10 outstanding events of the Finance industry in 2022

Ministry of Finance has proactively proposed many new and unprecedented policies to support socio-economic recovery. Source: Internet

1. Proactively propose many new and unprecedented policies to support socio-economic recovery

To promptly respond to the impacts of the pandemic, from the beginning of 2022, the Ministry of Finance proactively proposed and immediately implemented the socio-economic recovery and development program as prescribed in Resolution No. 43/2022/QH15 dated 11/01/2022 promulgated by the National Assembly, with a series of fiscal and monetary support packages. In particular, fiscal policies are the main ones, accounting for about 83% of the total value of the program. Tax policies in the program have given specific support, such as reducing value-added tax by 2% to promote both production and consumption, contributing to controlling inflation with the support amount of about VND 51.4 trillion; and extending the deadline for paying taxes and land rents to the scale of VND 135 trillion.

Besides the preferential tariff and fiscal policies under this program, the Ministry of Finance has submitted to competent authorities or promulgated under its jurisdiction many policies, such as reducing registration fees; reducing import duty rates for many groups of goods to promote export production activities of enterprises; and reducing the collection rate of 37 fees and charges.

Notably, in the context of complex development in gasoline and oil prices, affecting production, business and people's lives, the Ministry of Finance submitted to the Government twice to submit to the National Assembly Standing Committee to reduce the environmental protection tax rate for gasoline, oil, grease; proposed to reduce the excise tax on gasoline and value-added tax on petroleum.

These policies have had a positive effect on keeping Vietnam's inflation below 4%, while many other economies in the world are facing high inflation.

It is expected that the implementation of the above solutions would support businesses and people with a total value of VND 233.5 trillion for taxes, land rents, fees and charges exempted and extended in 2022, of which the extension amount is about VND135 trillion; the amount of exempted tax is about VND 98.5 trillion. As of December 15, 2022, about VND 193.4 trillion has been exempted or reduced. This is also the largest amount of tax reduction in the history of the Finance industry.

2. Many state budget-financial tasks were completed ahead of schedule

Since the beginning of 2022, although facing turbulence and an unprecedented global situation, thanks to the drastic action of the whole political system under the leadership and direction of the Party; the initiative and drastic management of the National Assembly, the Government, all levels, sectors and localities; with the support of the people and the business community, the Finance industry achieved positive and comprehensive results in many fields.

Accordingly, the Ministry of Finance closely followed the requirements of reality and promptly proposed all levels to promulgate a large number of legal documents to remove difficulties for businesses and people.

Thanks to the synchronous implementation of solutions, the Ministry of Finance has successfully completed the tasks set out in the finance-state budget. As of December 15, 2022, state revenue collection in 2022 reached VND 1,691.8 trillion, exceeding 19.8% of current appropriation which is higher than the annual assessment reported to the National Assembly by VND 78 trillion; the rate of mobilization to the state budget is approximately 18% of GDP (beyond the target of 15.2% of GDP). Central revenue collection exceeded 19.3% of current appropriation; local budget revenue exceeded 20.4% of current appropriation.

State budget expenditure has ensured the tasks in the estimate and spending on pandemic prevention and control, support, social security spending, prevention and overcoming of consequences of natural disasters, storms and floods and other urgent tasks. Thanks to the efforts to increase revenue, there is a source to spend on items in the estimate and as urgent tasks arise.

Regarding the state budget balance, overspending and public debt are lower than the limit allowed by the National Assembly.

Up to this point, it can be affirmed that in 2022, the Finance sector has successfully and comprehensively completed the tasks. In the overall success of the country, there is a significant contribution of the Finance industry. Fiscal policy in the past year has been playing a pivotal role in the economy.

3. The Financial Industry is continuously leading in digital transformation

For many years, the Ministry of Finance has pioneered the application of technology in the field of finance-state budget, helping to increase efficiency and transparency in financial management, towards advanced digital finance, effectively serving the digital economy. In particular, according to the results announced by the Government's Administrative Reform Steering Committee in May 2022, the Ministry of Finance continued to hold the 2nd position out of 17 ministries and ministerial-level agencies with the results of the Public Administration Reform Index (PAR) reaching 91.9 out of 100 points. This is the 8th consecutive year (2014-2021), the Ministry of Finance is in the group of three leading ministries and ministerial-level agencies in the PAR Index.

Notably, on August 8, 2022, at the meeting of the National Committee on Digital Transformation, the Ministry of Information and Communications announced the Report on the assessment results of the digital transformation index in 2021 (DTI 2021). The Ministry of Finance continued to rank first in terms of digital transformation in 2021 for public service providers. This is the second consecutive year that the Ministry of Finance has taken the lead in digital transformation.

The Ministry of Finance has also deployed many digital services and applications to serve people and businesses, such as providing online public services with 100% of administrative procedures under the jurisdiction of the Ministry of Finance and affiliated units. Currently, the Ministry of Finance has 464 public services at levels 3 and 4, reaching a rate of nearly 60%. In particular, the number of level 3 and 4 services integrated on the National Public Service Portal is 296, reaching nearly 64%. At the same time, launching applications such as issuing codes, electronic invoices, and Etax Mobile.

