"Proactiveness and adaptability are distinctive characteristics of the Finance business," says Dr Le Duy Binh, Managing Director of Economica Vietnam

DNHN - Dr Le Duy Binh, Managing Director of Economica Vietnam, praised the banking sector's financial strategy for timely assisting enterprises in restoring production and business, so contributing to macroeconomic stability and inflation management.

According to Mr Binh, Vietnam's economy has seen ups and downs throughout the last three years of the epidemic, particularly shocks and unexpected repercussions. In that perspective, financial sector policy is one of the most essential foundations for assisting the economy in dealing with various issues, depending on the condition of the economy at the time.

The epidemic caused some difficulties in the first year, but the economy continued to grow. Fiscal policy was still supportive of enterprises at the time. However, by 2021, economies will face greater difficulties, and businesses will face greater difficulties; therefore, fiscal policy has been implemented flexibly in the form of support for businesses, support for the economy, and financial support for the process, so that businesses can develop in a very difficult context. Although the economy is showing signs of recovery by 2022, there will be further challenges with supply chain disruptions and significantly higher inflationary pressure...

Fiscal policy flexibility was once again altered to explicitly assist macroeconomic stability, contributing to inflation control. The measures used by the finance sector have also become more flexible to both ensure macroeconomic stability and the goals of economic recovery and growth, while also ensuring that concerns are addressed by the government, the business community, experts, and policymakers, such as the issue of inflation, consumer price index.

In recent years, the Finance industry's fiscal policy has been skilful, flexible, and appropriate to the situation and context of the economy based on both ensuring the target of support and ensuring financial security, macroeconomic stability, and the major economic balances for which the Finance sector is responsible. As a result, fiscal policy may be said to be extremely realistic.

In the past, a series of tax relaxation, exemption, and reduction policies to assist people and businesses have had an impact on people and businesses in particular, as well as on the recovery and socioeconomic development in general. In 2021, for example, the policy of relaxation, tax exemption and reduction, fees... provides excellent business support, which is the most significant advantage.

In addition to the exemption and decrease, the tax payment deferral and delay are a huge help for businesses in terms of liquidity. This is something that businesses value much, and the method used at the time was seen to be the quickest. Many firms lost money during the period owing to numerous issues in manufacturing, business, and market access. In this sense, the tax payment delay has aided corporate liquidity.

The measures, as well as the VAT reduction plan, will be continued in 2022. There were many concerns about the policy's ability to be implemented and its effectiveness at first, but reality has shown that when there is determination and the right policy, the implementation with mind for enterprises, because of the economy, and with great determination of the Finance sector, as well as many other related ministries and branches, that policy was implemented. After some initial challenges, this policy has been executed reasonably effectively up to this point, and it is a step that will benefit not only businesses but the economy as a whole in many ways.

"With this reduction, the Finance and State budget sectors sacrifice revenue while supporting and stimulating production enterprises at high speed. With the lower value-added cost of some industries, it also has another purpose of stimulating consumption and reducing inflationary pressure, which is very important for the economy," Mr Binh emphasized.

According to Mr Binh, the Ministry of Finance's responsibility is to balance and harmonize the implementation of these vital responsibilities. The most important guideline is first and foremost to stabilize the macro-economy, which is the basis and an important aim. From macroeconomic stability, we must establish key concepts to follow, such as legislative restrictions that must be obeyed and financial discipline in all circumstances.

In many circumstances, the policy will not fulfil all of the needs and goals of companies and people, but financial discipline will help stabilize the economy, and firms will be the objective of benefit support in the medium run. As a result, we must balance and assure the principles that the Finance sector must uphold, such as keeping the budget revenue-to-expenditure ratio and the budget deficit within allowed limits. Based on these ideas, the finance sector may balance the budget flexibly and proactively, design assistance programs for enterprises by the role of the state and market principles, and avoid undermining market principles.

Furthermore, assistance measures and procedures must also conform to the terms of the law, and cannot be excessively subsidized. The tax exemption and reduction must also ensure the concept so as not to develop a non-market mechanism such as the seeking mechanism. These guidelines will make the Ministry of Finance's operations more transparent.

Mr Binh also advised the Ministry of Finance on the establishment and execution of fiscal policies so that these policies become more and more successful, as the Ministry of Finance must remain flexible and proactive. The Finance industry has a unique set of keywords: proactive and adaptable.

The situation changes very quickly; for example, the challenge of 2202 differs from the challenge of 2021, and it is critical that public servants in the Finance sector, in general, keep a close eye on the actual situation, stay informed of the desires and needs of businesses and people, and have timely and appropriate policies. More importantly, financial sector policies will need to become more predictable.

Finance laws will have a far-reaching impact on a huge number of people as consumers and taxpayers, while also having a greater influence on enterprises than in other industries. As a result, first and foremost, the predictability of the Ministry of Finance's policies must be improved, as well as adequate operational scenarios for various situations.

At the same time, the proactiveness with which these projections are implemented has to be addressed. Furthermore, policy formation in all areas where the Finance sector is responsible must be more comprehensive.

Furthermore, the coordination in policy formulation of the Finance sector must continue to be placed in the general context of the entire economy, for example, fiscal policy should be placed in the context of monetary goods, and fiscal policy must harmoniously coordinate with monetary policy to maintain macroeconomic stability and bring benefits to the entire economy. Fiscal policy has divided a lot of fire in the past when compared to monetary policy, notably in 2022.

Hai Anh (t/h)