Economic development, positive budget revenue

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Domestic revenue is increasingly accounting for a large proportion of the total state budget revenue. Source: Internet.

In 2019, it is likely to exceed 3.3 percent revenue

9 months, budget revenue reached 77.5 percent of the estimate, the highest level compared to the same period in recent years; increased by 10.1 percent over the same period in 2018. Estimated revenue in the whole year exceeded 3.3 percent (46 trillion VND) compared to the estimate. In particular, this year's central budget revenue is estimated to exceed 8-11 trillion VND, the second consecutive year exceeding the estimate. The rate of mobilisationinto the state budget reached 23.7 percent of GDP, from taxes and fees reached 20.2 percent of GDP.

More specific statistics from the Ministry of Finance show that: Domestic revenue in ninemonths reached 75.2 percent of the estimate. It is estimated the whole year exceeded the estimate of 22 trillion VND, accounting for 82 percent of the total state budget revenue. Domestic revenue from taxes and fees increased by 10.9 percent compared to 2018 and it is higher than in recent years. Revenue from state-owned enterprises was estimated to increase by 9.3 percent, from the foreign-invested sector by 10 percent, from non-state economic sector 13 percent. However, production and business activities of some businesses and sectors that contribute large revenue still faced difficulties. For example, revenue from hydroelectric plants due to water shortagesin the central region and Central Highlands made electricity generation and budget contribution estimated at only 88 percent over the same period. Revenue from automobile products increased by only 5.7 percent over the same period, mainly due to the sudden increase in imported cars, affecting domestic consumption of assembled cars. Revenue from Dung Quat Oil Refinery wasonly equal to 76.1 percent over the same period due to lower prices of petrol and oil products compared to 2018 and a decrease in the proportion of crude oil purchased from Bach Ho oil field, reducing the amount of value-added tax paid. These difficulties have affected the revenues of some localities.

Revenue from crude oil in ninemonths was 98.3 percent of the estimate with the output of 8.7 million tons, the average oil price of 67.7 USD/barrel. It is estimated that the whole year will exceed 2.2 trillion VND against the estimate, accounting for 3.2 percent of the total state budget revenue.

The balance of revenue from import and export activities in ninemonths reached 86.6 percent of the estimate, mainly thanks to goods import and export activities maintained a positive growth momentum over the same period last year, especially turnover in some aspects. Goods with large revenues increased sharply such as wood and wood products for export increased by 17 percent, textiles and garments increased by 10.4 percent, imported complete cars increased by 167.8 percent, machinery, equipment and spare parts increased by 13, 1 percent, computers, electronic products and components increased by 23 percent. It is estimated that this year, this revenue will exceed 21.8 trillion VND compared to the estimate, accounting for 14.5 percent of total state budget revenue.

Based on the five-year financial plan for 2016-2020, the Government has officially submitted to the National Assembly an estimate of the state budget revenue of 2020, of which total revenue is expected to be 1,512.3 trillion VND, reaching the rate of 22.2 percent of GDP mobilisedfrom the State budget, from taxes and fees of 19.4 percent of GDP.

Specifically, estimated domestic revenue is 1,264.1 trillion VND with: 95.9 trillion VND collecting land use fee (central land levy is 2.1 trillion VND), 31.7 trillion VND is from Lottery activities, VND 45 trillion from the sale of state capital in central enterprises, VND 65.6 trillion from dividends and profit after tax and VND 7.8 trillion of revenue and expenditure differences of the State Bank. The estimated domestic revenue will account for 83.6 percent of total state budget revenue balance. The estimated revenue from crude oil is 35.2 trillion VND, accounting for 2.3 percent of the total state budget revenue balance on the basis of 60 USD / barrel, 9.02 million tonnes of exploited output. The estimated revenue from export and import activities is VND 208 trillion, accounting for 13.8 percent of the total state budget revenue balance, decreasing over the years. Estimated aid collection is 5 trillion VND.

The budget is increasingly sustainable

If the 2020 estimate continues to be as successful as the previous years, basically the targets of state budget revenue will be achieved and exceeded. The estimate is as follows: The total revenue of fiveyears from 2016 to 2020 is estimated to reach 6.8 million billion VND. The rate of mobilisedrevenue into the state budget reached 24.4 percent of GDP, exceeding the plan by 23.5 percent of GDP; of which taxes and fees are approximately 21 percent of GDP as planned. Importantly, the structure of revenue shifted positively, the proportion of domestic revenue increased from an average of 68 percent in the 2011-2015 period, from 80.5 percent in the 2016-2018 period to 82 percent in 2019 and 83 , 6 percent of the estimate in 2020 (strive to reach 84 percent); while revenues from crude oil and import-export activities decreased from an average of 30 percent in the period of 2011-2015, from 19 percent in 2016-2018 to 17.7 percent in 2019 and 16.1 percent in the estimate of 2020.

Sharing to parliament on the state budget collection in the whole period, the Minister of Finance DinhTien Dung affirmed: The budget is more sustainable and the budget revenue still mainly comes from production and business. As evidence for this, Minister DinhTienDung said: In 2019, revenue from threeeconomic sectors including SOEs, foreign-invested enterprises and non-state sector increased by 10.9 percent, higher than expected economic growth and inflation, higher than previous years (only increased by 9.9 percent in 2016, 5.6 percent in 2017, increased by 9.7 percent in 2019). The proportion of revenue in threeareas of total revenue has also increased over the years. If in 2017 accounted for 39 percent, in 2019 it was up to 42 percent of total state budget revenue. The ratio of mobilisationfrom taxes and fees of these threeareas compared to GDP of 2016-2019 also accounted for 10.2 percent of GDP; 9.9 percent higher than in the period of 2011-2015. Thus, threeeconomic sectors are developing very fast. In contrast, revenues from assets, resources, land, and mining have increased compared to the estimates but overall, these revenues account for a small proportion and are decreasing. For example, revenue from mining rights only accounts for 0.3 percent of the total state budget revenue, from real estate accounts for 8 percent, etc. These figures show revenue from production and business is still an important and core revenue.

In fact, in the early years of the term, concerns were raised when revenues from three economic sectors had not reached their estimates. But the cause was clarified by the Ministry of Finance. Subjectively, in order to have more resources, at first, the revenue estimates were high. Objectively, the macro-economy has continued to be stable and controlled inflation, but in many areas, businesses still faced difficulties, production capacity was not stable, especially for SOEs, it was difficult to grow highly. Overcoming this situation, in 2018-2019, the Ministry of Finance has gradually changed and adjusted the cost estimates to suit the reality of the localities. In this context, resources from crude oil, import and export, and land use revenues hardly grow. In 2020, the revenue from crude oil accounts for only 2.3 percent of the total budget revenue; revenue from import and export activities was only 13.8 percent; revenue from land is only 6 percent of the total budget revenue. Thus, revenues mainly focus on 3 economic sectors and account for the largest proportion of total budget revenue, accounting for 44.8 percent of total budget revenue. In addition, the Government has also actively issued many mechanisms and policies to promote and create maximum conditions for businesses to develop production and business, thereby increasing revenue.