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Dr. Vu Dinh Anh

From the first draft (on March 10) to the present date, the Ministry of Finance has expanded the scale and entity of the support package for those affected by the Covid-19 pandemic. The scale increased from VND 30 trillion to VND 80 trillion and finally to more than VND 180 trillion. The supported entity increased from three to five groups with the number of supported enterprises to 98%. How do you assess this move of the management agency amid the Covid-19 pandemic, causing difficulties for State budget revenue?

Initially, we did not estimate the time, scale and evolution of the Covid-19 pandemic, especially the pandemic’s effects on production and business activities, so the adjustment of the scale and entity of the fiscal support package was necessary.

This aims to support people and businesses to have better conditions to overcome difficulties and the disease in the near future.

The continuous adjustment of supported scale and entity is based on practical assessments of the situation and impact of the disease on the economy in each period, especially for the business sector by the draft authority.

With 98% of the hundreds of thousands of Vietnamese enterprises enjoying the support package, almost all businesses will enjoy this positive support from the State. This is a good sign when the impact of the disease is quite comprehensive and negative.

Before its promulgation, the drafting authority added credit institutions and real estate businesses to the list of beneficiaries. In your opinion, is this appropriate?

In the economy, parts of the economy interact with each other. The difficulty of one region will also become the difficulty of others.

Many industries indirectly affected may also have opportunities to develop if we reduce the burden and financial pressure on them, positively impacting directly affected entities.

One point I appreciate in this support package is that the State not only supports industries that have difficulties in consumption, business production, import and export but also aims to support the development and balance of the domestic market and help the business production sector redirect the business and maintain and restructure enterprises.

The scope of the supported entity has an overarching impact and has solved the relationship between different parts of the economy.

To deploy this support package effectively, what should be noted to avoid abuse of the policy?

We have had certain experiences in implementing fiscal support packages as well as in finance, credit and money. Especially, the experience of more than 10 years ago ago when we faced the global economic crisis in 2008-2009.

Firstly, the most important thing is to support the right entity. The beneficiary in this period is almost the majority. However, it is still important to identify the right entity to avoid abuse of the policy both from the management agency as well as the beneficiaries.

Secondly, it is necessary to identify the right problem to support the right entity. For example, if the entities have no need in terms of loans to expand or maintain production, loans will not be useful. Or if the subjects have no demand on land rent, they will not pay attention in extending land rent payment deadlines.

Thirdly, it is necessary to prevent the abuse and profiteering when enjoying support packages. The management agencies need to pay attention to this issue and even provide sanctions to minimise it.

Fourthly, the feasibility of the measures and conditions we provide when implementing this support package is important.

Finally, learning from previous experiences, this support should be based on the principle of publicity, transparency and equality.

The revenue will decrease during the extension period, how does this affect the management, especially with the budget expenditures?

The word "stress" must be used to describe the State revenue in 2020 when the budget revenues are greatly affected by the pandemic, domestic and foreign factors, imports and exports and oil prices. Meanwhile, budget expenditures have increased sharply, including extraordinary expenditures directly related to disease prevention and indirect expenditures as a large-scale support package, for example, the support package of VND 180 trillion is mentioned.

However, the support package mainly focuses on measures to extend revenues and remittances to the budget. Therefore, difficulties in administration are a temporary problem and will not affect the budget balance of the whole 2020.

However, we must also anticipate direct impacts on the State budget in 2020. The Ministry of Finance should provide plans to perform the three tasks of revenue- expenditure- support of the State budget while ensuring stability, sustainability, operation to be consistent with the evolution of the disease situation.