Financial sector urged to raise 2021 budget collection

Prime Minister Nguyen Xuan Phuc urged the Ministry of Finance (MoF) to increase 2021 budget revenue by minimum 3% higher than the estimate.

Prime Minister Nguyen Xuan Phuc at the meeting. Photo: Quang Hieu.

The government leader made the statement at the meeting discussing Vietnam’s finance-budget results in 2020 on January 8.

Mr. Phuc requested the MoF in 2021 to reduce the ratio of tax arrears to total budget revenue to below 5% while fiscal deficit should be within 4% of the GDP.

He wanted the ministry to continue its reform process and set up a development strategy for the next five to ten years, which is essential during a strong volatile world with high risk of financial crisis.

“The successful realization of the dual target in both containing the pandemic and boosting economic recovery helps Vietnam become a new safe haven for multinationals,” Mr. Phuc said.

“Vietnam has been a world’s spotlight in the Covid-19 fight,” stated Mr. Phuc, referring to the naming of Vietnam by London-based independent brand valuation and strategy consultancy Brand Finance as the fastest-growing nation brand that defied global trend with its brand value skyrocketing 29% year-on-year to US$319 billion.

The PM attributed Vietnam’s success in economic recovery to timely fiscal support for people and businesses affected by the pandemic, including waiving and freezing of taxes and fees worth VND124 trillion (US$5.37 billion).

Meanwhile, the benchmark Vn-Index is on course to 1,200 points and could soon surpass the all-time high of 1,204 in April 2018, for which “a big part is thanks to the Ministry of Finance’s decision to cut and waive near 30 securities fees, “ stated Mr. Phuc.

At the close today, the Vn-Index ended at 1,167.69, up 0.97% or 11.20 points against the previous day.

“With a growth rate of 21% against late 2019, Vietnam’s stock market is one of the world’s best performing in 2020, ” noted Mr. Phuc.

Vietnam’s State budget revenue reached 98% of the estimate in 2020 and was VND184 trillion (US$8 billion) higher than the initial figure reported to the National Assembly, while fiscal deficit and public debts were estimated at 4% and 55.8% of the GDP, respectively, within the limit set by the National Assembly.

For the 2016-20 period, total budget revenue reached VND6,890 trillion (US$297.61 billion), exceeding the 5-year plan.

“This shows Vietnam’s efficient management of finance,” added Mr. Phuc.

Vietnam targets a fiscal deficit of VND343.67 trillion (US$14.82 billion) for the year, equivalent to 4% of GDP, down from an estimated deficit of 4.99. – 5.59% in 2020 (equivalent to VND319.5 – 328 trillion (US$13.78 – 14.15 billion).