Many challenges for economic policy after Covid-19

VCN - In 2022, Vietnam has implemented an unprecedented series of fiscal policies to recover and develop socio-economically after the Covid-19 pandemic. However, in the context of rapidly changing world and domestic situations, with potential risks that are difficult to predict, economic policies need to be flexible and adjusted appropriately in order to promote strengths, and effectively mobilize and allocate resources for socio-economic growth.
Difficulties without timely removal policies will slow down development opportunities  of the enterprise. Photo: collection
Difficulties without timely removal policies will slow down the development opportunities of the enterprise. Photo: collection

Needing flexible adjustment

Since the Covid-19 pandemic emerged, a series of fiscal policies have been introduced to support enterprises and people. The Ministry of Finance has also quickly implemented these policies with determination. Accordingly, tax exemptions, reductions, and extensions of payment deadlines, as well as state budget revenues, have been introduced with a total amount of money to support enterprises and individuals to restore and develop production and business, totaling around VND 140 trillion in 2021 and VND 144.5 trillion in the first 10 months of 2022. In addition, prioritizing resources for pandemic prevention and control and social security support for the people; advising the government to set up a Covid-19 vaccine fund to mobilize funding and support resources for the purchase and import of vaccines, research, and domestic vaccine production.

Economic expert Dr. Vu Dinh Anh:

Whether to implement policies that help enterprises reduce difficulties is a matter of concern today.

Looking at the history of Vietnam's economic development, it can be seen that the Vietnamese economy keeps falling to the bottom and then steadily going up. The current state of growth in 2022 is quite good, even very good, which could create a new phase of growth when it falls to the bottom.

However, in the coming time, it is unclear whether reducing taxes and increasing state budget spending from less than 30% to 35% of total investment expenditure and promoting economic stimulus through policies, would be beneficial. Currently, disbursement of public investment is slow, reaching more than 60% of the plan with just over a month left until the end of 2022.

Assoc. Prof. Dr. Vu Sy Cuong, Academy of Finance:

It is necessary to continue reviewing and adjusting policies as needed. The supervisory role of elected bodies at all levels, such as People's Councils and the National Assembly, is also very important in the context of public investment.

In terms of fiscal policies, experience shows that policies that are simple, easy to implement, and direct are highly effective. At the same time, careful coordination between fiscal and monetary policies is needed, taking into account the current conditions in Vietnam.

Mr. Werner Gruber, Chief Representative of the Swiss Cooperation Agency in Vietnam:

Fiscal decentralization is necessary to enhance the efficiency and resilience of fiscal policy, the efficiency of public spending and public investment, and better mobilize private sector participation. In the future, Vietnam needs to mobilize private capital to invest in infrastructure and further promote openness, transparency, and accountability in the allocation of resources for development. It is also important to assess fiscal policy risks.

Xuan Thao (writing)

"The financial and state budget policy solutions applied in 2021 and especially in the years 2022-2023 under the program for socio-economic recovery and development are quite comprehensive and timely. This has contributed to promoting GDP growth of 8.83% in the first 9 months of 2022. Many international organizations continue to positively assess Vietnam's socio-economic situation and forecast optimistic growth rates for 2022 and 2023, with most predictions ranging from 7.5% to 8.2%," emphasized Deputy Minister of Finance Vo Thanh Hung.

However, the current context is rapidly changing and contains many unpredictable risks. With a very open economy like Vietnam, any fluctuations or changes in the external environment will have a significant impact on socio-economic development. At the same time, the economy itself also faces existing challenges such as unsustainable economic growth, weak infrastructure, limited human resources, especially high-quality human resources, unsustainable state budget collection, delayed investment disbursement, and recently there have been negative fluctuations in the real estate market, corporate bond market, and the commercial banking system, affecting the ability to mobilize capital for economic and social development.

According to experts, although Vietnam's economy has overcome a difficult period, it is still under great pressure from outside, which can adversely affect growth, reduce revenue and increase State budget expenditure. Besides, the trend of green and sustainable economic development; circular economy; digital economy; climate change response and the implementation of tasks in the resolutions of Central Committees, especially the 5th and 6th Central Committees on accelerating industrialization and modernization of the country, developing regions... so, financial policies must be adjusted flexibly and appropriately in order to promote strengths, effectively mobilize and allocate resources for socio-economic development.

Needing a long-term policy

Evaluating the support policies in the past time, Dr. Nguyen Dinh Cung, former Director of the Central Institute for Economic Management (CIEM), said that the policy needed a long-term vision because the current policy was solving specific problems. Therefore, from the perspective of enterprises, especially domestic private enterprises, they would not develop if they were following the case without creating long-term policies for the enterprises to develop. Meanwhile, the business community was strongly motivated to improve research, development, and technology transfer to improve productivity, and to make efforts to train and improve the quality of personnel. If there was a promotion policy, there would be a strong rise.

