The complex developments of the Covid-19 pandemic since the end of April until now, which have greatly affected production, business and people’s lives, have impacted on the State budget revenues and expenditures, said Minister of Finance Ho Duc Phoc.

Minister of Finance Ho Duc Phoc spoke at the meeting. Photo:Q.H

Support people and businesses

Minister of Finance Ho Duc Phoc stated a report on State budget revenue in May and in the first five months, as well as plans in the first half and solutions in the second half of 2021, at the 57th meeting of the Standing Committee of the National Assembly on June 15.

The minister said State revenue in May was VND98.6 trillion. Revenue in the first five months hit 49.7% of the estimate, rise 15.2% year-on-year. