“The idea of excluding the revenue from oil and gas out of the state budget balance and spending the money only on social security is worth considering,” said Deputy General Director of the General Department of Taxation (GDT) Nguyen Dai Tri at a press conference about tax collection in the first quarter of 2016, held some days ago.
Nguyen Van Phung, director of the Tax Administration Department for Large Enterprises, said the revenue from natural resources must not be spent in full, and that only a part of the money can be spent to ensure social security, while the remaining must be left for the next generations.
Tri said the National Assembly and the government have told taxation bodies to collect VND809.5 trillion in taxes and other items for the state budget. This includes VND54.5 trillion from crude oil with the estimated export price of $60 per barrel, and the revenue from domestic sources at VND755 trillion.
Government officials say it’s the right time to seriously think about putting aside revenue from oil for descendants.
According to Tri, this is the second year Vietnam sees a big gap between the estimated oil price and the real price. In 2015, the state budget revenue was calculated based on the estimated oil price of $100 per barrel, while the real price was around $50 per barrel.
In 2016, MOF plans to collect tax on the estimated oil price of $60 per barrel. However, it could only tax the average price of $36 per barrel.
MOF has also drawn up other scenarios, including one with the oil price falling to $20 per barrel.
Prior to that, some institutions predicted that if the oil price hovers around $40 per barrel as predicted by IEA (the International Energy Agency), the state budget’s revenue would be lower by VND40 trillion if compared with the estimates.
The figure would be even higher if the crude oil price continues to stay at the current prices of $32-34 per barrel. And if the worst scenario occurs, i.e. the oil price falls to $20 per barrel, the loss of the state budget revenue may be up to VND85 trillion.
A question has been raised whether it would be better to place the oil revenue out of the state budget balance if the state agencies cannot predict the oil price. The revenue could be put aside, spent on infrastructure and social security and reserved for the next generations.