Hanoi (VNA) – As Vietnam targets economic growth of at least 10% in 2026, fiscal policy is expected to shift from a traditional budget-balancing role to a more proactive driver of growth, with spending efficiency emerging as the decisive factor.
State budget revenue in the first four months of 2026 was estimated at 1.11 quadrillion VND (42.1 billion USD), equal to 44% of the projection, up 15.2% year-on-year, indicating still-positive fiscal space. However, economists say the key issue is no longer how much the State collects, but how effectively it spends to generate spillover effects, boost investment, expand production capacity, and sustain sustainable economic growth momentum.
Vietnam’s GDP grew 7.83% in the first quarter, a solid result amid global uncertainties, but still below the government’s target scenario. To achieve full-year growth of 10%, the remaining quarters will need to accelerate significantly, with growth projected at over 10.5% in the second quarter and rising further in the second half of the year.
According to Deputy Director of the Ministry of Finance's state budget department Dinh Xuan Ha, fiscal policy in 2026 must serve a dual purpose - supporting growth while expanding fiscal space. Key priorities include tackling revenue losses, transfer pricing, and tax evasion, while diversifying funding sources for development investment as spending demand rises.
Public investment is expected to remain a key growth driver, acting as “seed capital” to unlock long-term productive capacity. Major projects such as Long Thanh International Airport, high-speed railways, ring roads, expressways, and the Olympic sports urban area are set to receive substantial funding, with strong anticipated spillover effects.
Studies suggest that each unit of public investment could generate 1.5–2 units of indirect added value by reducing logistics costs, improving connectivity, and expanding business space.
However, uneven disbursement and delays remain a bottleneck, limiting the effectiveness of capital flows. This underscores the need for continued administrative reform and stricter implementation discipline.
On the revenue side, policy is shifting toward broadening the tax base rather than raising rates, while closing loopholes that lead to revenue losses. E-commerce, estimated at 31 billion USD, has emerged as a key area requiring tighter management due to its fragmented and hard-to-track transactions.
The informal economy, accounting for around 30% of GDP, also presents significant untapped potential if gradually formalised. Despite having about 5 million household businesses nationwide, the rate of conversion into formal enterprises remains limited, constraining tax base expansion.
At the same time, tax authorities are stepping up efforts to control transfer pricing in the FDI sector and refining tax incentives to prioritise high value-added industries such as semiconductors, green economy, and high technology.
Support measures, including VAT reductions, land rent relief, and higher revenue thresholds for household businesses, will continue to be implemented to stimulate demand and support enterprises, while tax administration is being modernised through digital transformation.
Experts emphasise that fiscal policy should move beyond a supportive role to actively lead growth. Continued and selectively expanded tax and fee reductions could directly ease cost pressures on businesses, enabling them to sustain operations and expand investment.
In the context of rising investment needs, public debt and budget deficits are also being managed more flexibly. A reasonable level of deficit is considered acceptable if investment efficiency is high enough to generate growth and offset debt increases.
Alongside long-term government bond issuance, Vietnam is expanding access to international concessional finance for green transition and large-scale infrastructure projects, while exploring new avenues such as carbon credit markets and digital asset exchanges to enhance long-term fiscal capacity.
Economists note that such growth is not a short-term goal but the result of sustained accumulation over time, requiring each unit of public spending to function as an investment that creates added value for the economy./.
