Hanoi is facing a tax shortfall from local businesses, especially in real estate, as the country continues to battle the global economic downturn, according to the city’s Taxation Department.

As of May, the city tax department had collected 1.873 billion VND (89 million USD) in land use tax, just 61 percent of the figure from the same period last year.

Tax collection from land leases jumped by 495 billion VND - an increase of 31.35 percent over the same period last year - but only accounted for 45 percent of the total estimated tax collection.

Tax collection from non-agricultural land use is estimated to raise 42 billion VND, accounting for 17.1 percent of the total collection.

The Hanoi Taxation Department said it has continued to work closely with relevant agencies in managing State revenues in order to promptly collect arrears.

The department predicted that if the real estate market remained sluggish, real estate businesses would not have enough money to pay their taxes.-VNA