Member of the Party Central Committee, Minister of Finance Dinh Tien Dung: The financial sector is breaking through to transform itself

At this time, we can see that the results of the implementation of financial tasks - state budget in 2017 was not easy. Especially in the last months of the year, when the risk of budget imbalance was present.Budget collection progress wasnot slow,and the return to the central budget was difficult. Could the finance sector have any key solutions to overcomethem?

This wasnot the first year that the Finance sector faced the challenge of balancing the budget. From the experience of previous years, in 2017, the whole industry raisedits spiritbyactively implementing solutions from the beginning of the year. When the National Assembly approves the cost estimate, the Ministry of Finance asked the system units to assign estimates to each department or sub-department for timely implementation.

The solution to increase budget revenue, thebiggest motive was to stimulate economic growth through reform of administrative proceduresby removing difficulties for businesses. With that orientation, the Finance branch units worked closely with relevant ministries and agencies to solve problems for enterprises, thus creating conditions forthem to expand and develop their production and business. Tax offices and customs agencies sped up the modernization of management, declaration and payment of taxes in order to reduce time and costs for enterprises and people. Happily, in the World Bank's World Business Report 2018 (released on 31st October, 2017), Vietnam's overall tax index has increased 81 places compared to 2017, 86/190 countries and territories. In which the index of tax payment is assessed in 4 consecutive years is one of the indicatorsto have the most positive impact on the general business environment of Vietnam. The 24/7 electronic payment and customs clearance scheme, which is coordinated by the General Department of Customs and banks, was also applied, initially to save human resources, ensure safety in management,and simplifying the process of tax collection. This enabled accurate deduction of tax debts promptly after tax payment, creating favorable conditions for businesses. The operation of automatic customs management system at seaports and airports has created favorable conditions for import-export enterprises and helped the customs offices to manage effectively.

These solutions have and will have many impacts, contributing to the reduction of operating costs for enterprises, improvingcompetitiveness,and also creating equality byfacilitating enterprises in accessing resources and business opportunities. Business is good, the economy develops well, so the budget revenue will also be good.

Apart from creating favorable conditions for production and business, in 2017, the finance sector will intensify the inspection and examination of risky enterprises having signs of violation.They are to continue the solutions to collect tax debts, fight smuggling, trade fraud, etc., to prevent maximum loss.

Due to comprehensive implementation, the State budget revenue for 2017 to 31st December, 2017 was 1,283.2 trillion VND, exceeding the estimate by 5.9%; The central budget wasensured, contributing to increasing the resources to meet important political tasks, spending tasks according to budget estimates and reducing the budget deficit compared to the National Assembly's Resolution.

Budget revenue is difficult to balance, so is the issue of saving and tightening discipline in budget spending one of the requirements that the Ministry of Finance has drastically made in early 2017, Minister?

Exactly. From the beginning of 2017, the Government and the Prime Minister have focused on directing the ministries and central and local agencies to control the state budget expenditure in 2017 closely and in accordance with the policies, regimes and assigned estimates. To take the initiative in reviewing, arranging spending tasks, integrating policiesfor thoroughly saving expenditures right from the stage of budget allocation and in the course of implementationwithreductionsof budget for recurrent expenditure tasks until 30thJune 2017, not yet allocatedand implemented (except for cases decided by the Prime Minister).

According to the Ministry of Finance, the ministries, branches and localities have seriously implemented the proposed solutions.They have carriedout a review and report on the rearrangement of public cars, reviewed the house and land premises and the plans for re-arrangement and treatment of the house and land funds of the ministries and branches which have been relocated to the new offices.Organized budget inspection missions in some ministries, branches and localities; inspecting a number of capital construction investment projects funded with state budget capital etc., in order to detect, correct and promptly handle violations.

In particular, in June 2017, the Ministry of Finance submitted to the Government,and the National Assembly passed the Law on management and use of public assets, with new standards and norms, and the regulation of compulsory package with motor vehicles. The implementation of this Law will save the budget more effectively in the following years.

In 2017, for the first time in 10 years, we manage budget deficit both absolutely and relatively. That has helped control public debt, falling from 63.6% last year to 61.3% of GDP. This was a great effort by Finance. Could you share some ofthe solutions that have been implemented to obtain the results?

In the context of our public debt rising very high, our greatest pressure is how to ensure the safety of public debt and ensure the capital to invest in development.