With the requirement of striving to form a comprehensive and modern digital finance ecosystem in all fields, the Ministry of Finance issued Decision 1484/QD-BTC dated July 27, 2022 on the approved Digital Transformation Plan of the Ministry of Finance to 2025, with an orientation to 2030. Next, the Ministry of Finance also took October 10 every year as the Digital Transformation Day of the Ministry of Finance following Decision No. 1969/QD-BTC dated September 26, 2022 of the Minister of Finance, aiming to speed up the implementation of digital transformation tasks of the Ministry of Finance, and effectively perform the tasks assigned in Decision No. Decree No. 1484/QD-BTC.

4. Accomplish e-invoice coverage 2 months ahead of schedule

Following the success of launching the first phase of e-invoice in six provinces in 2021, on April 21, the General Department of Taxation launched the second phase in the remaining 57 provinces and cities. With a spirit of high determination and carrying out many synchronous and unified measures and solutions, the tax sector has accomplished the task of launching e-invoices more than two months ahead of schedule as prescribed in Decree No. 123/2020/ND-CP, contributing to accelerating the process of digital transformation and modernization of the tax sector in particular and the financial industry in general.

Up to now, 100% of businesses operating and using invoices have switched to using e-invoices and 100% of business households and individuals doing business following the declaration method have registered and switched to using e-invoices, with a total of over 2.1 billion e-invoices issued.

The successful implementation of e-invoices has contributed to helping Vietnam transform the way it serves people, businesses and the management method of the tax authorities in an automatic direction in order to reform administrative procedures, create a transparent and equal business environment; promote the development of e-commerce and business on the digital platform in line with the development trend of the world, bringing many common benefits to society such as saving costs, resources and environmental protection.

With outstanding achievements in implementing e-invoices, the Prime Minister has recognized and issued Decision No. 54/QD-TTg dated July 25, 2022, awarding the Certificate of Merit to the General Department of Taxation. In particular, the extensive effects of the e-invoice solution have helped the General Department of Taxation be honored in the category of "Excellent State Agencies " at the Vietnam Digital Transformation Awards 2022.

5. The Finance Strategy for 2030 creates a foundation for building a sustainable, modern and integrated national finance

On the basis of the proposal and advice of the Ministry of Finance, on March 21, the Prime Minister issued Decision No. 368/QD-TTg approving the Financial Strategy to 2030.

Accordingly, the Strategy has set specific targets, which are the average rate of mobilization into the state budget in the 2021-2025 period is not lower than 16% of GDP and in 2026-2030 is about 16-17% of GDP. The rate of mobilization from taxes and fees in the 2021-2025 period is about 13-14% of GDP and is about 14-15% of GDP in the 2026-2030 period. The proportion of domestic revenue in total state budget revenue by 2025 will be about 85-86% and about 86-87% by 2030. This is the "guideline" for all activities of the finance industry in the future, contributing to creating the foundation for building sustainable, modern and integrated national finance.

The Ministry of Finance has developed eight sectoral strategies and submitted them to the Prime Minister for approval; the Prime Minister has approved five sectoral strategies (Taxation, Customs, State Treasury, Public debt, and Accounting - auditing), and three sectoral strategies in the process of being finalized to submit to the Prime Minister. The sectoral strategies all provide key tasks and solutions to successfully accomplish the goals by 2030 of the Finance Strategy in general and the sector strategies in particular.

6. Launching many solutions to manage, supervise and promptly correct the securities market to develop transparently

In 2022, the stock market witnessed many fluctuations, affecting investor psychology. In order to develop a safe, transparent, efficient and sustainable stock market, contributing to macroeconomic stability and ensuring major balances of the economy, the Ministry of Finance continues to improve the legal framework and market development policy.

Accordingly, the Ministry of Finance submitted to the Government for promulgation Decree No. 65/2022/ND-CP dated September 16, 2022 amending and supplementing a number of articles of Decree No. 153/2020/ND-CP dated December 31, 2020 prescribing private placement and trading of privately placed corporate bonds in domestic market and offering of corporate bonds in the international market

In addition, the Ministry of Finance has also directed the State Securities Commission to strengthen the management of securities trading organizations, the issuance of corporate bonds and public companies; coordinate with competent agencies to strengthen inspection, supervision and strictly handle the situation of manipulation, ensuring the healthy, transparent and sustainable development of the stock market.

In the context of being strongly affected by the global economy, Vietnam's stock market in 2022 has experienced many fluctuations. The VN Index set a new historical peak at 1,528.57 points on January 6, 2022, stock market liquidity is quite good with an average trading value of over VND31 trillion/session. However, from the end of April to November 2022, the stock market fluctuated with many strong and prolonged declining sessions, the VN Index dropped to the lowest level of the year at 911.90 points on November 15; liquidity weakened sharply.

