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Minister of Finance Ho Duc Phoc.

Phoc reported to the National Assembly on November 2 that the macroeconomic situation was stable, while inflation, public debts and budget overexpenditures were within the safety line.

Regarding fiscal policy, the government is pursuing an expansionary fiscal policy, which means that despite fiscal deficit and tax cuts, budget expenditures keep increasing. 

The Ministry of Finance (MOF) has proposed reductions of many kinds of tax and land rents to the government and National Assembly over the last three years, worth VND132.4 trillion in 2021 and VND233 trillion in 2022, but the figure is estimated at VND200 trillion this year.

While cutting taxes and fees, the government still has to ensure fiscal balance and pump VND347 trillion into the economy to support economic recovery.

Talking about the 2023 budget estimates, Phoc said as of October 30, 85 percent of the state budget collection plan had been implemented with revenue of VND1.36 quadrillion.

“Some National Assembly deputies thought that the collections from land increased, but in fact, only VND86.48 trillion has been collected from land (57.8 percent of the plan). The revenue from crude oil is also small, just VND46 trillion, or 2.6 percent of the total budget collections,” Phoc explained.

“So, the major source of revenue of the state budget was production and business, especially domestic collections,” he added.

The Minister said to date disbursement for public investment has been going slowly (57 percent so far).

“Why is the disbursed capital going slowly though the national economy is thirsty for capital?” he said. “Is this attributed to the unreasonable provisions of the Law on Public Investment? If we don’t amend the law, we will still have to continue to discuss the disbursement."

The disbursement of a VND14 trillion package used to build healthcare units in wards and communes has not been implemented. The same is occurring with the Long Thanh Airport project.

Phoc said it is necessary to amend the Law on Public Investment to diversify capital sources. It is also necessary to amend the Budget Law.

Replying to the proposal on applying the 2 percent VAT cut to all business fields, Phoc said this will burden the state budget. He also called for cutting expenses on investments and practicing thrift to ensure investment efficiency.

Luong Bang