VCN - On the occasion of the Lunar New Year 2022, Member of the Party Central Committee, Minister of Finance Ho Duc Phoc held an interview with Customs News about the results of finance - state budget management in 2021 and major orientations in finance - state budget for 2022.
|Important step forward for Vietnamese, EU firms in socio-economic recovery|
|Budget deficit for 2022-2024 is about 3.8% of GDP|
|Enterprises are doing both production and anti-pandemic work|
|Minister of Finance Ho Duc Phoc|
We have experienced 2021 - the first year of the 2021-2025 term, a rather special year when the 4th outbreak of Covid-19 had a negative impact on economic growth, imposing intense pressure on financial-state budget work. At the conference to set out tasks in June 2021, the Minister said: "Never be passive in the state budget management". Could you assess the initiative and efforts in financial- state budget management in 2021 and the results achieved in state budget collection and spending, and support for economic recovery?
Minister Ho Duc Phoc:
Amid the Covid-19 pandemic, the Ministry of Finance has closely managed and controlled state budget revenues and expenditures and saved recurrent expenditures; proactively developed management plans to balance the state budget at all levels, prioritizing resources for Covid-19 pandemic prevention and control, ensuring social security, stabilizing people's lives, and supporting economic recovery.
Regarding state budget revenue, the Ministry of Finance proactively proposes to competent authorities to make adjustments to fiscal policies to remove difficulties and support businesses, households, and people. As a result, in 2021, about VND119.4 trillion of taxes, charges, fees and land rents has been exempted, reduced and extended to support businesses, business households and people to overcome difficulties caused by the Covid-19 pandemic. Including the implementation of policies that were issued in 2020 and extended to 2021, and support from the Unemployment Insurance Fund, the total exempted, reduced and extended taxes, charges and fees in 2021 is about VND174.2 trillion.
In the implementation of tax laws and state budget collection tasks in 2021, Tax and Customs authorities worked with competent authorities to manage budget revenues, especially in key areas to ensure correct, sufficient and timely collection of amounts; strengthened the fight against revenue loss, transfer pricing, trade fraud, tax evasion and enhanced inspection of tax returns, and strictly handled violations of tax laws; and recovered tax arrears.
At the same time, authorities focused on policy solutions for state budget collection to remove difficulties for production and business with the motto of simplifying procedures and creating favorable conditions for enterprises and business households to enjoy full and timely benefits from the policies; and strengthened inspection and supervision to avoid taking advantage of the policies for self-seeking purposes. Customs authorities also offered many solutions to facilitate customs procedures, customs inspection and supervision for import and export goods.
Motivated by the above fiscal policy solutions, combined with monetary and other economic policies, and effective control of the Covid-19 pandemic from the end of September 2021 and the implementation of Government's Resolution 128 dated October 11, 2021 on the temporary regulation "Safe adaptation, flexibility and effective control of the COVID-19 pandemic”, the total state budget revenue in 2021 is estimated at VND1,523.4 trillion, exceeding 13.4% (VND180,000 billion) of the estimate.
Regarding the state budget expenditure, from early 2021, the Ministry of Finance issued guidelines to ministries, central agencies and local authorities on the implementation of the 2021 state budget estimate actively and economically, which focused on prioritizing resources for the prevention and control of the Covid-19 pandemic and ensuring social security and stabilizing people's lives.
The Ministry of Finance proposed to competent authorities many regimes and policies for state budget spending for the prevention and control of the Covid-19 pandemic, which ensured funding to accelerate the purchase of Covid-19 vaccines and supporting employees affected by the Covid-19 pandemic; requested ministries, central and local agencies to cut at least 50% of the conference, domestic and foreign business expenses and save another 10% of the remaining recurrent expenditure in 2021; recovered recurrent expenditures that are not necessary and disbursed to supplement the provision of central and local budgets, and on Covid-19 pandemic prevention and control. Accordingly, VND14.6 trillion was added to the central budget.
