Some major fiscal policies meant to boost economic recovery will affect the city’s tax revenues in the coming time. — VNA/VNS Photo

HCM CITY — HCM City’s tax revenues rose in the first two months of the year as the economy showed signs of recovery.

But policies to boost economic recovery that are being implemented will affect revenues in the coming time, according to its Department of Finance.

Phạm Thị Hồng Hà, its director, said revenues are expected to top VNĐ88.044 trillion (US$3.85 billion) in the first two months, up 14.85 per cent year-on-year.

Personal income tax collection were worth VNĐ11.016 trillion ($483.02 million), a 16.61 per cent rise thanks to the recovering real estate market and good growth in production and business activities.

Vehicle registration fees went up by 50.3 per cent to VNĐ 1.42 trillion following a surge in demand for cars after Decree No 103 slashed them by 50 per cent in December.

Land-use fee collections, made one time at the beginning of the year, increased by more than 300 per cent to VNĐ 8.884 trillion.

But Lê Duy Minh, director of the Tax Department, said collections could fall significantly due to the implementation of some major fiscal policies meant to boost economic recovery.

For instance, the value added tax was reduced by 2 percentage points to 8 per cent in February and could mean a revenue hit of VNĐ8-10 trillion for the year, he said.

The Ministry of Finance has made a draft resolution for the National Assembly Standing Committee’s consideration on reducing the environmental protection tax on petroleum products by VNĐ1,000 per litre, he said.

The city is also considering a further cut in personal income tax, he said.

“These are expected to pull down the city's revenues in 2022. But these are necessary solutions to stabilise the markets and promote economic recovery, thereby making budget revenues more sustainable in future.”

The Government now wants the city to collect revenues of VNĐ386.57 trillion for the national exchequer this year, 5.9 per cent higher than earlier estimates.

For this, the city plans to focus on plugging tax losses by preventing transfer pricing frauds and other kinds of tax evasion, especially in e-commerce and real estate, the city finance department said. — VNS