H1 State budget revenue in HCM City plummets hinh anh 1The State budget revenue in HCM City declined in the first half of 2020 (Photo: VNA)

HCM City (VNA) Ho Chi Minh City witnessed a sharp fall in the State budget revenue but a surge in spending during the first half of 2020 due to COVID-19 impact, according to the municipal Statistics Office.

During the six months, about 163.173 trillion VND (7 billion USD) was collected for the State budget in the city, the country’s biggest economic hub, equivalent to 40.2 percent of this year’s target and down 14.4 percent year on year.

Meanwhile, budget spending was estimated at 29,672 trillion VND, up 22.2 percent.

Director of the Statistics Office Huynh Van Hung said this is the first time the State budget revenue of the city plummeted while spending soared in the first half of a year.

He attributed this phenomenon to the fact that a majority of local businesses and economic activities were affected by COVID-19 while many policies like tax reduction and tax payment deadline extension have been carried out to assist enterprises.

Besides, foreign tourist arrivals, new businesses and investment in HCM City fell sharply, and the number of firms suspending operations increased by 40.6 percent year on year.

According to the city’s Customs Department, the 10 import commodities contributing most to the budget, including completely-built automobiles, motorbikes, steel and petrol, also experienced sharp declines in their turnover, by 15-50 percent from a year earlier.

Meanwhile, items with increased export turnover like computers, electronic devices, agro-aquatic products, pharmaceutical and chemicals are entitled to low tariffs under free trade agreements, making them unable to compensate for the decline in import tariff revenue.

To achieve this year’s budget revenue target, the HCM City People’s Committee is reportedly taking actions to support businesses, promote economic growth, and step up the divestment of State capital from State-owned enterprises./.