MoF to propose to extend policies to support people and private sector: Minister of Fiance Ho Duc Phoc

VCN - VCN – After promulgating policies, the Ministry of Finance regularly reviews and assesses supportive policies. When people, the private sector, and the economy still face difficulties, the Ministry of Finance will promptly propose to extend policies based on careful consideration and cancellation while ensuring the financial and state budget tasks, said a Member of the Party Central Committee, Minister of Finance Ho Duc Phoc about the role of fiscal policy in the economic development.
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MoF to propose to extend policies to support people and private sector: Minister of Fiance Ho Duc Phoc

Economic support policies account for about 8.3% of GDP, much higher than other countries with the same economic size

How do evaluate the preferential policies on taxes, fees, and charges to support people and businesses in recent times?

First of all, it is affirmed that in recent times, the Government has made great efforts to support the economy by implementing a series of fiscal and monetary policies in an appropriate and effective manner.

During the 5-year term 2021 - 2025, the Economic Recovery and Development Program that the Government issued early the previous year is an important highlight. The fiscal support package plays a key role in boosting economic recovery and development.

We have implemented many policies to exempt, reduce, and defer taxes, fees, and other revenues. The supportive policies have accounted for about 8.3% of GDP, much higher than other countries with the same economic size, and fiscal policies play an important role.

The total amount of supportive packages is about VND129 trillion in 2020, about VND145 trillion in 2021, and VND233 trillion in 2022.

In 2023, in the spirit of accompanying businesses and people to overcome difficulties to recover and develop the economy, the Ministry of Finance will submit to competent authorities and promulgate support policies worth about VND196 trillion.

Over the past four years (2020-2023), the fiscal support package worth about VND700 trillion has helped enterprises, people, and the economy restore and grow.

The Ministry of Finance advised the Government and the National Assembly to issue Resolution No. 43/2022/QH15 of the National Assembly on fiscal and monetary policies to support the socio-economic recovery and development program after the pandemic. The support package is estimated at VND347 trillion.

In 2023, the Ministry of Finance issued a circular regulating the reduction of 35 fees and charges in the fields of securities, healthcare, citizen identification, and project appraisal of construction investment projects... The effective date is from July 1 to December 31, 2023. The reduced amount will reduce state revenue by about VND700 billion.

Notably, when the policy was issued, the Ministry of Finance continuously reviewed and evaluated it. If the private sector and people still suffer from difficulties, the Ministry of Finance will propose to extend the policies, ensuring the financial and state budget tasks.

Recently, although the domestic industries and fields have been restored and shown positive prospects, and many policies and solutions to remove obstacles have been effective, the difficulties and challenges are more than opportunities and advantages, the Ministry of Finance has proposed financial solutions to promote aggregate domestic consumption demand.

The Ministry of Finance has researched and proposed solutions to reduce taxes, fees, and charges for 2024 such as a 2% VAT reduction, reduction of environmental protection taxes on petroleum products as applicable in 2023; reduction of export and import tax rates to support domestic production and business; reduction of the rate of fees and charges...

Making great efforts to improve institutions to help the private sector develop

You are very interested in improving legal policies and reforming financial-budget institutions, could you tell us more details about this?

Institutional breakthrough is the best way for strong and sustainable development. Institutional improvement is one of the pillars to create development momentum. The Ministry of Finance makes great efforts to improve institutions to support businesses in developing their operations.

To keep the promise and always support the private sector and people, the Ministry of Finance regularly reviews legal policies, cuts cumbersome administrative procedures, and does not issue “sublicenses” affecting businesses and people.

The Finance sector aims to ensure that financial policy is always one step ahead, contributing to the effective use of financial resources to serve the country's socio-economic development.

The Ministry of Finance promptly proposes to promulgate legal documents to remove difficulties for businesses and people, control upward pressure on prices and inflation, and contribute to supporting economic and social recovery and development.

In the context of the COVID-19 pandemic, many legal policies need to be amended or issued to keep up with reality, the Ministry of Finance has urgently drafted policies to meet practical requirements. The Ministry has promptly issued programs and projects that are not included in the program for developing laws, ordinances, or circulars that must be newly promulgated or amended, or supplemented inconsistent with the progress.

