Minister Ho Duc Phoc explained why the budget income rose so much

DNHN - On the morning of May 25, the National Assembly discussed the group the socio-economic situation, the budget for 2021 and the first months of 2022, the practice of thrift, combating waste, and the implementation of Resolution 42.

Finance Minister Ho Duc Phoc stated at the group meeting that the scenario in 2021 and the early months of 2022 will be fraught with problems and difficulties, owing in part to the impact of the Covid-19 outbreak. When the pandemic broke out in 2021, manufacturing and economic activity stalled, and fiscal policy became extremely tough. 

Before asking a budget source to purchase 150 million doses of vaccine, the government stated to the National Assembly that it would transfer some savings and backup sources and establish a Covid-19 Vaccine Fund to mobilize corporate and public support.

We have already injected up to 225 million doses of vaccine, making us one of the six countries with the quickest immunization coverage and the greatest coverage rate. This is a huge accomplishment that demonstrates the government's commitment to epidemic prevention.

While many nations across the world are experiencing negative growth, we are still growing by 2.91 per cent because of the fourth quarter of 2021 comeback. The core economic indices remained stable towards the end of the year, thanks to the focus on economic development, company development, and infrastructure building.

The budget deficit is just 3.41 per cent of GDP, public debt is only 43% of GDP, government debt is only 39% of GDP, and foreign debt is only 38% of GDP... These achievements also demonstrate significant efforts in leadership and government socioeconomic development management.

The Minister further stated that the government has prioritized numerous challenging and hard issues. Finishing the Cat Linh - Ha Dong project, resolving the price compensation method for Nghi Son Oil Refinery, or completing the strategy to manage the three banks with 0 dongs are just a few examples.

A lot of projects have been turned on and put into operation to handle 12 losses of projects. Furthermore, the government has prioritized investments in roads and airports, such as Long Thanh airport, Dien Bien airport, North-South expressway projects in the East... infrastructure, and the creation of runways for economic development.

Minister Ho Duc Phoc stated that with the aforementioned primary aspects, we have accomplished numerous great achievements and outcomes in a year of both battling the pandemic and expanding the economy.

In particular, there are policies to support businesses, such as tax deferral up to 129 trillion VND, exemption and reduction of 37 types of taxes and fees such as aviation fuel tax, registration tax, and so on, all of which contribute to maintaining and creating development momentum for socio-economic activities.

Aside from the recent results, the Minister of Finance emphasized some socio-economic issues, the first of which is the fear of inflation. Inflation is currently growing in several major countries as a result of rising commodity prices, the turmoil in Ukraine, China's Zero Covid-19 policy, and the fact that we are still exporting.

The Minister explained: "Domestically, as input costs rise, we face the risk of inflation. In addition, rising bank interest rates are exerting pressure on companies, hurting the entire economy. Enterprises borrow at high-interest rates, access to credit rates is difficult, and manufacturing costs are high, generating problems for firms and the economy as a whole. Some commercial banks are also experiencing challenges, such as substantial bad debts... All of these things will have an impact on jobs and budget income".

In the backdrop of the country has just suffered a pandemic, Minister Ho Duc Phuc underlined that the primary challenge at this time is how to improve the capacity of the economy and, in doing so, promote the vitality of firms. 

To do so at all levels, the industry must work on reducing obstacles in administrative procedures, capital regulations, land access, and so on to establish favourable business circumstances. At the same time, emphasize highway promotion since "where the road goes, hundreds of jobs will grow there," as well as fixing raw material issues and attracting investment. As a result, the government has recently concentrated on pushing the development of various highways that travel through many areas, utilizing state resources to boost societal and economic investment.

Concerning the financial situation, several delegates expressed worry that the budget revenue in 2021 surpassed the projection, with the additional money primarily coming from land and crude oil.

In the backdrop of the epidemic outbreak, Minister Ho Duc Phoc stated that the budget income in 2021 will be VND 1,568 trillion, 16.4 per cent more than the estimate and 3.8 per cent higher than the actual amount in 2020. Due to the increase in crude oil price, the land usage fee only surpassed 74.1 trillion dong, while crude oil only exceeded 21.4 trillion dong.

The expected share of the revenue from land usage is 8.3 per cent of overall revenue, with implementation accounting for 11.8 per cent. Crude oil income is anticipated to account for 1.7 per cent of overall revenue, with a realized 2.9 per cent. As a result, the economy is still actively expanding, and not just from money from land and crude oil.

Concerning the basis for exceeding the high projection although growth was modest, the Minister said that with 2.58 per cent economic growth, budget revenue exceeded last year by 3.8 per cent. While lowering corporate taxes, the management agency has raised budget income in previously untapped sectors, such as revenue from digital platforms and real estate...

Additionally, promotion Implement e-invoices aggressively; the aim is to reach 7 billion invoices by July 1, 2022, which means that all enterprises must utilize e-invoices. When employing e-invoices, the resulting transactions are displayed on the invoice, enhancing VAT income.

The Minister reported on the situation in the first four months of 2022, saying that 44.6 per cent of the estimate had been collected, up 15.4 per cent from 2021. By May 22, it had collected VND 758,000 billion, exceeding the expected 54 per cent and above the 16.42 per cent during the same period the previous year.

This demonstrates that the economy's productive potential is recovering and developing. The most essential thing at this point is to focus on assisting firms in developing and recruiting investment, particularly by utilizing public investment as bait.

PV