Fiscal policy to promote economic growth

The support of fiscal policy has contributed to Vietnam's economic growth in 2021 reaching 2.58%.

Timely and effective support policy

During the Covid-19 pandemic, fiscal policy has closely followed the evolution of the economy, providing timely support for people and businesses facing difficulties due to the pandemic. With the annual tax exemption, reduction and extension amounting to hundreds of trillions of dong, fiscal policies have brought positive impacts, making an important contribution to supporting and recovering the economy and society.

In general, the solutions on tax, fees and land rent have been issued and implemented in 2021, the amount of money supporting businesses and people is expected to be about VND 145 trillion. In particular, the amount of tax extension is about VND120 trillion; the amount to be exempted or reduced is about VND25 trillion. The support of fiscal policy has contributed to Vietnam's economic growth in 2021 reaching 2.58%.

Entering 2022, implementing Resolution No. 43/2022/QH15 of the National Assembly and Resolution No. 11/NQ-CP of the Government, the Ministry of Finance actively developed and submitted to competent authorities for the promulgation of policies on State revenues and expenditures, balance and ensure resources for the implementation of the program of socio-economic recovery and development.

Regarding state budget expenditure, the Ministry of Finance submitted to the Government and the Prime Minister to promulgate important mechanisms and policies to continue supporting the affected subjects.

For example, the decree on interest rate support for loans at the Bank for Social Policy, loan capital, interest rate compensation and management fees for the Bank for Social Policy to lend following the Resolution No. 43/2022/QH15 of the National Assembly; decision on credit for students with difficult circumstances to buy computers and equipment for online learning. At the same time, the Ministry also coordinates with relevant ministries and sectors in formulating and submitting other important policies to competent authorities.

Thanks to the proactive and active participation of the Ministry of Finance and fiscal policies to support people and businesses, in the first half of 2022, Vietnam's economic growth has reached 6.42%, higher than the year of 2020 by three times.

Great efforts of the Ministry of Finance

According to the assessment of experts as well as people and businesses, the support solutions on tax, fees and land rents are assessed as timely and have a positive impact, therefore are highly appreciated by the business community and people, contributing to solving difficulties, stabilizing production and business activities and maintaining economic growth.

At the conference on preliminary financial and budgetary work in the first six months of 2022, Deputy Prime Minister Le Minh Khai said that the Ministry of Finance had promptly proposed to promulgate and implement many fiscal policies, especially fiscal policies, to support the program of socio-economic recovery and development, actively contributing to removing difficulties for businesses and people to promote the recovery and socio-economic development of the country. Many policies have been effective and well appreciated by the public.

According to economic expert Dinh Trong Thinh, supporting policies on tax exemption and reduction, fees, charges and land rent in the support package for socio-economic recovery and development is a great effort of the National Assembly, the Government as well as the balancing efforts of the Ministry of Finance.

Implementing the Economic Recovery Program, tax exemption and reduction policies have been implemented, notably, the reduction of 2% of value-added tax on some items with a tax rate of 10%. Thanks to careful and meticulous preparation, the value-added tax reduction policy have created a "double impact" on the monetary and fiscal policy as well as the economy, stimulating consumption activities, creating favorable conditions for expanding production activities of the economy, and reducing commodity prices also resulting in the decline of inflationary pressure.

Furthermore, after the Russia-Ukraine conflict broke out and gasoline prices increased, the Ministry of Finance promptly proposed to the Government to submit to the National Assembly Standing Committee to reduce the environmental protection tax on gasoline to the tax bracket in order to reduce gasoline prices as well as ensure macro balances and reduce inflationary pressure.

"Up to this point, the macro balances have been ensured, kept stable and the momentum of recovery, the growth of enterprises as well as the economy, in general, has been ‘on track’,” expert Dinh Trong Thinh assessed.

Mr. Dinh Trong Thinh also emphasized that the policies were issued or promulgated by the Ministry of Finance in a timely manner, ensuring the good implementation of the policies. The improved policies are more and more suitable, in order to come to life as quickly as possible, meeting the requirements of each specific time and context. It showed the great efforts of the Ministry of Finance to support people, businesses, and the economy.