All policies of the Ministry are aimed at people and businesses. For example, in 2020-2023, the Ministry has proactively proposed, submitted to competent authorities issued many solutions in the financial sector, and resolved difficulties for businesses and people.

These are solutions for extending, exempting, and reducing taxes, fees, charges, and land rent; exempting, and reducing corporate income tax, personal income tax, VAT, import tax, environmental protection tax, and fees and charges. The Ministry of Finance has submitted to competent authorities and issued 56 legal documents.

In the near future, the improvement of financial institutions will be associated with administrative procedure reform to facilitate people and businesses. The financial institutions will quickly approach international practices and meet the requirements of integration. The ministry will focus on restructuring the state budget, including restructuring of revenue as well as budget expenditure and public debt management as required in Resolution No. 07-NQ/TW of the Politburo.

Implementing special policies to respond to special status

How does the implementation of fiscal solutions, extension, and reduction of taxes, fees, and charges affect the completion of financial and budgetary tasks?

The drastic and comprehensive implementation of financial policies has had a positive impact in supporting businesses and people to stabilize production and business. People's life has returned to normal, contributing to macroeconomic stability and facilitation to promote economic recovery and growth.

The support packages of tax reduction, especially the reduction of VAT, excise tax, and environmental protection tax on petroleum products, have effectively curbed inflation, contributing to the recovery of production and business activities and Vietnam’s economic growth.

The public debt and government-guaranteed debt remain at a sustainable level, about 36% of GDP in 2023 before falling to about 34.4% in 2025, much lower than the threshold of 60% set by the National Assembly.

Although we have achieved many successes in operations, we must also see that from now until the end of the year there will still be many difficulties. According to the Resolution on 2023 budget estimates, the National Assembly decided that the total state budget revenue in 2023 is more than VND1.6 million billion. However, due to economic difficulties, the completion of the revenue target is still a challenge for the national budget and local budgets, especially for localities with large revenues from land and real estate activities.

Meanwhile, the challenge in budget spending is that investment spending is still lower than the plan. Investment spending plays an important role in the fiscal support package but disbursement progress is slow. Many investment expenditures from the Socio-Economic Recovery Program have not yet been disbursed. Although the National Assembly Standing Committee has provided many solutions, investment spending is still inappropriate. This will have a major impact on economic growth in the period 2023-2025.

I think that special policies should be implemented to respond to the special status. One law can be used to revise many laws to resolve bottlenecks.

Currently, the increase in the economy's aggregate demand is the core matter, so fiscal policy is only one of the solutions to solve the difficulty. It is necessary to implement solutions such as: implementing monetary policy, and investment policy, reforming administrative procedures, and effectively improving the investment and business environment. Accelerate disbursement of public investment, use public investment to support private investment, and mobilize all resources of society.

It is necessary to continue to comprehensively implement solutions to remove difficulties for production and business enterprises, especially in the real estate sector; and promote the business environment to attract foreign direct investment.

Although the economy has restored, the difficulties of exports and the narrow market have created pressure on Vietnamese firms. Therefore, it is necessary to continue to remove difficulties, expand markets, and increase the export of Vietnamese goods. To do this, there needs the cooperation of ministries and sectors to promote investment, connect supply and demand, find partners, and develop potential export markets.

It is necessary to mobilize credit capital and other resources to support business production. At the same time, reduces cumbersome administrative procedures, and removes difficulties for private investment projects, projects on land, renewable energy …

I think that the effective implementation of fiscal policy in 2023 amid the world has faced difficulties and the economy has not achieved breakthroughs in its growth model is a formidable task. From now until the end of the year, the Ministry of Finance will deploy solutions to collect sufficient revenue and support people and businesses.

In the period 2024-2025, it is necessary to implement fiscal policies in a proactive and flexible manner in short-term adaptation while complying with the principles of budget balance and fiscal discipline in the long term. The world is facing many unusual changes, so we need to provide special solutions to respond to the situation.

The Government as well as the Ministry of Finance continues to monitor the domestic and international economic status to adjust fiscal policy. Accordingly, both resolving problems for the economy and balancing the State budget to harmonize benefits and share difficulties between the State and private sector.

Thank you very much, Minister!

By Hoai Anh/Ngoc Loan

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