Managing fiscal policy has achieved many positive and comprehensive results

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Operate proactive, positive and focused fiscal policy

According to the Ministry of Finance's assessment, the implementation of fiscal and state budget tasks in the first half of 2024 has taken place against the backdrop of stable macroeconomic balances and sustained economic growth. However, the ongoing global instability and emerging challenges have put pressure on inflation and global growth.

Domestically, overall consumer demand has been slow to recover, and production and business activities in some sectors remain challenging. Inflationary pressures are mounting due to rising exchange rates, electricity price adjustments, wage increases, and other factors.

In this context, in line with the resolutions and conclusions of the Central Committee, the Politburo, the National Assembly, and the Government, as well as the Prime Minister's directives, and closely following the Government's 2024 steering theme of "Discipline and responsibility; proactive and timely; accelerating innovation; sustainable effectiveness," and practical realities, in the first six months of 2024, the Ministry of Finance has taken a proactive approach to advising and proposing to competent authorities to implement proactive, positive, and focused fiscal policies.

At the same time, the Ministry of Finance has also closely coordinated with monetary policy and other macroeconomic policies to support the economy, address business and household difficulties, contribute to macroeconomic stability, ensure major economic balances, control inflation, promote socio-economic growth, and ensure national defense, security, social order and safety, and people's living standards.

The Finance sector has proactively advised and proposed to competent authorities to operate key fiscal policies.

In the first half of 2024, the Ministry of Finance has focused on effectively implementing tax laws and state revenue collection tasks from the beginning of the year. The Ministry has also strengthened inspection and examination activities, strictly handling violations and fraud in tax declaration and refund procedures. In addition, the Ministry has pushed forward administrative procedure reform, digital transformation, modernization, application of information technology, and implementation of e-tax management.

Tax and Customs authorities have strengthened revenue management, especially for key sectors, industries, and localities, businesses operating on digital platforms, e-commerce, non-resident foreign suppliers in Vietnam, real estate transfers, reviewing real estate valuation prices in line with market prices, etc., to ensure accurate, timely, and full collection of all revenues. At the same time, they have closely coordinated with competent forces to enhance anti-revenue loss, smuggling, trade fraud, transfer pricing, and tax evasion activities; intensified inspection and examination of businesses' tax declaration dossiers; conducted thematic inspections and examinations; and resolutely handled tax debt collection, striving to reduce tax arrears.

Revenue collection increase 17%

Thanks to synchronous solutions, state revenue has achieved positive results. Accordingly, state revenue in the first half of the year reached VND 1,038.1 trillion, equivalent to 61% of current appropriation, up 17.7% compared to the same period in 2023 (central budget revenue is estimated to reach 64.7% of current appropriation, local budget revenue is estimated to reach 57.4% of current appropriation). In particular, domestic revenue reached 60.1% of current appropriation, increasing 19.7% year-on-year; revenues from crude oil reached 64.3% of the current appropriation, reducing 5.1% year-on-year; budget balancing revenue from import-export activities reached 68.4% of current appropriation, rising 11.5% year-on-year.

In addition, state budget expenditure is estimated to reach VND 803.6 trillion, equivalent to 37.9% of current appropriation, approximately at the same level as in 2023; of which: development investment expenditure is estimated to reach 29% of the National Assembly's approved estimate, decreasing 8.8% (VND 16.4 trillion) year-on-year; the disbursement rate is estimated to reach 29.39% of the plan assigned by the Prime Minister (in the same period of 2023, disbursement reached about 30.49% of the plan assigned by the Prime Minister); debt interest payment is estimated to reach 49.7% of current appropriation; regular expenditure is estimated to reach 43.7% of current appropriation.

The balance of the central budget and local budgets is ensured. By the end of June 2024, the Ministry of Finance had issued VND 156.5 trillion of government bonds, with an average maturity of 10.89 years and an average interest rate of 2.33%/year, ensuring timely payment of the principal of maturing central government loans and contributing to interest rate guidance market.

Also according to the Ministry of Finance, as of June 30, 2024, the Ministry of Finance's Inspectorate and other inspection agencies have conducted 31,200 inspections, focusing on the fields of revenue and expenditure management; management and use of investment capital; price and securities management; inspected over 380,700 tax declaration dossiers of enterprises; investigated and combated smuggling, arrested and handled 8,200 violations in the customs field.

As a result, financial settlement was proposed for over VND 50 trillion, of which VND 8.7 trillion was proposed for collection to the state budget (VND 6.1 trillion has been collected); losses, deductions and other financial settlements were reduced by VND 41.3 trillion.

Noteworthy, in the first half of the year, the financial sector has built, issued and implemented fiscal policies to support the economy, remove difficulties for businesses and people, stabilize the macroeconomy, control inflation and promote growth.

Accordingly, on the basis of closely monitoring the actual situation and forecasting for the coming time, the Ministry of Finance has proactively studied and proposed to the competent authorities solutions to support businesses and people.

The Ministry of Finance has submitted to the Government for approval and issuance of policies to reduce, extend taxes, fees, charges and land rent for businesses and people on a scale of about VND 184.86 trillion. Of which, the policy of reducing taxes, fees and charges is about VND 92.3 trillion; extending taxes and land rent is about VND 92.56 trillion. The implementation of the tax exemption and reduction policy in the first half of the year reached about VND 47.3 trillion.

Ensuring national financial security and public debt sustainability

Public debt management was another notable focus of the Ministry of Finance in the first half of the year. The Ministry has tightened control over the state budget deficit and local government borrowing; strictly practiced regular expenditure savings, cut unnecessary expenditures, and suspended disbursements, along with achieving state revenue collection progress in line with estimates.

As a result, the state budget deficit and public debt have been controlled at a lower level than the estimate and the National Assembly's ceiling, ensuring national financial security and sustainable public debt, creating room for proactive and flexible fiscal policy management, and expanding it reasonably to support the economy and promote growth.

Public debt is projected to reach around 37-38% of GDP by the end of 2024, government debt around 35-36% of GDP, and national foreign debt around 34-35% of GDP. The government's direct debt repayment obligation to NSNN revenue is around 23-24%.

In the first half of the year, the Ministry of Finance closely coordinated with ministries, branches, and localities to closely monitor market price developments to synthesize, analyze, and build scenarios, promptly advise the Government and the Steering Committee for Price Management on solutions to ensure control inflation and macroeconomic stability, and create room for price management and inflation control in the remaining months of the year.

Thanks to the effective implementation of price management and regulation measures in the first half of the year, domestic market prices have been basically stable, inflation has been controlled, and the average CPI for the first 6 months increased by 4.08% compared to the same period, core inflation increased by 2.75%.

Also, according to the Ministry of Finance, in the first half of the year, the stock market trend has shown a positive recovery, in the context of the world stock market growing positively and the economic recovery continuing to be maintained.

As of June 28, 2024 (the last trading session of June), the VN-Index reached 1,245.32 points; an increase of 10.2% compared to the end of 2023; the stock market capitalization increased by 19.0% compared to the end of the previous year; equivalent to 69.1% of GDP in 2023.

In the first half of the year, the Ministry of Finance continued to promote administrative reform, digital transformation, e-government building, streamlining the organizational apparatus, and operating effectively.

Regarding public property management, in the first half of the year, the Ministry of Finance approved new plans for the arrangement and handling of 249 real estate properties of ministries and central agencies. By the end of June 2024, the total number of real estate properties approved by competent authorities is 199,300; the total number of real estate properties not yet approved is 63,400.