Minister Ho Duc Phoc: To fight inflation, we must create conditions for businesses to develop

Minister of Finance Ho Duc Phoc made a speech at the group meeting on May 25. Photo: Nguyen Thanh

Production power is rising

Continuing the program of the 3rd session of the 15th National Assembly, speaking during the group discussion session on May 25, referring to the issue of socio-economic recovery, Finance Minister Ho Duc Phoc said there were many support policies. In 2021 as well as the first four months of this year, thanks to great efforts, we could maintain and build the current growth momentum.

‘Regarding the revenue collection exceeding the estimate in 2021, some stated that the excess in revenue collection mainly came from collecting land use fees and revenue from crude oil,” the head of the Finance sector said.

In 2021, budget revenue reached VND1,568 trillion, exceeding 16.4% compared to the estimate and higher than the figure of 2020 by 3.8%. In particular, land use fees exceeded VND74.1 trillion; crude oil only exceeded VND21.4 trillion due to the increase in crude oil prices.

The estimated land use levy accounts for 8.3% of the total revenue, but it actually reached 11.8% of the total revenue. According to the estimate, revenue from cruel oil was estimated to account for 1.7% of total revenue, but the actual revenue accounts for 2.9% of total revenue. That means the vitality of Vietnam's economy besides revenues from land and crude oil can still develop.

In 2021, economic growth was only 2.58%, however, budget revenue still exceeds the estimate by 16.4% and exceeds revenue by 3.8% compared to the previous year. Explaining this more clearly, Minister Ho Duc Phoc said budget revenue has been increased in potential areas that have not been collected for a long time.

For example, revenue from digital platforms and real estate transfer. Particularly, revenue from real estate transfer in the first quarter of 2022 has increased to VND3,200 billion compared to the same period in 2021.

“Besides that, we have launched e-invoices, recently, it has made about 4 billion e-invoices. By July 1, 2022, about 7 billion e-invoices could be made, which means 100% of businesses must use e-invoices. When using e-invoices, economic operations will arise, the purchase and sale of supplies, goods, etc., when issuing an invoice, those items must be shown on the invoice, then the value-added tax will increase," the leader of the financial industry said.

Although the potential for economic development in Vietnam still has room and production capacity is rising, Minister Ho Duc Phoc also said that Vietnam is currently facing many challenges.

Facing the current world situation, the inflation in the US is currently 8.3%. Both Europe and Asia are concerned about inflation and rising prices. High input material prices stem from the Russia-Ukraine conflict as well as China's "Zero Covid-19" policy. The issues such as rising interest rates and rising prices, such as rising oil and steel prices, have all affected the Vietnamese economy.

Meanwhile, the country is also facing problems of inflation, rising prices, and problems with bank interest rates. “The interest rate of commercial banks on mobilizing deposits is 7.3%, so when borrowing, the interest will be more than 10%, this puts pressure on businesses. Enterprises borrow at high interest rates, it will be more difficult to access interest rates," the Minister of Finance said.

Furthermore, high production and business costs will create difficulties for businesses and the economy. Some commercial banks also have difficulties and bad debts. These factors affect employees, as well as budget revenue.

Creating conditions to promote public investment

Minister Ho Duc Phoc emphasized that the country has just suffered from the pandemic. The core issue is how to increase the capacity of the economy. To increase the capacity of the economy, the vitality of enterprises must be developed. This is the most important driving force for economic recovery and development.

Therefore, all levels and sectors must focus on removing difficulties in administrative procedures, capital policies, land access, and how to promote business development; create utilities and infrastructure for businesses.

Overview of the meeting. Photo: Nguyen Thanh

That is the reason why Vietnam focuses on promoting expressways. If there is a road, it will develop many other industries, solve the raw material area, and attract better investment.

Recently, the Government has focused on building expressways. The entire amount of excess budget revenue, besides spending for the implementation of policies in Resolution 43/2022/QH15 of the Government on fiscal and monetary policies to support the program of socio-economic recovery and development, the rest will be spent to build expressways connecting the provinces such as the Central Highlands, Vung Tau, the Eastern highway.

The goal of this year is to try to hand over 141km of the expressway.

From the perspective of how to fight inflation in the current period, the Minister of Finance said that all levels and sectors must focus on facilitating enterprises to develop production and business and creating conditions for promoting public investment development.

This issue has many problems, such as separating the site clearance project from the public investment project. This is an urgent requirement because site clearance is part of the investment preparation, which must be prepared in advance.

“Site clearance takes a long time so it can not be done in 1-2 months, but for the whole year, even for projects of decades, even have to be coerced. It must be separated to arrange capital in advance; this is the problem that needs to be solved. However, in the Law on Public Investment, it is all wrapped up. There are contents that must be adjusted and perfected to ensure development," Minister Ho Duc Phoc said.