To ensure the above objective, institutional improvement is a priority for the financial sector. Following Resolution No. 07-NQ/TU of the Politburo on policies and measures to restructure the state budget and public debt management. This isto ensure a safe and sustainable national financial system promulgated in 2016 to 2017.The Ministry of Finance will continue submitting to the Government for the National Assembly to adopt the Law on Public Debt Management (amended) with more stringent new regulations such as, tightening the conditions for issuance of Government guarantee,funding for important projects, focusing on management of public debts, and toconcretize the scope of public debt, etc.

In addition, the Finance sector has always managed to keep pace with the state budget deficit and the plan to cut budget deficit. In 2017, the National Assembly decidedthat the state budget deficitwas 178,300 billion VND, equivalent to 3.5% of GDP. In fact, the state budget deficit in 2017 was kept at 174.3 trillion VND, equivalent to 3.48% of GDP. Thus, this is the first time in 10 years we have kept tothe planned overspending. In 2018, in response to high investment demand, the Government proposes and Congress approves a 3.7% for over expenditure. According to calculations, next year, the deficit will be reduced to 3.6% and 3.4%, ensuring the purpose of the Resolution is less than 4% for the 5-year period and reaching below 3.5% by 2020. The gradual reduction of overspending is necessary to control the rate of public debt growth, as well as the control of the public debt ceiling.

Another solution is to strengthen public finance inspection, auditing and transparency, especially tight control of public investment. This is to improve the legal framework on investment, bidding, inspection, control and audit. Over the past years, the inspection, audit, including financial levels have been in sync. Of course there are still many problems, but initially we have assessed the current situation and also have the appropriate solution to handle them.

In addition to securing policy instruments, public debt monitoring indicators and improving public debt management, the focus is on restructuring public debt in the direction of increasing domestic debt and reducing foreign borrowing, byincreasing the termand reducing interest rates asthe important solutions. Recently, the Ministry of Finance has extended the bond issuance period. If 2011 average maturity is 3.9 years, it is 8.75 years in 2016 and 13.52 years in 2017. The interest rates are gradually decreasing, from 12.01% in 2011 to 6.48% in 2016 and 6.07% in 2017.

In general, we still have to keep tight control over public debt, but the first step in the results as well as the solutions we are implementing arein the right direction, contributing the public debt to 61.3 %% GDP.Government debt is 51.6%, lower than the ceiling allowed by the National Assembly of 65% and 54%.

InAPEC year 2017, the process of APEC Finance Minister has been successful. Could you share the achievements of this process?

At this APEC Ministerial Meeting, the Ministry of Finance has proposed four priority themes, including long-term investment for infrastructure, erosion of the tax base and the shift of profits, finance and disaster risk insurance,and financial cover. Viet Nam's proposals have been heatedly discussed by delegates at the Joint Declaration. This is the concretization of the national theme of "Creating new dynamism, fostering shared future",proposed by Vietnam in APEC 2017 as well as following the Cebu Action Plans that APEC Finance Ministers passed in APEC 2015.

The Joint Declaration of the APEC Finance Ministers' Meeting has shown a commitment to continue to coordinate fiscal, monetary and structural reforms to achieve strong, balanced, sustainable and inclusive development. The Finance Ministers also affirmed that the APEC Finance Ministers' Progress Process was a positive forum for strengthening policy cooperation and exchange of experiences among economies in the region and appreciating the role of the Ministry of Finance. It was in the chair of the 24th APEC Finance Ministers' Meeting in Hoi An, Quang Nam, that contributed to the overall success of the APEC Summit in November 2017.

Prime Minister Nguyen Xuan Phuc and other delegates attended the APEC 2017 Ministerial Meeting in Danang City. Under the chairmanship of the Ministry of Finance of Vietnam, FMM 2017 has been a success.

The activities of the finance sector are closely related to the work of many ministries, sectors and localities. Especially in improving the efficiency of specialized testing; Implementing the National Single Window, ASEAN Single Window; anti-smuggling, trade fraud and counterfeiting. In your opinion, what issues should be set out to achieve better results in the above areas in the coming time?

Assigned by the Government as the Standing Office of the National Steering Committee for ASEAN Single Window, National Single Window and Trade Facilitation, the Ministry of Finance attaches great importance to addressing the problems of specialized inspection for import-export goods in order to help enterprises reduce costs and time of goods clearance. In 2017, with the fierce takeover of the Government, ministries and agencies together with the Ministry of Finance (the General Department of Customs) organized concentrated work sessions, thereby promoting ministrieswithpolicy mechanisms and implementation solutions. In fact, the national single window mechanism has officially connected with 11 ministries and branches; processed over 790 thousand administrative records fornearly 20 thousand enterprises.