To add funds to buy vaccines, the Ministry of Finance reported to the Government and the Prime Minister to set up a Covid-19 vaccine fund to mobilize funding and donations from organizations and individuals. To date, the fund has mobilized VND8.8 trillion. The Prime Minister decided to spend nearly VND8 trillion from this fund to buy vaccines.
The state budget spent VND74 trillion on pandemic prevention and support for pandemic-hit-people and provided materials and equipment from national reserves for the anti-pandemic work; allocated 158,200 tons of rice from national reserves to help people overcome consequences of natural disasters, epidemics and during Tet and early 2021.
Regarding budget balance, the balance of the central budget and local budget was ensured. It is estimated that in 2021, the state budget deficit was less than 4% of GDP.
The Finance sector has conducted strong administrative reform, especially digital transformation, which has been recognized by the Government, ministries, agencies and enterprises. As for you, how should administrative reform and digital transformation in the customs field be implemented to improve service quality and meet the expectations of people and enterprises and support the economic recovery process?
Minister Ho Duc Phoc:
In 2021, the Ministry of Finance requested Customs units to actively take many measures to ensure customs management and create favorable conditions for businesses, including focusing on administrative reform, modernization and IT application in operations; enhancing the fight against smuggling and trade fraud and strengthening discipline. Accordingly, Vietnam exceeded US$600 billion in trade, contributing to balancing payments, stabilizing the macro-economy, exchange rate and controlling inflation.
In 2022, Vietnam’s economy is facing intertwined difficulties and advantages, the global economy is forecast to continue to resume with many potential risks and challenges.
The Ministry of Finance has identified administrative reform as a key task, which should be done regularly with unified solutions and take the satisfaction of people and businesses as a service goal.
Regarding the reform of customs procedures, it is necessary to note the following contents:
First, the customs sector should continue to review, amend and supplement the system of legal documents on customs; focus on reviewing and revising customs procedures and processes toward reducing and simplifying administrative procedures and business conditions; promote decentralization of administrative processing; thoroughly solving problems; apply modern customs management standards; optimizing administrative procedures; apply IT in the management and handling of customs procedures, creating a foundation for building Digital Customs and a smart Customs model; reduce customs clearance time and business costs and creating convenience for businesses amid the development of the Covid-19 pandemic.
Moreover, the customs sector should strengthen the control of administrative procedures, especially the impact assessment of administrative procedures in draft legal documents to ensure that issued administrative procedures are necessary, lawful and reasonable; and effectively carry out administrative procedures at the request of individuals, organizations and enterprises.
Furthermore, the customs agency should streamline the Customs structure at all levels towards building a centralized Customs model, meeting the requirement of management areas and work, reducing intermediary stages, and limiting overlaps, strengthening training to improve the capacity of Customs officers; and accelerate international cooperation to exchange information and approach the management model of advanced countries to meet reform requirements and implement customs procedures quickly, effectively and efficiently.
Second, regarding digital transformation in the customs field. The customs sector should continue to communicate and raise awareness about digital transformation for Customs officers and employees; promote training to improve the quality of human resources to meet the requirements of digital customs, digital transformation and IT application; conduct strong digital transformation and apply technologies of Industrial Renovation 4.0 in state management of customs; successfully implement the overall redesign of the Customs IT system on the basis of applying the latest technology, in line with advanced international standards, towards digital Customs and meeting smart management requirements.
Along with that, the customs sector should complete the National Single Window (NSW) and the ASEAN Single Window (ASW); improve the quality and expand the quantity in the implementation of the NSW, the ASW and trade facilitation, which focuses on perfecting the legal system related to the NSW and the ASW, developing IT systems to meet the requirements of connecting, exchanging and sharing information to realizing international commitments as stipulated in free trade agreements signed by Vietnam and building a platform to provide information exchange between enterprises in the international supply chain and other services such as payments.
