Minister Dinh Tien Dung: budget disciplines and rules in many units have not been seriously implemented

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Minister of Finance Dinh Tien Dung. Photo: quochoi.vn

Assessing the state budget, Minister Dinh Tien Dung said, ‘the socio-economic situation continues to have positive changes, but still faces many challenges from external impacts and internal weaknesses. In particular, protectionism, tight monetary policy, and the race to adjust tax incentives by economies have affected the international investment inflows. The economic growth sees a slowdown, the restructuring of state-owned enterprises, of public investment and of public non-business units is still slow’.

Therefore, the Minister of Finance realized that the above situation has affected the state budget revenue and expenditure. Specifically, the state budget revenue in the first six months accounted for 49.4% of the estimate, up 14% over the same period of 2017, of which domestic revenue was 46.6% of the estimate, up 13% over the same period, higher economic growth and CPI growth.

In addition, the revenue from the economic sector rises, but is still low, in which the revenue from corporate income tax by state-owned commercial banks accounted for only 39% of the estimate; from telecommunications businesses 34.3%, from cigarette producers 44.9%, from beer producers 44%, from coal companies 29.7% and from special consumption tax by foreign-invested automobile manufacturing and assembling companies 36.8%.

Notably, the direct revenue from production and business activities is still low, local budget revenue is 46.2%, higher than the same period last year (41%), accounting for 44.5% of the estimate. Of which, 46/63 localities reached their progress estimate, 38 localities were behind progress, and some reached a revenue lower than the estimate.

Therefore, Minister Dinh Tien Dung requested that in the last 6 months of the year, the leaders of ministries, sectors, localities and central agencies continue to direct the implementation of solutions to strengthen the collection, collaboration, inspection and examination, for ensuring accurate collection.

Regarding state budget expenditure, the leader of the Ministry of Finance said that spending has been strictly controlled to balance budgets at all levels. The spending budget is mainly for localities to overcome the consequences of natural disasters, river bank erosion and reinforcement of dykes.

In disbursement, the Minister said ‘that the disbursement of capital was higher than the same period, but it was still slower than the requirement, reaching only 32.5% of the estimate by many ministries, and even less than 25% of the estimate in many ministries, sectors and localities’. Accordingly, the Minister suggested that the ministries, central and local agencies attach a great importance to directing the removal of difficulties in capital construction in order to speed up the disbursement according to the estimate.

Regarding the administrative reform, the Ministry of Finance has approved the proposal to cut 92 business conditions, simplify 98 conditions, reaching 51.3% in volume. The ministry has also proposed to revise six laws and 16 decrees and has collaborated with ministries to amend and abolish 80/87 documents on specialized inspection and management under the guidance by the Government.

Moreover, by 2018, the Ministry of Finance has implemented online administrative procedures, online tax declaration and e-customs with 11 ministries and sectors connected. However, only 53/284 procedures have been implemented via the National Single Window and ASEAN Single Window.

Reporting on equitization and state capital divestment, Minister Dinh Tien Dung said that, ‘in the first 6 months of the year, 8 enterprises have been equitized, while the plan is to equitize 85 enterprises in 2018. Thus, the equitisation and divestment is still slow and unlikely to reach the plan set in 2018’. Therefore, the Minister required the Prime Minister to direct the ministries, sectors and localities to urgently make decisions and plans to restructure State enterprises in accordance with the Government's guidance, thus speeding up the equitization.

Regarding the renovation of the public service sector, the Minister of Finance assessed that the renovation is still low . The ministries have submitted 2/8 provisions on autonomy mechanism in the sectors of health, science and technology. Regarding the public service costs, only the health sector has issued the price brackets for medical examination and treatment services, and other services have not yet implemented.

"If remaining with this progress, it is difficult to achieve the target in accordance with Resolution 19 and to secure the goal of wage reform. Therefore, the Government is recommending to direct the ministries to promptly implement and re-structure their public non-business units," said Minister Dinh Tien Dung.

In addition, the Minister also recommended the management of market prices. Minister Dinh Tien Dung affirmed that the electricity price has not been raised and petrol and oil prices are still regulated by the market

Moreover, regarding the public asset management, the Minister of Finance said that ‘the 13 decrees have been submitted to the Government’. Now, the Government has issued 11 decrees and the Minister suggested that the Government should soon promulgate the remaining decrees to quickly implement.

In particular, regarding the strengthening of budget disciplines and rules, Mr. Dung said that, “In recent times, many units have not implemented seriously, including central agencies and enterprises that are not serious, including central agencies and businesses. Tax evasion and transfer pricing also occurs in many units. This is partly due to the self-declaration mechanism, self-payment, self-responsibility for tax payment. On the other hand, the expenditures outside the regulation, beyond the norm, capital disbursement being higher than the plan and big debts of capital construction, loss and waste, still occur. Therefore, the agencies and units need to strengthen their inspections," the Minister said.

Another recommendation by the Finance commander is the streamlining of the apparatus in collaboration with human streamlining. The Minister of Finance requested the ministries, sectors and agencies to restructure in a streamlined and effective manner. So far, the Ministry of Finance has cut and dissolved a number of transaction offices of the State Treasury, streamlined the tax and customs branches and reserve department ... Therefore, Minister Dinh Tien Dung suggested the local support and ensure the roadmap.

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Facing the above situation, the leader of the Ministry of Finance requested the ministries, sectors and localities to continue coordination in accordance with the State budget plan in 2018, and to prepare the state budget estimate for 2019, and draft budget plan for 2019. The Ministry of Finance will take the initiative in calculating the budget restructure in case where ministries and localities delay the implementation.

Regarding the proposals in the financial sector, Minister of Finance Dinh Tien Dung said that ‘he would receive, amend and send written answers to the localities according to his competence’.