Minister of Finance: Strive to fulfill the highest level of the 2020 budget revenue and expenditure tasks

	Minister of Finance: corruption and bribery in any form strictly forbidden
	Implementation of compulsory insurance for civil liability of motor vehicles’ owners to be supervised
	Minister of Finance Dinh Tien Dung: Focus on 10 financial solutions to support economic recovery

Ministers attend the Government Conference with localities. Photo: VGP

At the national online conference between the Government and localities to assess the socio-economic situation in the first six months of the year and to carry out the tasks in the last six months of 2020, Minister of Finance Dinh Tien Dung presented a report on the State budget revenues and expenditures as well as recommendations to ensure fiscal policy to better serve social security.

Ensure revenue and expenditure

According to Minister Dinh Tien Dung, the state budget implementation in the first six months was greatly affected by the impact of the Covid-19 pandemic. Specifically, the total State budget revenue in six months was about 44.2% of the estimate, down 11.1% over the same period in 2019.

“This is the year with the lowest budget revenue progress over the estimate since 2013 and a decline compared to the same period in all three key areas,” the Minister of Finance stated.

In which, domestic revenue reached 44.11% of the estimate, down 8%; crude oil revenue reached 59.7% of the estimate, down 28.5%; and balanced revenue from import and export reached 43.4% of the estimate, down 21.9% over the same period of 2019.

In domestic revenue, revenues from three economic sectors were low. Specifically, revenues from SOEs reached 37.1% of the estimate, down 21.5%; revenue from FDI enterprises was 41.8% of the estimate, down 6.5%; and revenue from the non-state economic sector reached 37% of the estimate, down 16.1%.

Thiry-four out of 63 localities in the whole country had six months of revenue over 50% of the estimate. Of the 16 key localities with centralized revenue, only five out of 16 provinces reached the domestic revenue progress of over 50%, namely Quang Ninh, Bac Ninh, Dong Nai, Binh Duong and Ba Ria-Vung Tau; eight localities with less than 40% of the estimate were Ho Chi Minh City, Da Nang, Quang Ngai, Quang Nam, and Hai Phong.

“This showed that enterprises faced many difficulties,” Minister Dinh Tien Dung said.

By the end of June, the tax office has received and handled 148,000 paper requests for extension of tax and land rent; the total amount of extended money was about VND43,000 billion.

In addition, the head of the Ministry of Finance said he had made a decision to reduce the registration fee by 50% when registering domestically manufactured or assembled cars; submit to the Standing Committee of the National Assembly for a decision on raising personal income tax deductions; adjust 30% reduction of environmental protection tax for aviation fuel and submit to the National Assembly to reduce 30% of corporate income tax payable to enterprises, cooperatives, non-business units and other organizations with taxable turnover not exceeding VND200 billion; coordinate with ministries and branches in reviewing and reducing a variety of charges and fees for enterprises and people.

Regarding State budget spending, Minister Dinh Tien Dung said the State budget spending in the first six months was based on the budgeting progress, ensuring important tasks. Accumulated to June, State budget expenditure reached 41.8% of the estimate, of which, development investment expenditure reached 33.1% of the estimate; interest payment was 50.3% of the estimate, down 0.9%; and recurrent expenditure reached 48.2% of the estimate.

To support the prevention of the Covid-19 pandemic, the State budget spent about VND15.3 trillion and spent around VND11.3 trillion for about 11 million people affected by Covid-19 under the Government's Resolution No. 42/NQ-CP.

Concerning disbursement of development investment capital, although the progress has been good compared to the same period in 2019 (33.1% compared to 28.6%), in comparison with the amount of public investment allowed to disburse in 2020 (including sources transferred from previous years), the disbursement in six months reached 28.94% of the plan. Especially, the disbursement of foreign capital only reached 10.2% of the estimate in 2020.

Thirty-three ministries, central agencies and seven localities had disbursement rates below 20%; in which 17 units disbursed less than 10%, and ten units disbursed below 5%.

Central budget and local budgets balance for the first six months were guaranteed. The Ministry of Finance has actively issued VND96.1 trillion of Government bonds with an average term of 14.01 years and average interest rate of 2.99%/year, ensuring the source to meet spending tasks.

The debt repayment was organized fully and on time as committed, strengthening the national credit rating.

Slow equitization and disbursement of public investment

Regarding the solution of State budget management in the last months of 2020, Minister of Finance Dinh Tien Dung proposed ministries, branches and localities to focus on fulfilling many objectives, because the pandemic has been complicated around the world, greatly affecting our economy.

Specifically, the Minister suggested ministries, branches and localities focus on effectively implementing fiscal and monetary solutions; continuously improving the business environment, removing difficulties for businesses and individuals affected by the Covid-19 pandemic, attracting and actively receiving foreign investment flows, and restoring economic growth.

Budget collection progress in the first six months has been the lowest since 2013. Photo: Thuy Linh

Additionally, the authorities need to coordinate closely with the tax and customs authorities to strengthen the management of revenue in accordance with each field, area and subject of collection; promote anti-revenue losses, transfer pricing, trade fraud and tax evasion; and urge the handling of tax arrears collection.

Manage State budget expenditures within the scope of assigned estimates; strive to disburse all the plan for public investment in 2020 (including the transferred plan from 2019); focus on reviewing, arranging and integrating spending tasks to reduce unnecessary recurrent expenditures.

Concerning the equitization and divestment of State capital in enterprises, Minister Dinh Tien Dung said the progress was slow , so it was difficult to achieve the set plan. In the first six months, only three enterprises have had their equitization plan approved by the competent authorities, and 92 enterprises have to equitize according to the plan for the remaining six months of 2020.

Therefore, the Minister suggested ministries, branches and localities focus on directing the implementation according to the plan, expanding methods of selling contributed capital shares (including the sale of entire enterprises), ensuring the revenue from shares, divesting State capital in enterprises according to estimates (the central budget is VND45,000 billion).

After listening to the report, recommendations and proposals of the Ministry of Finance, Prime Minister Nguyen Xuan Phuc highly appreciated the efforts of the Ministry of Finance, helping the budget revenue and expenditure remain positive. Along with that, many localities have been determined to ensure budget revenue. Therefore, the Prime Minister asked ministries, branches and localities to make high efforts in cutting budget expenditures.

The Prime Minister said the disbursement of public investment was the biggest problem, so it was necessary to promptly adjust the public investment portfolio in localities with delayed disbursement.

The Prime Minister also asked for looser fiscal policies to support manufacturing and services. Because other countries spend 10% of GDP on the budget, which is a very large number while our country has only spent VND14,000 billion, so continuing support for production and business is necessary. Localities need to discuss this issue, the Prime Minister stated.