Financial Strategy: Ensuring macroeconomic stability and national financial security

Nguyen Nhu Quynh, Deputy Director of the Ministry of Finance's National Institute for Finance (NIF)

Many fiscal policies remove difficulties for people and businesses

Speaking at the Vietnam Finance Forum 2021, Nguyen Nhu Quynh, Deputy Director of the Ministry of Finance's National Institute for Finance (NIF), said that the process of formulating and implementing the Financial Strategy to 2020 takes place in the context of deep and wide changes in the domestic economy on many fronts, the socialist-oriented market economic institution has been developed and perfected.

This is also the period when the national finance sector has to face and solve many difficulties due to adverse fluctuations of the domestic and international socio-economic situation.

However, thanks to the synchronous implementation of specific tasks, the Financial Strategy to 2020 has achieved positive results.

Firstly, Nguyen Nhu Quynh pointed out that the improvement of institutions in the field of finance - state budget has always been associated with the requirements of restructuring the budget and public debt, renewing the non-business sector, streamlining the effective and efficient administrative apparatus, promoting the mechanism of contracting, bidding, ordering, implementing medium-term plans, increasing financial publicity and transparency, towards sustainable development.

In the 2011-2020 period, the institutional system in the financial sector has been improved, in line with the development process of the market economy and the requirements of international integration.

Especially, in the face of the negative impacts of the Covid-19 pandemic, the Finance sector has pioneered in proposing and submitting solutions on fiscal policy to the competent authorities to remove difficulties for production - business, and ensure social security.

These are policies on extending the deadline for paying taxes and land rent; reducing corporate income tax payable in 2020; adjusting the personal income tax deduction; exempting or reducing a number of fees and charges; import tax exemption and reduction for medical supplies and equipment for Covid-19 prevention and control; adjusting the import tariff to remove difficulties for enterprises operating in the fields of leather, footwear, textiles, processing of agricultural, forestry and fishery products, mechanics, supporting industries, automobile industry.

The leader of the Institute of Financial Strategy and Policy also pointed out that the financial potential of the State has been enhanced, the size of the state budget has been expanded.

The State budget mobilization policy has been reviewed, amended and supplemented to ensure consistency, effectiveness and efficiency. As a result, the scale of state budget revenue in the 2011-2020 period is 3.8 times higher than in the 2001-2010 period.

The average mobilization rate into the state budget in the 2011 - 2020 period reached about 24.5% of GDP, exceeding the target set out in Resolution No. 07-NQ/TW (20-21% of GDP) and Resolution No. 25/2016/ QH14 (23.5% of GDP).

The rate of mobilization from taxes and fees in the 2011 - 2015 period reached about 20.7% of GDP; in the 2016-2020 period, it reached approximately 21% of GDP, achieving the set target of the strategy (21% of GDP).

“The state budget revenue structure is more sustainable, ensuring the right orientation. The tax reform strategy is to gradually increase the proportion of domestic revenue to offset the reduction in export and import taxes due to deeper international integration and fluctuations in world oil prices; in line with the goal of arranging and equitizing state-owned enterprises, increasing attraction of domestic and foreign resources for development investment,” said Nguyen Nhu Quynh.

Fiscal policy will be closely linked to socio-economic development

In the 2021 - 2030 period, many say that the economic and political situation in the world and the region will be complicated and unpredictable. In particular, the Covid-19 pandemic still has complicated and unpredictable developments, may last for many years, and will continue to affect the global economy, changing the structure, economic order and social organization of many countries.

In that context, the Socio-Economic Development Strategy for the 2021 - 2030 period sets a goal that by 2030, our country will become a modern industrialized country, belonging to the upper group of high-middle-income countries. Therefore, in this period, the national financial policy must play a pioneering role in mobilizing, liberating, allocating and effectively using domestic and foreign resources, associated with innovating the growth model in depth, improving the quality of growth on the basis of human resource development.

Nguyen Nhu Quynh said that the viewpoint of the Financial Strategy for the 2021 - 2030 period will be reform and improvement of the quality of financial institutions in the direction of synchronization, transparency and integration are prerequisites to promote the healthy development of national finance.

At the same time, restructuring the state budget and public debt management must be included in the overall economic restructuring, ensuring the leading role of the central budget and the initiative of the local budget.

During this period, financial management will be required by law, strengthening financial discipline; improving the quality of inspection, examination, prevention and fight against corruption and waste; promoting the application of information technology and digital financial platform, continuing to modernize the financial industry.

The financial strategy for the 2021 - 2030 period aims to build sustainable, modern and integrated national finance to promote growth, strengthen the economy's resilience, and ensure macroeconomic stability and national financial security.

At the same time, it is necessary to implement a reasonable incentive policy, improve the fiscal policy space, create favorable conditions for mobilizing, allocating and effectively using financial resources, harmoniously deal with economic, social and environmental development issues, ensure security, national defense and social security in association with the goals and tasks of the Socio-Economic Development Strategy 2011-2020, said Nguyen Nhu Quynh.