Developing budget estimate in 2021: No funding allocation for projects that cannot be disbursed

Budget estimates need to follow the forecast of economic recovery. Source: Internet

For the budget of 2021, the general principle is set when developing budget estimates to follow the forecast of economic recovery and to forestall new investment flows (domestic and foreign); carefully calculating factors of increase, decrease and revenue movement due to changes in mechanisms, policies and abnormal changes due to the impacts of the Covid-19 pandemic; implement tax reduction roadmap to implement commitments on international economic integration, especially the EVFTA; implementing administrative reform measures, modernising revenue management; strengthening management, preventing revenue loss, anti-transfer pricing, trade fraud, tax evasion, strict management of prices for calculating tax; promoting tax inspection and examination; drastically handling tax debts and strictly controlling tax refunds.

Striving to increase the estimate of domestic revenue collecting from production and business activities in 2021 on average by at least 9-11% compared to 2020. Estimated revenue collecting from import and export activities on average will increase at least 4-6% compared to the estimate for implementation in 2020.

Regarding developing domestic revenue estimates, the Ministry of Finance is concerned about continuing to implement the decentralisation of revenue sources between central and local budgets and between local government levels as in 2020.

In particular, regulating the collection of charges for allowing to exploit water resources; maintaining a stable percentage of the share of environmental protection tax collection for domestic petrol and oil products and imports as for 2020.

When developing budget estimate collecting from import and export activities, agencies must take into account impactful factors such as the expected fluctuations in domestic prices and international market prices of commodities contributing large amounts of revenue; exchange rates between VND and currencies of strategic trading partners; the impact of revenue reduction from the implementation of tariff reduction roadmap under signed free trade agreements and the implementation of commitments in 2021; degree of trade facilitation and impact of technical barriers; scale and rate of progress of key investment projects that import materials and equipment; production plans of domestic refinery plants.

Regarding State budget expenditure, the draft circular stipulated the formulation of the budget estimate of development investment expenditure that will continue to allocate the budget estimate of 2021 to pay capital construction debt and recover the remaining of advance capital by the end of 2020, allocating capital for projects that have been completed, settled and handed over for use but have not been fully allocated capital in accordance with the approved settlement value yet; allocating funds for implementation of planning tasks in accordance with regulations and transitional investment projects that need to be implemented in 2021-2025 do not arrange plans and capital for projects unable to disburse.

In addition, to comply with provisions of the Law on State Budget Law about the total annual support rate for development investment capital of the central budget to the local budget to implement a number of large and special programs and projects that have great impact on the local socio-economic development, not exceeding 30% of the total capital construction investment capital of the central budget.