue estimates for 2024, in addition to ensuring the above goals and requirements, must fully synthesize state budget revenue sources arising in the locality and exclude items that are not part of the state budget's balanced revenue according to the prescribed regime, on the basis of a full assessment of actual implementation in 2023 and the specialties of 2024 and the 2024 revenue estimate check number announced by the competent authority.

- State budget revenue estimates for 2024 must be built on the basis of information data systems on land and taxpayers; Ensuring correct and complete calculation of each revenue, tax, and revenue area for each area, and detailed revenue from newly put into operation projects with large revenue according to current regulations on taxes, fees, charges, and other state budget revenues; Details of each charge and fee according to regulations; Policy adjustment regulations, according to the roadmap, will continue to affect state budget revenue in 2024, and regulations are expected to be amended and applied in 2024.

- All revenues from the use of defense and security land according to the pilot mechanism in the management and use of defense and security land; Revenue from real estate rearrangement, disposal of public assets, revenue from leasing exploitation rights, and transfer of rights to exploit infrastructure assets for a limited time; State budget revenues from management and use of infrastructure assets invested and managed by the State in a manner that does not include State capital at enterprises and revenues from exploitation of land and water funds (after deducting relevant costs) must be fully estimated and paid to the state budget in accordance with the provisions of law. Revenue from ownership conversion of enterprises, public service units, transfer of state capital, and difference in equity capital greater than charter capital at enterprises is implemented in accordance with the provisions of Decree 148/2021/ND-CP.

- Estimate fees and charges (in the list prescribed by the Law on Fees and Charges) in detail for each revenue source according to regulations.

- Estimate other state budget revenues according to relevant laws (if any).

- For revenues not included in state budget revenue estimates of ministries, central agencies, and localities (fees, public services, tuition, medical service prices, and other legal revenues are left for agencies and units to use according to regulations), agencies and units must prepare their own estimates, explain the basis of calculation, and develop usage plans to send to superior management agencies and report to financial agencies at the same level according to regulations.

To develop budget revenue estimates from import and export activities in Vietnam

- Based on the forecast of growth in turnover of exported and imported goods with taxes in the context of integration, promoting trade promotion activities, and restructuring goods, especially traditional products that are the main source of revenue and new products that arise.

- Considering impact factors such as: expected fluctuations in domestic prices and international market prices of goods with large state budget revenues; fluctuations in crude oil prices in the world; exchange rates between Vietnamese dong and currencies of strategic trading partners; impact of revenue reduction from implementing the tariff reduction roadmap according to signed free trade agreements and implementing commitments in 2024; the level of trade facilitation and the impact of technical barriers; scale and implementation progress of key investment projects that import raw materials and equipment; production plans of domestic oil refineries.

To develop value-added tax refund estimates according to the provisions of the Law on Value Added Tax in Vietnam

Based on the actual situation and socio-economic development goals in the area; production and business plans of export enterprises, the total number of newly licensed projects and investment capital, the investment progress of ongoing investment projects and new investment projects, and investment projects that end the investment phase and move to the business operation phase in the area, it is possible to correctly, fully, and promptly calculate the value-added tax refund amount expected to arise in 2024 according to current policies, regimes, and new policy regimes in effect. Developing estimates of value-added tax refunds is associated with the need to strengthen tax refund management, supervision, inspection, and inspection after value-added tax refunds to ensure correct developments in reality, policies, and regimes.

To develop a non-refundable aid revenue estimate in Vietnam

The construction of the 2024 state budget revenue estimate for foreign non-refundable aid needs to be based on and closely follow the implementation of the 2023 state budget estimate (estimated amount assigned, amount of capital received from donors, amount of capital implemented); Documents of Programs, projects, non-projects, or aid approved by Vietnamese competent authorities; documents on aid commitments, letters of aid, or documents on donors' aid intentions; actual implementation progress; the possibility of new arising and implementation during the year; limiting the lack of estimates, leading to having to submit to the competent authority for additional or incomplete implementation, leading to canceling the estimate, or transferring sources. The process of developing state budget revenue estimates for foreign non-refundable aid capital needs to determine the nature of investment and regular expenditures, spending areas, and clearly delineate capital sources belonging to the central budget and targeted additional central budget sources for localities (if any).

For aid received since 2023 that is not included in the assigned estimate, ministries, central agencies, and localities will prepare and synthesize it into the 2024 estimate to submit to competent authorities for consideration and decision as a basis for performing accounting and settlement according to regulations.

Note: State budget revenue estimates (including domestic revenue and revenue from import-export activities) need to estimate tax refunds, late payment interest, and overpayment fines that reduce state budget revenue according to the provisions of the law.

Mai Thanh Loi

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