However, in the last trading sessions of the year, the market gradually recovered, reaching 1,093.67 points in the session on December 5. The Ministry of Finance and the State Securities Commission promptly directed, operated, and closely followed the situation, reacted to policies, and offered appropriate solutions. Thanks to that, the market is stabilizing again, strengthening investors' confidence.

8. Vietnam is one of the few countries to effectively control inflation

In 2022, the world and regional context continued to have many complicated changes. The impacts of the conflict between Russia and Ukraine, and China's "Zero-COVID-19" policy have caused energy and food prices to skyrocket. Inflation has become a common issue in many countries and in major economies, inflation has reached the highest level in the past 40 years. The fact that advanced economies tightened monetary policy to control inflation resulted in "imported inflation" and inflation in most countries in the region increased.

In that context, the Government and the Prime Minister have directed ministries, sectors and localities to implement many positive, effective and synchronous solutions in management and administration to stabilize prices in order to control inflation, contributing to ensuring people's lives. As a permanent member of the Price Management Steering Committee, the Ministry of Finance has closely and flexibly coordinated with ministries and sectors to proactively calculate and forecast factors affecting inflation, develop scenarios, and solutions to manage prices for the whole year as well as for each period to promptly report to the Government and the Prime Minister to come up with appropriate solutions to control inflation.

Accordingly, the management and administration of prices have been carefully implemented, and the prices of commodities that have been determined by the state are basically kept stable. The adjustment of domestic gasoline prices is in line with the movements of world gasoline prices. In other words, the level of gasoline price increase is lower than that of world gasoline prices.

As a result, Vietnam's average consumer price index (CPI) in 2022 continues to reach the target set by the National Assembly and the Government of less than 4%. This number is lower than many countries and regions around the world, which has made an important contribution to supporting businesses to restore production and business and promote economic growth.

9. Customs sector strives to facilitate trade, import-export turnover reaches a new record of US$700 billion

The total value of import and export turnover of Vietnam's goods in 2022 has reached a record of US$700 billion. This impressive result makes an important contribution to GDP growth in 2022 and the process of socio-economic recovery and development post-pandemic.

In 2022, the Customs sector continued to implement many trade facilitation solutions in the context of many new difficulties. Establishing a mechanism to update information for assessing the impact of the conflict between Russia and Ukraine on Vietnam's import and export activities and offers support measures for businesses; establish a working group to help solve problems related to customs procedures to support businesses in the face of congestion at the northern border gate due to China's "Zero-Covid" policy, increasing the time working of relevant Customs units from 8 am to 10 am, arrange to work outside office hours, carry out customs procedures 24/7.

At the same time, the Customs sector continued to prioritize institutional reform, reducing and simplifying administrative procedures. Promote the implementation of the National Single Window and the ASEAN Single Window; manage, supervise and ensure the operation of VNACCS/VCIS System and other centralized and secure information technology systems with a smooth transmission line; promote the development and implementation of information technology applications to create many advantages for import and export activities, towards Digital Customs, and the Smart Customs model, thereby helping to reduce paperwork, shorten the time, and reduce the cost of implementing administrative procedures in the field of import and export, fundamentally change the method of specialized inspection management.

The Customs sector has focused on combating revenue loss, promoting the prevention of smuggling and trade fraud; post-clearance audit; inspection and examination.

During the year, over 16,000 cases of violations in the customs field were handled with a value of VND5.8 trillion, collected and paid to the State budget VND 425.6 billion; the customs authority issued a decision to prosecute 45 cases and transferred to other agencies to prosecute 112 cases of violations. Notably, the customs authority handled 268 cases of drug trafficking and transportation, arresting 233 suspects; the exhibits included 153 kg of heroin and 28 bricks of heroin; 145 kg of cannabis; 49.1 kg of opium; 629 kg of synthetic drugs and 54,164 tablets, and 47.5 kg of ketamine.

10. National Assembly passes the Law on Insurance Business (amended), creating a foundation for sustainable development of Vietnam's insurance market

On June 16, 2022, Law on Insurance Business No. 08/2022/QH15 was approved by the 15th National Assembly. The Law on Insurance Business has 7 Chapters, 157 Articles and would take effect from January 1, 2023. It has amended and supplemented many regulations to ensure consistency and synchronization with the relevant legal system.

The Law has amended and supplemented many provisions on cancellation of insurance contracts, invalid contracts, and unilateral termination of contract performance; abolishes the regulation on the statute of limitations for initiating lawsuits, the time when the liability of the contract arises, etc. to ensure consistency with the Civil Code and makes it easy to apply. The provisions of the new Law also clearly classify the types of insurance contracts corresponding to the types of insurance; specifies the insured objects and insured interests for each type of insurance contract; and enhance the responsibility of the subjects participating in the insurance contract in providing information.

Along with that, the Law on Insurance Business also supplemented regulations on the principles of entering and performing insurance contracts; the right to agree to enter into many types of insurance contracts; additional time to consider participating in life insurance to ensure the right to self-negotiation between the parties in entering into insurance contracts and many other important legal provisions.

The Law on Insurance Business, when implemented, is expected to support the Vietnamese insurance market to grow stronger in both size and quality in the future.