The Ministry of Finance will focus on improving the business climate and creating favourable conditions for businesses to accelerate growth, which is important to ensure State budget revenue amid the COVID-19 pandemic.
|Thuan Duc Packaging Joint Stock Company in Hung Yen Province. The Ministry of Finance would focus on improving the business climate and creating favourable conditions for businesses to accelerate growth which was important to ensure State budget revenue. – VNA/VNS Photo Pham Kien|
Latest updates by the Ministry of Finance showed that the State budget revenue totalled VND391 trillion (US$16.85 billion) in the first quarter of this year, representing a rise of 1.8 per cent over the same period last year.
The revenue was equivalent to 25.9 per cent of the plan for the full year.
Domestic collection was worth VND324 trillion in the quarter, or 25.7 per cent of the plan and up 3.6 per cent over the same period last year.
Revenue from crude oil rose 7.3 per cent to reach nearly VND14.6 trillion, or 41.4 per cent of the plan for the full year despite the pluging oil prices in the global market, even to $25-27 per barrel.
The ministry said that thanks to the lag in payment, Vietnam’s oil prices averaged $65 per barrel, $5 higher than the price used to plan budget revenue this year.
However, due to the impacts of the COVID-19 pandemic, State budget revenue from import-export activities dropped 8.8 per cent against the same period last year to VND77 trillion, or 22.8 per cent of the 2020 plan.
Experts predicted that the pressure of the COVID-19 pandemic on budget revenue would continue in the remaining quarters of this year.
Nguyen Thi Cuc, chairwoman of the Vietnam Tax Consultants’ Association, said that it was important to have policies to encourage businesses to overcome the difficult time.
The finance ministry said that COVID-19 weighed on budget revenue from March as many sectors were suffering, including aviation, tourism, hospitality, restaurant and cartering services.
The ministry would evaluate the impacts of COVID-19 and crude oil prices to develop solutions to balance budget revenue and spending, Dung said.
Dung added that the ministry would focus on improving the business climate and creating favourable conditions for businesses to accelerate growth, the major source for stable State revenue.
The ministry would also raise policies to encourage production and business, especially for small and micro-sized enterprises.
The State budget expenditure in the first three months of this year was estimated at VND343 trillion, up 8.7 per cent against the same period last year. Of the figure, VND61.6 trillion was for development investment, up 31.8 per cent, VND33.8 trillion was for paying debts and interest, up 9.9 per cent and VND246.6 trillion was of normal expenditure, up four per cent.
Minister of Finance Dinh Tien Dung proposed cuts in normal expenditure to help save an estimated VND700 billion by central-level agencies which would be used to fight the COVID-19 pandemic.
Regarding public investment, disbursement was estimated to total VND39.8 trillion as of March 15, or 8.86 per cent of the 2020 plan.
The Vietnamese Government has identified public investment as the engine for growth to offset the growth gap caused by the pandemic. Accordingly, focus would be placed on speeding up disbursement of public investment in the remaining months of this year.
The General Statistics Office estimated that every increase of one per cent in public investment disbursement would push up GDP by 0.06 percentage points.
Recently, the Government gave a five-month extension of deadlines for tax and land use fee payments to support businesses suffering from the COVID-19 pandemic, which was estimated to total VND180 trillion and benefited 98 per cent of firms in the country. VNS
Boosting the disbursement of all planned public investment would help increase this year’s gross domestic product (GDP) by 0.42 percentage points, according to the General Statistics Office (GSO).
The Ministry of Finance plans to hasten tax and customs administrative reforms this year to improve the business climate.