In the work of reform and modernization, the Ministry of Finance is instructing the General Department of Customs to continue coordinating with ministries and branches to actively implement the master plan for the implementation of the National Single Window mechanism, the ASEAN single window period 2016-2020.

On the issue of anti-smuggling, trade frauds and counterfeit goods, it can be affirmed that, since the National Steering Committee 389 was established, this work has been more favorable, contributing significantly to both awareness and action, contributing to production, business, security and social order. Under the guidance of the National Steering Committee 389, all forces have undertakenapositive and smooth coordination, from advising on the improvement of institutions and policy directions, to urging and inspecting ministriesanddeployment of local tasks. As a result, in 2017, the functional forces have detected and processed 225,824 cases of violation,with a budget collection estimated at 23,100 billion VND. In particular, the customs control force has struggled, discovered, arrested and handled 15,188 cases of violation of customs law; the value of infringing goods is estimated at 789 billion VND; State budget remittance is 334.8 billion VND.

Nevertheless, the efforts of the Customs, Finance and Banking alone will not be enough. At this time, the activeness of ministries, branches and localities is needed more than ever. As the Standing Office of the National Steering Committee 389, the Ministry of Finance has determined that it will continue to work out plans and solutions to strengthen the fight against smuggling, trade frauds and counterfeiting, However, the Ministry of Finance and the General Department of Customs can not replace other functional forces. Ministries, branches and localities should take the initiative in implementing their assigned tasks so that together with the Ministry of Finance and the General Department of Customs, violations can be prevented and trade facilitation will be promoted to foster general development of the economy.

2018 is the hinge year for the implementation of the Socio-economic Development Plan 2016-2020and the Financial Plan for 2016-2020. In which direction does the Finance Sector have to fulfill the task, sir?

Continuing to perfect the institution; Promote reform of administrative procedures, especially in the field of taxation and customs; Improving the business environment and improving national competitiveness is still the priority of the finance sector this year.Also, withthe proactive measures to complete the state budget revenues; to manage state budget expenditures closely, economically and in compliance with regulations and combat wastefulness; improving the efficiency of using state budget; public debt control within acceptable limits; accelerating equitization, divesting state owned enterprises into reality, etc.

In particular, in 2018, the whole sector should continue to tighten administrative discipline.This is to be achieved by directing, inspecting and supervisingthe implementation of administrative discipline and discipline of the branch; internal inspection in the whole branch to evaluate the exercise of powers and responsibilities in performing public duties, andraisingpersonal responsibility towards the head of the unit. All levels must raise their responsibilities, be exemplary in thrift practice and waste combat; resolutely resist corruptionandthe negative affects of the image of financial staff in the eyes of the people andbusinesses.

Despite the difficult economic context, the task ofthe Finance sector in 2018 is very heavy, but I believe that, with the tradition of solidarity and unanimityofefforts to overcome difficulties and challenges, the Finance sector will be determined to successfully implement financial tasks.

The new year has new challenges to overcome. Could you share some of your directions with the customs forces in deploying tasks in 2018?

Together with tax authorities, modernization and information technology application of Vietnam’s Customs has always been considered as a bright spotforone of the main factors helping the finance sector to keep strongly rankedat the top of the central ministries and sectors during the past 5 years.

In 2017, the General Department of Customs has accelerated the reform of administrative procedures, shortened the time of customs clearance of import and export goods, creating favorable conditions for enterprises; The reform of customs modernization has made remarkable progress, especially solutions to improve management efficiency.

Promoting the results achieved, in 2018, the General Department of Customs should continue to reform, simplify administrative procedures, apply information technology in the field of customs in the direction of modernisation, to improve the business environment, improve national competitiveness. An important task is the drastic implementation of solutions, striving to fulfill the tasks assigned to the state budget in 2018; Continue to apply international standards, modern customs management procedures to maximize the benefits to the business community, but still ensure strict supervision and management in accordance with the law.

In addition, customs agencies must strengthen the control of smuggling and trade frauds, risk management, post-clearance inspection, inspection and examination, contributing to the increase of state budget revenues. Particularly, to focus on building a professional and modern customs force, meeting the requirements of modernization of customs; Strict discipline in performing public duties.

Thank you Sir!