The HCMC real estate sector has become robust in recent years, so industry employees have higher incomes, including salaries, wages and commissions. This situation has led to higher revenue from personal income tax, said Tran Ngoc Tam, director of the HCMC Tax Department.

Condo buildings are seen in HCMC. Revenue from personal income tax rises sharply, some comes from real estate sector

Speaking at a tax conference held on July 23 to review the results of the first half and the tasks for the second half of the year, Tam said his agency had collected VND130.55 trillion (US$5.6 billion) in taxes in the year up to late June, increasing by 11.4% over last year and meeting 48.6% of the annual estimate.

Notably, personal income tax collections posted the strongest growth, with a year-on-year increase of more than 21%. The tax revenue from salaries and wages contributed the largest proportion of 77%.

According to Tam, his agency has adopted various measures to collect personal income taxes. For instance, the application of the integrated tax administration system has enhanced the effectiveness of tax collection, with the number of taxpayers increasing significantly.

The revenue from value-added tax (VAT) increased by 15% over last year, of which collections from the foreign direct investment (FDI) sector and the non-State industry, trade and services sector accounted for a whopping 87% of the total VAT.

Moreover, corporate income tax revenue, which increased by 13% year-on-year, came mainly from centrally-governed State-owned enterprises and those in the non-State industry, trade and services sector, representing more than 59% of the revenue. However, tax contributions by the FDI sector edged down by 8% over the same period.

Speaking on the sidelines of the conference, the city tax chief stressed that local companies ensured they had less than 90 days’ worth of tax arrears so that they would not be subject to tax enforcement measures and were willing to pay daily late payment charges of 0.03%.

As such, the fine on late payments, equal to 0.9% per month, is still lower than the bank’s lending rates, and as a bonus, they do not have to meet any lending requirements to gain this advantage.

Tax authorities still classify items of tax debts, such as bad debts, debts pending solutions and recoverable debts. Their aim is to resolve and reduce debts. To this end, companies that owe large amounts of taxes will be outed in the mass media.

Regarding a back-tax lawsuit between ride-hailing firm Uber and the department, Tam said his agency is still waiting for the court’s decision. The organization intends to seek the support of the General Department of Taxation and the Finance Ministry as well as international cooperation.

According to Tam, since Uber sold its Southeast Asian business to its former competitor Grab, tax collection is now impossible.

SGT