Multiple drivers propel positive growth in budget revenue

Dr. Bui Dang Dung

According to the Ministry of Finance, as of the end of October 2024, budget revenue reached 97.2% of the annual target. In your view, what factors have contributed to this positive outcome?

Despite the numerous challenges facing the national economy, this is an unexpected and highly impressive result. I think it can be attributed to several key factors.

First, the significant efforts by tax authorities, the Government, and relevant agencies to promote economic development and maintain stability have been crucial. Alongside these efforts, we’ve seen a strong recovery in the private sector this year. Initially, there were concerns about business closures and restarts, but the economy has shown remarkable improvement. These indicators demonstrate the private sector’s substantial contribution to budget revenue.

Second, timely policy adjustments by the Government have played an essential role in boosting revenue collection. Flexible monetary policies, particularly reductions in bank interest rates, have enabled businesses to access financing to sustain production and operations. Additionally, the reduction in value-added tax (VAT) has been an effective measure to stimulate consumption, creating momentum for production growth.

Third, public investment disbursement has been a significant driver. The Government’s decisive directives to accelerate public investment have stimulated economic growth and attracted additional private-sector capital, contributing substantially to increased revenue.

Furthermore, anti-corruption and anti-waste measures have had a significant impact. The strong leadership of the Anti-Corruption Steering Committee has ensured the efficient use of state budgets and public investment funds.

Lastly, public support and oversight, as well as the consensus across all levels and sectors in implementing policies, have generated enthusiasm and breakthroughs in production and labor activities.

As a voter, I feel optimistic and confident in the Government’s leadership and direction. This result is truly commendable, reflecting the efforts of the Government, functional agencies, and the business community in difficult economic times. With this foundation, I hope we can achieve outstanding results in revenue collection for the rest of 2024 and prepare effectively for 2025.

Some argue that part of this success stems from a lower revenue target this year. What is your opinion on this?

In my view, budget revenue targets are not set arbitrarily but must be based on numerous factors, including the economic situation, tax and fee indicators, and the actual state of businesses. The Law on State Budget clearly stipulates that revenue estimates must be realistic and achievable, not intentionally low to guarantee success.

In previous years, we set budget targets with growth rates ranging from 12-15%. However, given the current economic context, setting a target increase of 5-7% is reasonable and reflects the reality.

That said, if we achieve higher-than-expected revenues, such as from oil or rapid growth in certain sectors, the Government must provide transparent explanations and ensure accountability in managing these additional funds.

How has digital transformation impacted budget revenue?

Digital transformation has had a profoundly positive effect on revenue collection, particularly in the e-commerce sector. Previously, collecting taxes from online transactions was challenging, as many businesses and individuals operating on digital platforms did not fully comply with tax obligations. However, thanks to digital transformation, tax authorities can now effectively manage online transactions and improve tax collection efficiency.

We’ve already seen cases of businesses voluntarily declaring and paying personal income tax amounting to billions of dong. This reflects a positive shift brought about by digital transformation. Businesses can now declare taxes online without needing to visit tax offices, saving both time and costs.

Moreover, the application of technology in tax management has enhanced oversight and reduced tax evasion. Businesses and individuals trading on digital platforms are increasingly aware of their tax responsibilities and proactively fulfilling their obligations.

What are your thoughts on financial and budgetary planning for 2025 given the current context?

To prepare for 2025, I believe the Government must base its revenue projections on realistic and reliable economic forecasts, ensuring they are feasible and secure. The priority is to maintain national financial security and stability while creating favorable conditions for business development.

Thank you for your insights!