At the same time, the customs sector should focus on improving the quality of online public services for people, businesses and stakeholders to meet the management requirements and better serve people and businesses through APIs; provide online public services and information on the Customs Portal to serve people and business to complete customs procedures on mobile applications, of which at least 80% of online public services are provided at level 4; build an effective internal management system, building an electronic and paperless customs environment in the direction of e-Government, ensuring information security for the IT systems of the Customs sector.
What is your opinion on the finance - state budget as well as the growth potential of finance - state budget in 2022? What breakthrough solutions in financial state budget management will be prioritized?
Minister Ho Duc Phoc:
The world and Vietnam’s economies in 2022 are expected to recover more strongly than in 2021 when countries have reopened their economies., distribution and vaccination programs against Covid-19 are effective, which will help Vietnam attract FDI and facilitate imports and exports.
However, in 2022, the financial sector identifies that Vietnam’s economy will still face prolonged difficulties caused by the Covid-19 pandemic with new and complicated variants.
The global economy still has many risks that will affect Vietnam’s economy. Therefore, economic recovery and development is a very important task, requiring the coordination of many ministries and sectors to remove obstacles in terms of mechanisms and policies and provide support measures for businesses and people.
In 2022, the Ministry of Finance sets the goal of successfully completing the tasks assigned by the Party, National Assembly and Government with a focus on mobilizing and allocating resources for socio-economic recovery and development. Accordingly, the ministry will focus on performing the following tasks: building and perfecting institutions and policies on finance - state budget; streamlining the organizational structure; promoting administrative reform; accelerating the digital government; continuing to review and propose to issue policies to support those heavily affected by the Covid-19 pandemic, creating new impetus for social-economic recovery and development.
Along with that, the ministry will strictly manage state budget expenditures in 2022 effectively and prioritize control of the Covid-19 pandemic and economic recovery and making provision for emergencies, force majeure cases, natural disasters and epidemics; manage the state budget deficit; control public debt, and provisional debt obligations of the state budget, debts of local governments; ensure the debt level within the approved limit and control the public debt safety indicators within the designated threshold and ceiling rate.
Besides, the ministry will sustainably develop and safely operate financial markets and financial services; implement market-based price management; promote equal competition among all economic sectors, improve the efficiency of resources, stabilize major balances, and support economic growth; boost restructuring, equitization and divestment of state capital in enterprises; raise the operational efficiency of state-owned groups and corporations; strengthen inspection, supervision and publicity and transparency in the management of state budget revenues and expenditures, public properties, land and natural resources; actively integrate into international finance and improve the efficiency of foreign affairs.
In the long-term, to ensure that fiscal policy is always a step ahead, contributing to effectively using and managing financial resources for socio-economic development, could you share major policies and orientations that will be implemented in the foreseeable future?
Minister Ho Duc Phoc:
In 2021, the Ministry of Finance assessed the implementation of the Financial Strategy to 2020 and sectoral strategies. At the same time, the ministry also submitted to the Prime Minister a Financial Strategy for the 2021-2030 period and sectoral strategies including Tax, Customs, Treasury, Public Debt, Reserve, Securities, Insurance, Accounting, Auditing for the 2021-2030 period and sectoral strategies that have concretized the objectives and tasks of the ten-year socio-economic development strategy for 2021-2030, the national financial plan, public borrowing and debt payment plan for 2021-2025, towards building a sustainable, modern and integrated national financial system, contributing to promoting growth, strengthening the economy's resilience, and ensuring macroeconomic stability and national financial security.
Accordingly, the Ministry of Finance will focus on implementing the following major orientations and policies:
First, research and perfect policies on state budget revenue, mobilize resources for socio-economic development, expand the revenue base, nurture and prevent revenue erosion, research and amend a number of tax laws, especially Value Added Tax, Special Consumption Tax, Corporate Income Tax, minimize the overlaps of social policies in tax legislation, further reform tax administrative procedures.
