A challenging and successful year of Finance sector

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Minister of Finance – DinhTien Dung

Turning disadvantages into advantages

Putting aside worries, chaos of work, Minister DinhTien Dung with a friendly smile began talking with us.

He said: "2016 is the first year of implementation of the National Congress Party Resolution the XIIth and the 5-year Economic - Social Development Plan 2016-2020. Till now, we can breathe a sigh of relief that the finance sector has had the first solid steps on the new journey and completed all assigned tasks. "

Recalling the challenging early days of 2016, the Minister DinhTien Dung thoughtfully: "Since late 2015, we submitted the draft budget to the National Assembly in 2016 with the price of oil at $US 60 / barrel. After that, the oil price fell. The falling oil pricemeant budget deficit, it also meant difficulty handling the Financial sector".

Yet fortunately, this difficult problem had been solved successfully in the budget year 2015, so when the the oil price continuously threatened the budget of 2016, the Ministry of Finance took the initiative to build the scenarios with oil prices rate from $US 30 to 60 / barrel. Finally, at the end of the year, the average annual oil price was only about $US 43 USD / barrel, dropped $US17 / barrel over the estimate but insignificant impact as it had been in 2015.

Not only the oil price, in 2016, economic growth was lower than forecast; natural disasters, floods, pollution of the marine environment in some Central provinces significantlyeffected the implementation of State budget revenue, especially the Central budget revenues.

Dear Minister, how didthe Finance sector face these difficulties?

"From the story of oil prices, we defined more clearly the importance of the work of analysing and forecasting. Therefore, revenue progress was updated more often besides the grip of economic, market, and price developments to assess the impact to State budget collection, evaluate correctly the situation and forecast the possibility of collecting monthly, quarterly and annually. Until now, we have learnt lessons of experience, that is to do well the work of forecasting for quick response. So we can actively turn disadvantages into advantages" –Minister summed up.

Nurturing collection – saving expenditure

Minister DinhTien Dung said: "The risk of budgetary imbalances existed, of course, we could not wait any longer. As soon as the National Assembly decided on the general estimate, the Ministry of Finance requested to allocate the budget to units for in time systematizing. On that basis, alldepartments of Taxation and Customs discussed with local authorities about solutions to complete the task of the State budget revenue and to increase revenue"

Referring to the locality, the Minister pronounced that the coordination between the Ministry of Finance with the local authorities as well as with other ministries and related sectors is closer "than ever".

"Inbusiness trips, when discussing with local leaders about the task of collecting the budget, I have always suggested both sides to jointly operate. The Ministry is vertical, managing about organization, personnel, and professional activities, but the leadership of the local Party is very important. Unit completes the task means that provinces and cities do too. Provinces and cities complete the task meansthe ministry completes it as well. If we all work together, we could overcome any difficulties"- the head of the Finance sector shared.

According to the Minister, the basic, long-term solution to increase budget revenues still is stimulating economic growth through reforming administrative procedures, removing difficulties for enterprises. With that orientation, all units of the Finance sector have coordinated closely with other sectors solving problems promptly for enterprises, facilitating business expansion and development. Taxation andCustoms Authorities modernizing management,taxes declared and paymentactivities in order to reduce time and costs for businesses, people, then collecting revenues for the State budget in time.

In 2016, going along with the Resolution No. 19 from 2 years ago, the Government also issued Resolution No. 35/NQ-CP on supporting and developing enterprises to 2020. The Ministry of Finance has developed project Resolution of National Assembly Parliament on some tax solutions to remove difficulties and obstacles and promote the development of enterprises, which proposes a number of solutions for enterprise income tax, personal income tax and eliminates tax debt. "These solutions have been affected in many ways, contributed to reduce operating costs for business, improved competitiveness and created equality and convenience for enterprises in accessing resources and business opportunities. Well-developed enterprises lead to well-developed economy and well-collected budget revenues "- Minister DinhTien Dung evaluated.

