Minister Dinh Tien Dung: Increasing capital expenditure and reducing recurrent expenditure

VCN – This content was mentioned by the Minister of Finance under authorization of the Prime Minister on presenting the Report on implementation results of state budget 2017, state budget estimate and allocation plan for 2018 and the three-year finance and budget plan ( 2018-2020) in the fourth session XIV National Assembly on the afternoon of 23 October 2017.
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Minister Dinh Tien Dung reported at the National Assembly’s Session on 23 October 2017.

Local revenue increases while State revenue decreases

According to Minister Dinh Tien Dung, from the beginning to now, the state revenue was estimated at 69.5%. This progress was lower than the last three years due to low revenues from business and production activities and equitization. The central budget was very difficult to reach 63.2% of the estimate; while the local budget basically reached 79% of the estimate.

Minister Dinh Tien Dung said that the State budget revenue in 2017 was estimated to exceed the estimate 2.3%, equivalent to 27,300 billion VND.

“The entire excessive revenue is from the local budget, but the local revenue depends on cars (Quang Nam, Vinh Phuc); hydroelectricity (Son La, Lai Chau); crude oil (Ba Ria-Vung Tau, Ca Mau), which is also difficult. The Government is directing drastic solutions to strive to achieve the highest results, especially the central budget collection, "- said by Dinh Tien Dung.

In terms of state budget expenditure, Mr. Dung presented that in 2017, strictly abide by Resolution of the National Assembly, the budget expenditure was carried out economically. The budget expenditure was estimated at 65.1% over the past nine months. Basing on speeding up the disbursement of investment capital, the budget expenditure of the whole year was estimated to increase over 23.3 trillion VND.

“In terms of budget balance, state budget deficit in 2017 was estimated at 178,300 billion VND, equivalent to 3.5% of GDP, however, this year's budget deficit is only 174,300 billion VND, down by 4 trillion VND compared to the estimate.

"In the spirit of proactive efforts, in the last months of the year, the Government is drastically guiding measures to manage the revenue and prevent loss of the revenue”. Mr. Dung reported

Budget balance still faces many difficulties

In terms of budget estimate 2018, the revenue was estimated at over 1.3 thousand trillion VND; budget deficit was estimated at about 3.7% of GDP, but the Government said that together with the orientation of deficit reduction in 2019 and 2020, the deficit rate was in the acceptable level.

According to the Minister, budget estimate for 2018 and the following years would base on the principles and orientations of step by step restructuring budget expenditure, increasing capital expenditure, reducing recurrent expenditure; saving, giving priorities for defense and security projects and issued social security policies and strictly managing loans ...

In addition, accompanying with the requirements of salary reform, the requirements for ministries, central and local agencies were saving money, reducing human resource, increasing non-business revenues and local revenue.

At the session, Mr. Dung reported that in terms of positive aspect, the budget structure was expected to continue moving towards increasing domestic revenue to 83.3% and increasing the proportion of development investment expenditure to 26.2%, reducing the recurrent expenditure to 64.1%.

However, the difficulty was that although the revenue was estimated too highly increase, the central budget revenue faced difficulties due to the reduction in revenue from crude oil and import-export. On the other hand, though the development investment expenditure from the central budget increased, the demand was low, so that the operation process required mobilizing additional external resources for this sector.

minister dinh tien dung increasing capital expenditure and reducing recurrent expenditure Unifying one focal point for management of state expenditures from October 2017

VCN - This was said by the Deputy General Director of State Treasury under the Ministry of ...

At the same time, to adjust the basic salary, from 1 July 2018, pensions and preferential allowances for people who devoted the revolution increased by 7%. This requires the ministries, central and local agencies to ensure their revenue sources on the basis of saving and enhancing the financial autonomy of public non-business units and to use 50% of increased local budget revenue.

The verification report of the Financial and Budget Committee of the National Assembly, the chairman Nguyen Duc Hai stated that the Financial and Budget Committee basically agreed with the Government's report. In 2017, the Vietnam’s had made many positive changes, the macroeconomy was stable, but it also faced many difficulties from domestic and international markets. Objective and subjective factors impacted on economic growth, directly affected the performance of financial and budgetary tasks in accordance with the Resolution of the National Assembly.

The budget revenue estimate for 2018 increased 6.4% compared to estimate for 2017, the Budget and Finance Committee said that although the growth rate was relatively low, it was in line with the expected economic growth and unfavorable factors which impact on the economy, and limited the risk level when the revenue failed the estimate. To ensure budget estimate for 2018, the Committee proposed the Government to note some contents: the incentive rate from taxes and fees; domestic collection; revenue from state-owned enterprises and sales of the state capital in some enterprises.

Regarding budget expenditure estimate, the Budget, and Finance Committee basically agreed with the Government on the plan of state budget expenditure, and also noted that the structure of state budget expenditure in 2018 tended to change positively: The increase in investment expenditure was reasonable.

Regarding the state budget deficit, the Government expected that the state budget deficit in 2018 was around 3.7 % of GDP, a year-over-year increase of 0.2 % of GDP. The Finance and Budget Committee said that it was required to give a more convincing explanation for that the deficit level in 2018 is higher than 2017.

In addition, the Finance and Budget Committee also expressed its sympathy with the Government's report on the central budget allocation plan in 2018.

Concerning the three-year finance and budget plan (2018-2020), this is the first three-year plan in accordance with the State Budget Law of 2015. the Finance and Budget Committee said that the plan aimed to provide a vision of resources for the authorities at all levels, which was associated with the annual budget estimate. The Government issued Decree No. 45/2017 / CP dated April 21, 2017, detailing the three-year plan, guiding circulars of the Ministry of Finance and the Ministry of Planning and Investment on developing the issued three-year finance and budget plan. The Government was required to keep guiding ministries, branches and localities to implement effectively.

By Thai Binh/ Huyen Trang

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