Despite a state coffer surplus for most of the year, Vietnam is expected to see a deficit in the budget for the whole of 2023, with some fiscal initiatives on assisting businesses applied.

The revenue from personal income tax (PIT) witnessed a minus growth rate in the first three months of the year for the first time in the last 10 years. However, PIT collections still account for a large proportion of the total state budget revenue.

Minister of Finance Ho Duc Phoc says the 2 percent VAT cut will not be applied to some business fields, including securities, banking and finance, explaining that if it was applied to all fields, this would put pressure on the state budget.

For 2023, the city has been assigned a budget revenue target of nearly VNĐ470 trillion.

The Government has proposed allocating an additional VND2.5 trillion in the 2023 state budget for regular spending. The Standing Committee of the National Assembly discussed this proposal during its 27th session on October 17.

The State budget overspending in 2023 is expected to be equivalent to 4 percent in 2023, lower than the previous forecast of 4.42 percent, according to the Ministry of Finance (MoF).

The Finance Ministry reported to the National Assembly that the state budget expense in 2022 was VND342.6 trillion, making up 3.6 percent of the national GDP. This is a drop of VND61.7 trillion compared to estimation of 4.3 percent of GDP.

Contrary to projection of a deficit, Vietnam’s state budget landscape in 2022 has witnessed a major surplus, with enterprises in general gradually weathering difficulties to ensure their performance.

Total State budget collection was estimated at over 1,803 trillion VND (76.6 billion USD) in 2022, equivalent to 127.8% of the estimate, up 15% year on year, reported the Ministry of Finance (MoF) on January 3.

Vietnam’s state budget performance is expected to see a deficit of billions of US dollars this year, with such a landscape fixed for next year – with warnings sounded about punishing violations in budget management and usage.

From now to 2025, about 400 cadres will be sent to training courses abroad each year. From 2026 to 2030, the figure will be 500.

Vietnam ranks 68th out of 120 countries globally in the Open Budget Survey (OBS) 2021 of the International Budget Partnership (IBP), up 9 notches compared to 2019 and a leap of 23 notches against 2017.

The Vietnamese Government will implement solutions to ensure the efficient management and use of the funds.

The State budget overspending in 2020 stood at over 216.4 trillion VND (9.3 million USD), equivalent to 3.44 percent of GDP, statistics showed.

Despite impairments in the economy and business revenues, Vietnam has decided to increase its budget deficit this year and next year in order to ensure state budget spending for the country.

The state budget revenue has increased sharply, even as people and businesses remain depressed due to the ongoing Covid-19 pandemic. 

Vietnam may not be able to increase its budget deficit next year in order to ensure state budget spending, with the economy still sabotaged and business revenues still dented.

State budget allocation should prioritise poor localities with a high number of migrant workers, said Dr Nguyen Duc Thanh, director of the Vietnam Centre for Economic and Strategic Studies (VESS) at a seminar.

Finance Minister Ho Duc Phoc has affirmed that the State budget is enough for expenditures planned by the National Assembly (NA) and the Prime Minister.