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The total scale of business support solutions in the 2020-2024 period is nearly VND900 trillion. Photo: H.Anh

The total scale of support solutions is nearly VND900 trillion

In the past 5 years, the Covid-19 pandemic and geopolitical fluctuations have negatively impacted the socio-economic development as well as the production and business activities of enterprises and people. With its assigned role and responsibilities, the Ministry of Finance has proactively researched, proposed, submitted to competent authorities and issued many solutions in the financial sector, in which, the fiscal policy has been expanded with a focus on key points at different levels depending on macro management and actual situation.

According to Deputy Minister of Finance Vo Thanh Hung, the synchronous implementation of policies to extend and reduce taxes and fees with a total scale of support solutions in the 2020-2024 period of nearly VND 900 trillion has helped businesses and people overcome difficulties, especially financial liquidity to maintain and expand production and business activities.

Many social security policies have been implemented such as: development investment expenditure in the post-Covid-19 recovery program, expenditure for priority areas of health; social security, labor, employment; support for businesses, cooperatives, and business households; investment in infrastructure development.

To ensure the balance of the state budget, the whole country has implemented recurrent savings, has not implemented salary reform in 2020-2022, and strictly managed revenue sources. Thus, the state budget deficit is strictly controlled, with an average of 3% of GDP in 2021-2023, and an estimated 3.4% of GDP in 2024 within the scope allowed by the National Assembly.

According to Deputy Minister Vo Thanh Hung, the implementation of the expansionary fiscal policy from 2020 to 2024 has had a positive impact, helping the economy recover and enter a high growth trajectory. However, the economy also faces pressure to control inflation. Therefore, fiscal policy next year is expected to basically return to normal state.

The Government is assigning the Ministry of Finance to review and report to the National Assembly to amend and supplement many tax laws, and submit a draft law amending and supplementing 7 laws related to finance - State budget.

All of this aims to thoroughly remove institutional difficulties and obstacles for agencies, units, enterprises and people to promote economic development. At the same time, continuing to prioritize resources in development investment expenditure (estimated for 2025, expenditure for this item accounts about 31% of total state budget expenditure, higher than the 5-year target of 28-29%) while still ensuring sources for salary reform, issued social security policies, and maintaining financial security and safety through good control of deficit and public debt.

Meeting current economic situation

Commenting on this issue, economic expert Dinh Trong Thinh said that, promoting the State budget's funding activities for the economic recovery and development process is a very important factor for the production and business activities of enterprises and people, and for the economy.

“However, from a certain perspective, the very strong funding of the State budget in the recent past has also caused difficulties for budget balancing activities as well as ensuring the spending needs of the State budget, leading to an increase in the budget deficit.

Therefore, I think it is time for us to comprehensively consider the support policy for the economic recovery and development process in the sense that: the economy has recovered and is operating normally again, so we should also apply normal mechanisms”, expert Dinh Trong Thinh emphasized.

According to Dr. Le Duy Binh, CEO of Economica Vietnam, said that it is reasonable to reconsider the expansionary fiscal policy and return to a normal fiscal policy in the context of the current economic situation. Large-scale support programs should be considered to stop or reduce in scale or intensity.

“In recent years, economic growth has been greatly supported from the State budget. That is necessary to help the economy overcome the crisis, recover and grow again. But if this support is still extended, it will affect the principles of soundness, the sustainability of the State budget as well as budget discipline”, Dr. Le Duy Binh emphasized.

According to this expert, narrowing or reducing the intensity of fiscal support programs will force the economy to return to normal discipline as well as the normal operating mechanism of the market, contributing to the stabilization of macro balances related to the State budget, while ensuring conformity with international practices on fiscal policy and reducing risks for enterprises from the perspective of the risk of being sued for anti-dumping.