Budget surplus: To make a dream come true

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Three direct revenues from production - business activities reached estimates. Photo: HV.

Bright spot from production and business

Looking back on the overall financial - budgetary activity from the beginning of 2019 until now, State budget management work stands out as a bright spot. The monthly budget report constantly emphasises the phrase "continuing surplus" as a joy, the pride of those on duty to keep the national "pocket".

In the first quarter of 2019, the State budget is surplus. At this time, experts still believe it is "lucky" objectively because at the beginning of the year, due to the geographical balance of the tax settlement, the collection progress is usually quite high (381 trillion VND, equal to 27 percent of the estimate), while demand for spending at the beginning of the year was low (more than VND 315 trillion, equal to 19.3 percent of the estimate). But by the end of seven months, the budget is still in surplus.

Where is the cause?

First of all, from the revenue side, the positive role of economic growth and the efficiency of the manufacturing and business sector must be acknowledged in this story.

Looking at the total seven-month State budget revenue, it can be seen that, out of VND 891.7 trillion, domestic revenue reached VND 724.68 trillion, 61.8 percent of the estimate, up 12.8 percent compared to the same period of 2018. Along with the positive developments of the economy from the end of 2018 to now, the production and business activities of some sectors in the first months of 2019 maintained high growth momentum compared to the same period. The index of industrial production (IIP) in seven months increased by 9.4 percent, of which the manufacturing and processing industry increased by 10.7 percent; total retail sales of consumer goods and services increased by 11.5 percent over the same period in 2018.

Besides, among five out of 12revenues reaching about 56 percent - 60 percent of the estimate, there are three direct revenues from production and business activities: Revenue from state-owned enterprises (56.9 percent), revenue from foreign-invested enterprises (59.1 percent) and non-state economic sectors (60.1 percent). This is a good sign because this revenue has been the concern of the finance industry in the past few years.

Second, there is no denying the efforts of the finance industry. Tax authorities have focused on deploying revenue from the beginning of the year, reviewing and ascertaining subjects and budget revenues in the area, checking the tax declaration, tax finalisation of enterprises, and striving for the right collection, fully and promptly collecting the arising amount into the State budget. As a result, the tax declaration and payment results of enterprises in the first seven months of 2019 are relatively positive and uniform in major economic sectors. Estimated nationally, there are 53 out of 63 localities with domestic revenue reaching the estimated progress (over 58 percent), of which 42 localities collect more than 61 percent of the estimate; 56/63 localities with higher revenue than the same period, and the seven localities with lower revenue than the same period are Ha Giang, Thai Nguyen, Bac Giang, Son La, Dien Bien, Quang Ngai and Binh Phuoc.

Income from import and export activities also prospered, reaching 130.5 trillion VND, equaling 69 percent of the estimate, up 11.7 percent over the same period in 2018 on the basis of estimated tax revenue of 205 trillion VND, 68.2 percent of the estimate, an increase of 17.9 percent over the same period in 2018. To achieve this result, Customs has strengthened the post-clearance inspection; closely coordinated with the functional forces to fight against smuggling, trade frauds and fake goods. Thanks to this, it has had a positive impact on the revenue of this area.

Resolutely tighten spending

Of course, a surplus is not only thanks to good revenue but also good spending control. Total State budget expenditure in seven months reached 776.86 trillion VND, equaling 47.6 percent of the estimate, up only 2.3 percent compared to the same period in 2018. From the beginning of 2019, implementing Directive No. 31 / CT-TTg of the Prime Minister and the Ministry of Finance have requested the budget estimating units under the ministry to increase discipline in the observance of the law on the State budget. At the same time, in many times sharing about this issue, Minister of Finance Dinh Tien Dung always asserted that before the requirements of national development, the spending was huge, especially for investment in developing the infrastructure, social security, hunger eradication and poverty alleviation, new rural program development and disaster recovery led to overspending from the State budget. That forces us to tighten discipline and discipline in budget spending.

To reduce overspending and spending, the Ministry of Finance has grasped and implemented the Politburo's Resolution No. 07-NQ / TN on restructuring the budget and public debt; Resolution No. 25/2016 / QH14 of the National Assembly on the 2016-2020 national five-year financial plan with the goal of reducing the state budget deficit in the 5-year period from 2016 to 2020 to not exceed 3.9 percent of GDP, by 2020. in excess of 3.5 percent of GDP, the Ministry of Finance has advised the Government, submitted to the National Assembly measures to strictly control the State budget, and reduce unnecessary expenditures; strengthening the inspection and supervision of the management and use of the state budget, the state of public debt. At the same time, strengthening management of collection, inspection, examination, anti-transfer pricing, tax evasion.

The Ministry of Finance has also requested ministries and branches proactively arrange and transfer public vehicles, limiting to the lowest funding for public car purchases. Since 2017, maximum recurrent expenditures of ministries and central agencies have been included in the norms to make budget allocations more equitable. Expenses related to conferences, seminars, commencement, inauguration of works, exits and delegations are fully saved; no spending policy was issued when there were no guaranteed resources; minimise the addition of estimates, strictly control the annual budget transfer. Or the initial results from the arrangement, merger, streamlining the apparatus of the Finance sector in particular and the institutions. Government officials and localities have generally reduced many "burdens" of spending.

Not only saving, to "burden" the budget, over the past time, the Ministry of Finance has also managed the issuance of Government bonds to effectively use State funds, while ensuring the source of capital, timely repayment of principals and contributions to market development and restructuring of public debt. The total number of issued bonds in the last seven months is nearly 137.9 trillion VND of Government bonds with the average term of 13.62 years and the average interest rate of 4.93 percent per year. The State Treasury system has controlled about 454,258 billion VND of expenditures on investment and recurrent expenditures, thereby detecting 6,392 inadequate expenditures according to regulations, requesting additional necessary procedures and the real amount refused to be paid was VND 16.2 billion.

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Nearly two-thirds of the time in 2019 has passed with positive operating results. Maintaining a surplus for the budget may require even more work of the finance people.