An oil-rig in the Bach Ho oil field of Vietsovpetro, a joint venture between PetroVietnam and Russia's Zarubezhneft.(Source :VNA)

Hanoi (VNA) – Minister of Finance Dinh Tien Dung said in an interview on VTV on January 10 that one of the key tasks that his ministry will fulfill this year is to balance the state budget.

Dung said it was projected that in 2016 the crude oil price would keep falling. The price might drop to under 35 USD per barrel. In addition, under Vietnam's international commitments, a cut of about 10 trillion VND (444 million USD) in the reduction of tariffs of trade would have serious effects in the 2016 Central State budget collection.

"As a result, the MOF has developed various scenarios on the crude oil price of 55, 50, 45, 40, 35 and 30 USD per barrel to calculate the 2016 State budget," Dung added.

"Right from the onset of 2015, the MOF focused efforts on the implementation of the five laws on taxation which came into effect during the year, including the Tax on Natural Resources, Tax on Environmental Protection and Tax on Special Consumption," said Dung.

Based on the five taxation laws, the MOF adjusted domestic revenue from tax collection while reducing the export and import taxes from crude oil, Dung added.

In 2015, the MOF also focused its efforts to improve administrative procedures, particularly in the areas of tax collection and customs procedures. By late 2015, the MOF was able to collect 40 trillion VND (1.8 billion USD) in tax debts from 2014.

Dung said in the context of the steep drop of the crude oil price internationally, the MOF had worked closely with other ministries, sectors and localities to monitor closely inputs while reducing public spending so that Vietnam could have more money to invest in business production, to speed up economic development and to increase state budget revenue.

"Thanks to our synchronous policies, by the end of 2015, our national budget collection surpassed 8 percent of the target set by the National Assembly. What's more important, the MOF didn't have to use the 10 trillion VND (444 million USD) earned from the equitisation of State-owned Enterprises to fill the gap in the Central State budget due to the sharp reduction of crude oil earning," Dung said.

Referring the complaints of many people about the MOF's slow adjustment of the petrol price when the international crude oil dropped 40 percent but the petrol price in Vietnam reduced only by 12 percent and diesel by 30 percent, Dung said, "The price of crude oil and the retail prices of petrol and diesel are the two concepts having close relationship with each other. But they are quite different in the price ratio. As the retail price of petrol/diesel depends on many factors, including processing, circulation, storage and tariffs," Dung added.

He said the expenditure cost of crude oil extraction accounted just 40 percent of the price while that of the retail price of petrol accounted for 50 percent.

However, he argued that the retail price of Vietnam's petrol/diesel was still cheaper than those of China, Laos or Cambodia.

Dung promised that in 2016, the price of petrol/diesel in Vietnam would continue to follow the market price as written in the Government Decree 83/2014.

"In its management, the MOF upholds the transparency in its management and accountability in line with what's written in the Government Decree," said Dung.

In 2016, Vietnam will adopt various policies to mobilise resources from inside and outside the country to help Vietnamese enterprises to integrate internationally.

To facilitate the development and sustainability of our market, in 2016, the MOF will issue various measures, including encouraging the flow of investment capital from foreign investors, particularly the Government's Decision to open "wider rooms" for them in the stock exchange. At the same time, Vietnam will simplify its administrative procedures to enable more foreign investors to operate in the Vietnamese market, particularly in buying shares from the equitised State-owned enterprises.-VNA