According to Dr. Nguyen Dinh Cung, Vietnam's economic growth rate decreased by 1% every 10 years and currently had not seen much motivation to promote business growth in particular and Vietnam's economy in general. Specifically, Vietnamese enterprises were currently suffering from a "double hit". Accordingly, enterprises were facing 3 pressures, which were credit ceilings, increased interest rates, and increased land use fees, causing enterprises to struggle to pay expenses in a difficult context.

In addition to the above difficulties, enterprises still bear many burdens of costs, including increased revenues unrelated to business activities such as 2% of union fees. In the ASEAN-5 region, in revenue of enterprises, Vietnam is second only to Malaysia. These difficulties reduce the motivation of enterprises, and if there is no removal policy, it will slow down development opportunities.

Proposing policies to create motivation for enterprises, Mr. Nguyen Dinh Cung said that there should be a sudden change, especially a change in the development philosophy because only such a change could have ideas to set up a policy system or else it would continue to reduce growth momentum.

Assoc. Prof. Dr. Tran Dinh Thien, an economic expert and a member of the Government's Advisory Group, said that in 2023, enterprises were still facing many difficulties and challenges due to high world interest rates, rising exchange rates, capital circuits of the Vietnamese economy were stagnant.

At this time, fiscal policy, and budget expenditure must support, and public investment disbursement must be better promoted. This required great efforts from the Ministry of Finance.

Regarding fiscal policy to support enterprises, and people, according to Assoc. Prof. Dr. Tran Dinh Thien, still needed to promote for the next period. In addition to the story of reducing general taxes and fees for the economy, there were areas that needed to be prioritized to help industries, enterprise lines, and areas jump up, thereby pulling the whole economy up. Now is the time to focus on helping enterprises more.

By Xuan Thao/ Binh Minh

Related News

Many challenges in preventing and combating drugs through express and postal delivery

Many challenges in preventing and combating drugs through express and postal delivery

VCN - Postal and express delivery routes have the advantage of fast, safe and time-saving transportation, procedures for sending goods through express delivery service companies are very simple... Therefore, drugs traffickers always try to mix drugs with goods through this form of transportation.
Implementing unprecedented fiscal policies to actively support people and businesses

Implementing unprecedented fiscal policies to actively support people and businesses

VCN - Implementing fiscal policies to support the economy, the Ministry of Finance has advised and offered many unprecedented solutions to reduce taxes, fees and charges, thereby supporting people and businesses to overcome difficulties, restore production and business. According to assessments, in 2024 fiscal policy will continue to be a positive highlight for the economy.
Numerous growth drivers, opening opportunities for enterprises

Numerous growth drivers, opening opportunities for enterprises

VCN - That is the appraisal given by experts at the seminar "HUBA Entrepreneurs' Coffee" under the theme: "Vietnam and HCMC's Economy in 2024 - Issues of interest to entrepreneurs," which took place on March 9, organized by the Ho Chi Minh City Business Association (HUBA).
Export businesses seek opportunities for 2024

Export businesses seek opportunities for 2024

VCN - The global trade outlook in 2024 is forecast to continue to face many challenges, negatively affecting the export activities of Vietnamese enterprises. To continue to survive and develop, businesses have to make the most of even the smallest opportunity.

Latest News

Completing site clearance and accelerating disbursement of public investment in key transportation projects

Completing site clearance and accelerating disbursement of public investment in key transportation projects

VCN - By the end of April 2024, the total disbursed capital of nine important national projects in the transportation industry reached 17.6% of the assigned plan, reported by the Ministry of Finance.
Fed’s latest rate decision won

Fed’s latest rate decision won't have significant impact on Việt Nam

The dollar depreciation is also a good sign for Việt Nam’s import activities, with global raw material prices expected to decrease and inflationary fears for imports receding.
Enterprises expect the stock market to be upgraded by 2025

Enterprises expect the stock market to be upgraded by 2025

VCN - Vietnam is in the final stages of completing the remaining criteria for the stock market to be upgraded to an emerging market after nearly 10 years of starting the stock market upgrade process. According to assessments, the upgraded stock market to an emerging market will bring benefits in many aspects, especially in terms of reputation as well as the ability to attract foreign capital flows. Currently, enterprises are very hopeful about the market's upgrade ability in 2025.
Developing State budget estimates for 2025: carefully taking factors increasing, decreasing and shifting revenues into account

Developing State budget estimates for 2025: carefully taking factors increasing, decreasing and shifting revenues into account

VCN - The Ministry of Finance is developing a circular guiding the development of state budget estimates for 2025 and the 3-year state budget and financial plan for the 2025-2027 period; 5-year financial plan for the 2026-2030 period.