Analysing the highlights of 2016, he did not forget to recall the measures that the whole sector has been and will be regularly conducted to ensure budget revenues such as increasing inspections, checking to prevent losses; preventing price transferring; anti-smuggling, trade fraud and tax evasion; promoting tax arrears management.

"Last year, we continued publishing tax debts. Thanks to the press for being withus to propagate and create transparency in information, create a fair business environment, avoid the situation where tax-paidenterpriseswere equal to not-paid ones,or well-compliant ones equal to not-compliant ones, collect State budget. Bottom line is in the operation activity, to be effective sometimes it has to be drastic" – shared the Minister.

Thanks to comprehensive implementation in the State budget revenueresult in 2016 reached 1,094 trillion dong, exceeding the estimate of 79.6 trillion vnd, increasedby 7.8% in comparison to 2015, contributed to increase the resources to meet the important political tasks, and task of expenditure according to estimate, contributed to maintain the State budget deficit by Resolution of the National Assembly.

Prime Minister Nguyen XuanPhuc giving Uncle Ho photo for the leadership of the Ministry of Finance. Photo: Huu Linh

Dear Minister, if it is a balance thenboth sides must be equal. Budget revenues was well but what about the expenditure?

Minister DinhTien Dung smiled: "Yes! Collecting enough without tight-managed spending, thebudget balance will also be shaken. Therefore, the Finance sector has always focused on urging and strengthening supervision other ministries, sectors and localities to operate spending State budget tightly as estimate, completely thrift, follow regulations, integrating policies, building saving plans; tightening right from the allocating budget stage andnot issuing a new policy regime when there is no guaranteed source; reviewing and cutting maximum expenses on conferences, seminars, trips abroad; procurement of public property has to be according to the estimates and not to suggest additions; cut expenditure to priority focus for the goal of building new rural areas, poverty reduction, job creation for workers".

Speaking of saving, last year, an event that took media attention was the Ministry of Finance decided to assign transfer cars from home to the office for a number of leadership positions. Public opinion was that the Ministry of Finance - the authority responsible to the Government for public expenditure and public property management - leading by a very effective implementation that has more positive impact other ministries had ever done. "With this move, we just wanted to make one step further to specify a management reform policy, and using of public property building the image of the Government and Party’s leaders closer to people. This is what has to be done and should be done"- the Minister said.

And the efforts of the Finance sector that has been reciprocated by the result of the State budget expenditures in 2016 were strictly controlled. The increasing figure was just 1.9% over the estimates.

Institutional reform is the number one priority

One of the special features in the Minister DinhTien Dung is a priority to the work of institutional building. He always reminds Financial officers hat: "All missions areimportant but the most important is institutional reform."

In 2016, theMinistry of Finance has built and submittedto the Government to submit to the Politburo a Resolution on guidelines and measures to restructure the State budget, public debt management; and to submit National Assembly a Resolution on the National 5-yearFinancial Planning period 2016-2020. "These are important resolutions to set out orientations and major measures onthe State budget revenue, expenditure and deficit, the principles of the State budget balancing, expenditure limit for investment development missions of the next 5-year period; are the basis for us to deploy annual financial - budget tasks"- the Minister stressed.

In addition, the Ministry of Finance completed 41 projects under the work program in 2016, under the authority issued 294 legal documents guiding the implementation of policies and regimes on finance - budget ; establishing the list of 182 administrative procedures needed to be reviewed, simplified. Particularly in the field of Taxation and Customs checked and abolished 92 administrative procedures. Thereby, reduced the paid tax hours to 117 hours, shortened theCustoms clearance for import and export time, saved costs, facilitated business and taxpayers.

"To promote even growth requiresto develop financial policies, from taxes and charges to land. Therefore, most of the documents issued by the Finance Ministry or the proposals focus on solving problems for businesses, remove difficulties for business production, reformpublic administration. These aregreat significant figures. "

Does that mean keeping issuing policies to support businesses is still the priority of Finance sector in 2017, Minister?

