Hanoi’s special finance-budget mechanism to take effect from August 15

Vietnam’s National Assembly (NA) has issued a resolution enacting the implementation of a special finance-budget mechanism for Hanoi, scheduled to take effect from August 15 with five-year validity.

An aerial view of Hanoi. Photo: Pham Hung

Under the decision, the Hanoi People’s Council is now authorized to levy new fees and charges in the city, as well as adjust the existing fees and charges.

The move is aimed to adapt to Hanoi’s actual socio-economic conditions, the city’s 10-year development strategy in the 2021 – 2030 period and five-year financial plan in 2021 – 2025.

Moreover, 100% of the revenue from the new fees and charges will go to the city’s budget for future investment in socio-economic infrastructure, science and technological activities, education and healthcare, among others.

The new mechanism also allows Hanoi to retain 50% of the receipts from the sale of state-owned properties; 100% of proceeds from the divestment and privatization of state-owned enterprises.

Additionally, Hanoi would have more resources to address issues related to urban planning and technical infrastructure development.

On June 19, the NA approved the special finance-budget mechanism for Hanoi with an endorsement of 91.51% of its deputies present.

Chairman of the NA Finance-Budget Committee Nguyen Duc Hai said the decision would provide Hanoi’s leaders with sufficient flexibility and decision-making power.

Despite severe economic impacts of the Covid-19 pandemic, Hanoi’s gross regional domestic product (GRDP) is estimated to have expanded 3.39% in the first half of 2020, the slowest 6-month growth in many years.

The growth rate, however, remains among the highest nationwide and is significantly higher than the national growth average of 1.81% during the period.

Hanoi aims for an economic growth rate 1.3 times the national average for this year.