More News

Ministry of Finance proposes seven solutions for combating tax evation for e-commerce

Ministry of Finance proposes seven solutions for combating tax evation for e-commerce

VCN - Vietnam e-commerce will reach US$30.5 billion in 2035 hence according to Minister of Finance Ho Duc Phoc, it will pose challenges to the management of tax, quality of goods, and anti-fraud.
Banks are ready to deploy biometric authentication

Banks are ready to deploy biometric authentication

VCN - According to Decision No. 2345/QD-NHNN dated December 18, 2023 of the State Bank, which will take effect from July 1, money transfer transactions over 10 million VND/time or over 20 million VND/day will require facial authentication. Accordingly, banks are urgently preparing to be ready to implement new regulations within the set deadline.
Review the tax payment of sales livestream individuals

Review the tax payment of sales livestream individuals

VCN - The General Department of Taxation has just issued an official letter directing local tax departments to drastically manage e-commerce taxes and electronic invoices generated from cash registers.
13 cases subject to direct tax registration with Tax authority

13 cases subject to direct tax registration with Tax authority

VCN – The Ministry of Finance collects comments on a draft Circular guiding tax registration to replace Circular 105/2020/TT-BTC. According to the draft, if the National Population Database
Ministry of Finance: Focusing on improving independent audits

Ministry of Finance: Focusing on improving independent audits

VCN - According to Minister of Finance Ho Duc Phoc, in recent times, the Ministry of Finance has focused on improving the quality of independent audits through training, inspection, and examination.
Digitizing the process, banks actively lend online

Digitizing the process, banks actively lend online

VCN - Many banks promote online lending to save time and costs for both parties and creating conditions to promote credit growth.
The finance sector

The finance sector's firm stance on combating tax evasion in e-commerce

VCN - Addressing and clarifying some opinions raised by National Assembly deputies during the questioning session on issues related to the commerce and industry sectors on the afternoon of June 4, Minister of Finance Ho Duc Phoc stated that in the coming period, the finance sector would rigorously enforce tax collection on e-commerce to ensure fairness in the fulfillment of taxpayers' obligations.
Total State revenue managed by Tax sector is estimated at VND767,415 billion

Total State revenue managed by Tax sector is estimated at VND767,415 billion

VCN – The total state revenue in the first five months of 2024 managed by the Tax authority is estimated at VND 767,415 billion, meeting 51.6% of the target and 114.9% year-on-year.
Tax sector cooperate with Police agency to prevent fraud of tax invoice

Tax sector cooperate with Police agency to prevent fraud of tax invoice

VCN - Over the years, the acts of law violation on electronic tax invoices took place complicatedly with many different tricks. To prevent fraud, the tax sector has applied several drastic measures, including strengthening cooperation with the Police agency.
Read More

Your care

Latest Most read
Completing site clearance and accelerating disbursement of public investment in key transportation projects

Completing site clearance and accelerating disbursement of public investment in key transportation projects

VCN - By the end of April 2024, the total disbursed capital of nine important national projects in the transportation industry reached 17.6% of the assigned plan, reported by the Ministry of Finance.
Fed’s latest rate decision won

Fed’s latest rate decision won't have significant impact on Việt Nam

The dollar depreciation is also a good sign for Việt Nam’s import activities, with global raw material prices expected to decrease and inflationary fears for imports receding.
Enterprises expect the stock market to be upgraded by 2025

Enterprises expect the stock market to be upgraded by 2025

Vietnam is in the final stages of completing the remaining criteria for the stock market to be upgraded to an emerging market after nearly 10 years of starting the stock market upgrade process.
Developing State budget estimates for 2025: carefully taking factors increasing, decreasing and shifting revenues into account

Developing State budget estimates for 2025: carefully taking factors increasing, decreasing and shifting revenues into account

VCN - The Ministry of Finance is developing a circular guiding the development of state budget estimates for 2025 and the 3-year state budget and financial plan for the 2025-2027 period; 5-year financial plan for the 2026-2030 period.
Ministry of Finance proposes seven solutions for combating tax evation for e-commerce

Ministry of Finance proposes seven solutions for combating tax evation for e-commerce

Vietnam e-commerce will reach US$30.5 billion in 2035 hence according to Minister of Finance Ho Duc Phoc, it will pose challenges to the management of tax, quality of goods, and anti-fraud.
Mobile Version