"Yes!" - Minister affirmed - "The continuous perfecting; promoting the reform of administrative procedures, especially in the field of Tax and Customs; improving the investmentand business environment, enhancing national competitiveness remain priority tasks of the finance sector in the coming year. Besides, of course, are the initiatives in solutions for completing the State budget revenue as estimates; operating organizations, managing the State budget tightly, prescribed as regulations, not wasting; enhancing the efficiency of using the State budget; controlling public debt within the allowed limits; accelerating equitization of SOEs".

In 2017, the context of economy still has lots of difficulites and missions of the Finance sector in the new period is very large and heavy, Minister DinhTien Dung believes that those solutions would help the Finance sector to "harvest" a lot more success in 2017.

"Together, we will overcome difficulties" was a statement that the Minister reiterated many times, not just during the conversation with us but also a message sent to all the officials and employees in the Finance sector. That statement helped us to realize a significant respect from the head of the Finance sector. In his point of view, effort was instrument but the unity is strength to help the whole sector to overcome "waves" and "do not fall over".

One stormy year 2016 has passed. Finance sector has made a smooth start for a new phase, a new journey with many challenges and difficulties. Believing that under the guidance of thispassionate and fierce "Commander",thefinance - budgettask will have more breakthroughs in this year -DinhDau 2017.

Vietnam Customs is on right track on the road to reform

In the field of Customs management, reform, modernization, trade facilitationefforts over the last period of time has been recognized and appreciated by the business community. Do you have any comments on this issue, Minister?

Minister DinhTien Dung:

I could say, the Customs authority has become one of the leading units on the reform of administrative procedures, application of information technology and innovating management methods.

This represents primarily through efforts to improve the legal system. If the Customs Act 2014 is the legal foundation comprehensively reformed Customs activities, then in 2016, the Law on Export and Import Tax was enacted to create a legal basis fordeeper international integration, encourage the production development, promote exports and reasonable, conditional, selective subsidy, consistent with the integration process. This achievement has an important role of the General Department of Customs advised the Ministry of Finance to submit the to the Government to submit to the National Assembly for adopting.

VNACCS / VCIS electronic clearance system for imported goods has stable operation, created a breakthrough in reform and modernization. Electronic Tax Payment Portal has also attracted the participation of 33 banks, which contributed to 94% of Customs revenue. National Single Window officially connected with the 11 of 14sectors, 33 procedures and more than 150,000 sets of records.

Those efforts of the Customs force are not only recognized by leaders at all levels, but also by the business community with good reviews.

It can be affirmed that Vietnam Customs is on the right track in the process of facilitating businesses and people, increasing transparency, shortening time and reducing cost of implementing administrative procedures.

According to you, to do this work better, in the future, what should Customs authorities do, Minister?

Minister DinhTien Dung:

Besides the well deployment tasks of reforming administrative procedure to achieve the assigned targets of the Government, the General Department of Customs should actively implement the approved content in the reform, development and modernization of the Customs authority plan 2016-2020.

The General Department of Customs: Efforts to exceed budget revenue

The goal that the Customs authority should direct to in 2017 is to continue to facilitate and strengthen control inCustoms management performance to enterprises, individual organizations and in order to promote security and facilitation of international trade, ensure revenue, security, social security and public health on the basis of promoting the exchange of information and cooperation between related ministries, agencies and organizations. At the same time be the leading authority of the 389 National Steering Committee, the General Customs Department actively cooperates with functional forces, local authorities to strengthen the fight against smuggling, illegal transportation of goods across border, commercial fraud and counterfeiting.

Especially, step by step building electronic Customs authorities based on the electronic ministries, sectors architecture modelsto implement the request of the Government on implementing electronic government.

We would like to thank you, Minister!