H1 State budget revenue lowest in seven years

Hanoi (VNA) - State budget revenue in the first half of 2020 was down 10.5 percent against a year earlier and equal to just 44.2 percent of the annual estimate; the lowest since 2013, Minister of Finance Dinh Tien Dung told a conference in Hanoi on July 7.

The gathering was held by the Ministry of Finance to review the State’s finance and budget position in the first six months of the year and to outline tasks for the remaining months. Prime Minister Nguyen Xuan Phuc was in attendance.

Thirty-four of Vietnam’s 63 cities and provinces reported first-half State budget revenues that exceeded 50 percent of the estimate, he said. If revenues from land use fees and the sale of lottery tickets were to be excluded, however, only 14 were able to achieve budget collections at over half of the estimate.

State budget collections were struck a heavy blow in the first half by COVID-19, which quickly sent the global economy into recession and severely damaged many of Vietnam’s major partners, Dung explained.

In the face of the pandemic, the ministry came up with a number of measures to remove difficulties facing local business and production and to ensure social welfare, he continued.

It proposed the government provide tax exemptions on imported medical materials and equipment for the COVID-19 response and on imports of materials for various pandemic-hit industries.

The ministry has also deferred payments of value-added tax (VAT), corporate income tax, personal income tax, and land use fees for affected companies and household businesses, raised the taxable personal income threshold, and cut environmental protection taxes on jet fuel by 30 percent to help affected people and companies weather the coronavirus crisis.

Dung went on to say that, as of the end of June, State spending accounted for 41.8 percent of the annual plan.

The State budget provided around 15.3 trillion VND (over 658 million USD) in funding for COVID-19 relief efforts, he said, including 4.1 trillion VND to curb the spread of the disease and 11.3 trillion VND on supporting disease-hit people and businesses.

More than 1.66 trillion VND was also earmarked from the reserve funding for tackling African swine fever nationwide and addressing the aftermath of natural disasters on production, he noted.

The ministry will continue giving priority to helping businesses recover from the pandemic and to attracting more investment for local economic development, he said.

He also urged other ministries and localities to accelerate the disbursement of public investment and increase budget collections and tighten spending to save funds for major tasks such as the COVID-19 and natural disaster response.

Addressing the conference, Prime Minister Nguyen Xuan Phuc instructed the financial sector to persist with the goal of ensuring budget collections, stabilising the macro economy and controlling inflation.

In the remaining months of the year, the sector should study and early submit to authorised authorities flexible and effective fiscal mechanism and policies to support economic recovery, along with specific proposals on fiscal stimulus packages, tax incentives and resource mobilisation, PM Phuc said.

In particular, the PM stressed the requirement on accelerating the disbursement of public investment capital.

He also urged the Finance Ministry to further streamline administrative procedures, especially in taxation and customs, and cut inspections./.