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Minister of Finance speaking at the conference.

According to Minister of Finance Ho Duc Phuc, many financial policies have been issued to concretize guidelines for green economic development, contributing to facilitating the mobilization and attraction of investment resources towards green growth. Currently, the Ministry of Finance focuses on reforming the tax system, managing public debt and restructuring the state budget to mobilize resources appropriately.

Tax policy towards environmental protection

The Minister of Finance emphasized that, at the COP 26 Conference in 2021, joining hands with the international community, the Prime Minister of Vietnam committed to achieving "zero" net emissions by 2050, demonstrating Vietnam's determination to realize the goals of green transformation and sustainable development.

"Therefore, Vietnam needs to make great efforts to both develop a sustainable economy while adapting and minimizing the impacts of climate change, greenhouse gas emissions, fossil energy, and environmental pollution. ", Minister Ho Duc Phuc emphasized.

Sharing about the financial policies that have been issued to concretize policies to promote green growth, Minister Ho Duc Phuc said that on the tax policy system, the Ministry of Finance had advised the Government to implementation of the provisions of the law towards environmental protection, expressed through two groups of policies including policies to limit acts of environmental pollution such as environmental protection tax, natural resource tax, excise tax on goods that cause harm to the environment; policies to support and encourage environmental protection activities, to reduce pollution and impacts of climate change.

For corporate income tax (CIT): preferential CIT rate at 10% for 15 years, tax exemption for not more than 4 years and 50% reduction of payable CIT amount for no more than the following 9 years for the enterprise's income from new investment projects in the field of environmental protection.

Conference Overview.

With value-added tax (VAT): regulations on transfer of emission rights (carbon credits) are not required to declare, calculate and pay VAT; stipulates that goods and services that contribute to greening the economy are not subject to VAT. For example, services for flower gardens, parks, ornamental plants, and passenger transportation by tram are exempt from VAT.

With special consumption tax: preferential tax rates for products such as biofuels, environmentally friendly cars, etc.

Budget spending on environmental causes reaches over 21 trillion VND per year

Also, according to the Minister of Finance, in the context of the state budget still facing many difficulties, the state budget expenditure that has been prioritized for the cause of environmental protection every year is arranged to ensure compliance with regulations the following year is higher than the previous one in term of the absolute digit. It reaches about 1.35% of the total state budget expenditure in a year, thereby creating resources for environmental protection, prevention and response to national environmental incidents.

Statistics from the Ministry of Finance show that, on average, in the past 5 years, the allocation of state budget expenditure for environmental causes has reached over 21 trillion VND per year.

For investment spending, the green growth budget has been integrated into investment priorities in sectors, fields, localities and national target programs. The estimated investment expenditure for the environmental cause in 2021-2025 is about VND 23.5 trillion.

Minister Ho Duc Phuc said that besides public resources, in recent years, Vietnam has mobilized resources from the private sector and international organizations through the formation and development of the green financial market. From 2019-2023, Vietnam issued green bonds of 1,157 billion USD. Along with that, the green stock market has also made initial developments.

The Minister emphasized that green transformation and emission reduction to realize Net Zero commitment is a long way with many difficulties and challenges; one of the biggest challenges is the issue of resources. However, the public sector will only be able to meet about a third of the required resources, while the green financial market is currently at an early stage of development.

To fulfil the mission of reducing greenhouse gas emissions, promoting clean energy, renewable energy, greening production, greening lifestyles, promoting consumption, and promoting sustainability, at present, Minister Ho Duc Phuc, The Ministry of Finance is focusing on reforming the tax system, managing public debt and restructuring the state budget to mobilize resources for the state budget appropriately.

At the same time, the Ministry also improved its fiscal position, created favourable conditions for mobilizing, allocating and effectively using financial resources, harmoniously solving problems of economic, social and environmental development, and ensuring national defence and security society.

To solve the problem of shortage of resources for green growth and response to climate change, besides promoting internal resources, Vietnam needs to strengthen cooperation and support from the international community.

Accordingly, in addition to prioritizing public resources, the Ministry of Finance will actively coordinate with relevant ministries and sectors in researching solutions to mobilize private resources and international organizations, in which the first thing to be done will be the development of green financial markets and carbon markets.