Remove "bottlenecks" to promote the balance of state budget restructuring

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Many import products have a 0% tax rate when FTAs take effect. In the photo: Cao Customs officer By inspection

Central budget revenues are declining

The report sent to the National Assembly on the evaluation of the State Budget in 2018 and the first months of 2019 of the Government has produced an encouraging overall picture. In 2018, the total state budget revenue increased by 8% compared to the estimate, higher than the GDP growth rate. The average proportion of budget mobilization in the 3 years 2016 - 2018 reached 24.5% of GDP, of which the proportion of revenue from taxes and fees was 21.2% of GDP. In the first months of 2019, the state budget surplus continued.

The important point to mention is the structure of positive shifting budgets, meeting the requirements of the Politburo Resolution No. 07-NQ / TU on guidelines and solutions to restructure the state budget and managing public debt to ensure National financial safety, sustainability and National Assembly Resolution 25/2016 / QH14 on the 5-year financial plan for the period 2016-2020. Domestic revenue in the period of 2011 - 2015, was 68%, but in the period of 2016-2018 it was up to 80.3%, the proportion of revenue from crude oil is only about 4%. However, the proportion of revenue from the central budget is declining.

One of the reasons is that according to the budget decentralization, the central budget has only two main sources of revenue, from import and export and oil revenues, recently Vietnam has begun deep integration and tariff rates are commonly 0%. It is a difficult situation for the current financial sector to overcome. Collection policy continues to improve in the direction of reducing tax obligations, small and medium enterprises are entitled to preferential treatment and reduction of import and export duties according to integration requirements. Simultaneously financial management in general, especially tax and customs, is modernized, promoting reforms to better serve people and businesses.

Assessing state budget restructuring, Deputy Minister of Finance Do Hoang Anh Tuan said: After 3 years of restructuring, Vietnam has achieved initial results, creating a premise to continue future implementation. Vietnam has increased the mobilization rate into the budget from 21% - 22% of GDP to an average of nearly 24% of GDP. The structure of important transitional revenues, revenues from production and business, from tax fees has reached more than 80% of the total budget revenue. In the state budget expenditure structure, Vietnam has steadily reduced overspending from over 5% of GDP in 2015 to 2.74% of GDP in 2017, striving to reach 3% of GDP by 2020. As a result, public debt has decreased from 63.8% of GDP to 58.4% of GDP and the trend is falling steadily. In the total restructured public debt, the debt term is longer, averaging over 12 years, the interest rate is only 4.2% - 4.5% per year and this is a reasonable ratio of public debt restructuring.

Increasing revenue, spending is difficult to reduce

The above mentioned positives are undeniable, the state budget restructuring is still very good, but the challenges are not reduced. There are issues such as aging population, climate change, deep integration and fiscal balance are difficult to improve the revenue increase. All of these factors affect budget revenue as well as economic growth. In the context of it being difficult to reduce spending, it is also difficult to adjust the increase in revenue, which will affect the deficit and public debt.

These challenges pose the need to refine the tax policy system, solve tax-related issues with the view of promoting small and medium-sized enterprises to mobilize budget and expand the tax base on the basis of implementing the principles of anti-transfer pricing and tax fraud prevention. In addition, the units also need to focus on improving the efficiency of management, using transparent budgets, highlighting the role of medium-term financial planning, and managing the budget according to output; continue to restructure public debt as well as strictly manage the country's foreign debt and Government debt; it needs to enhance the role of the State Treasury in managing state budget revenue and public debt; promote non-cash payments.

Mr. Vo Thanh Hung, Director of the State Department, Ministry of Finance said: In the future, financial policies must contribute to macroeconomic stability and improve competitiveness; promoting growth and solving social and environmental security issues; at the same time, creating a fiscal balance to handle risks, ensuring national security and safety. The Government will complete the collection policy towards transparency and efficiency, expand the collection base and adjust preferences; improving revenue management efficiency through modernization of management. Regarding state budget spending, it will increase accumulation for investment, reduce the proportion of recurrent expenditures; renewing public non-business units, reorganizing the state apparatus; expenditure management associated with output.

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The Director of the Department of State Budget said that it is necessary to control the expenditure scale within the capacity of the economy, in accordance with the level of development and integration of the country; to prioritize the handling of inadequacies in the management of public investment capital, overcome the slow distribution problems, disburse unfulfilled plans and prolong the source of transfer; promote the implementation of the goals of continuing innovation, reorganizing the organizational structure of the streamlined political system, operating effectively and innovating the organizational and management system. In addition to strengthening the socialization of the provision of public non-business services on the basis of perfecting the mechanisms and policies and creating a fair competition environment in providing public services among units and groups belonging to different economic sectors in accessing state budget funding for the development of public non-business services. These will be important bottlenecks that need to be "removed" in all fields so that the task of state budget restructuring continues to be successful.