Second, research amendments on the State Budget Law in order to ensure the leading role of the central budget, strengthen the initiative of local budgets and improve the efficiency of management, allocation and use of the state budget, continue to restructure state budget expenditure towards sustainability and supporting growth, prioritize resources to realize social security policies, ensuring security and defense, accelerate the restructuring of public investment spending, focus on removing bottlenecks and strategic priorities, improve the efficiency and effectiveness of disbursing public investment capital, avoiding losses and waste, and promoting the role of public investment to attract social resources.
Third, unify the legal framework on autonomy, improve the quality and operational efficiency of public service delivery units on the basis of correctly calculating public administrative service prices according to the roadmap, continue to improve mechanisms to allow the equitization of eligible public service delivery units, associated with effective settlement of social issues, amend and supplement mechanisms and policies to attract non-state budget resources to participate in public service provision and ensure the interests of public service users.
Fourth, promote the development of stable financial and securities markets with complete and synchronous structure in terms of supply and demand factors, and continue to open the financial market in line with international commitments.
Fifth, focus on administrative reform, build a favorable, competitive and transparent business environment, especially in the fields of Taxation, Customs and State Treasury, strengthen IT application and build a digital finance platform in accordance with digital government development, increasing publicity and transparency and minimizing costs for people and businesses.
In 2021, in the context of the Covid-19 pandemic that has a heavy impact on most economies in the world, as "the gatekeeper of the economy", Vietnam Customs is under great pressure to both ensure revenue and facilitate customs clearance for businesses while ensuring the task of fighting smuggling and trade fraud. What is your assessment on the results achieved by Vietnam Customs in the past year?
Minister Ho Duc Phoc:
First of all, it must be affirmed that the overall success of the implementation of the financial - state budget tasks of the Ministry of Finance in 2021 has an important contribution from the Customs sector. Overcoming the difficulties caused by the Covid-19 pandemic to the global economy as well as the domestic economy, the General Department of Customs has achieved remarkable results.
Accordingly, Vietnam recorded US$668.5 billion in trade, up US$123 billion year-on-year. The above result has a positive contribution of the Customs sector in removing difficulties, accompanying enterprises to overcome the Covid-19 pandemic. In particular, the budget revenue from import-export activities also achieved impressive results of VND378,889 billion up VND63,889 billion compared to the assigned target, up VND43,889 billion compared to the ambitious target and up VND64,420 billion from 2020.
Vietnam Customs closely followed the directions of the Government and the Ministry of Finance, accurately assessed the situation and forecasted difficulties and challenges and developed solutions to cope with actual developments and made efforts to overcome difficulties.
In particular, the General Department of Customs requested its units to actively take many effective disease prevention and control measures to ensure customs management and create favorable conditions for businesses, including reforming procedures, modernizing customs and applying IT.
In 2021, the General Department of Customs also continued to lead the General Department in the administrative reform performance index 2020. This is also the year the General Department of Customs developed a plan and actively outsourced IT services to build digital customs and a smart customs model - an important step to further support the business community, improve the efficiency of state management of customs and soon bring Vietnam Customs to a modern level on par with developed countries in the world.
Along with impressive results in budget collection, Vietnam Customs continues to play an important role in the fight against smuggling, trade fraud and illegal transportation of goods. This is also the year Vietnam Customs presided over and worked with other agencies to handle hundreds of cases of illegal transportation of narcotics, including major cases; consecutively handled cases of smuggling medical supplies for pandemic prevention and control, as well as Covid-19 treatment drugs.
This impressive result shows the maturity of the Customs officers on the anti-smuggling front as well as the determination, initiative in the fight and prevention of smuggling, trade fraud and counterfeiting illegal cross-border transportation of goods.
In 2022, there are still many difficulties and challenges, but with a long tradition, achievements, solidarity, consensus, efforts and determination of the whole sector, I believe that Vietnam Customs will succeed in tasks in 2022 and the following years.
Thank you very much!
By Thu Hien/ Huyen Trang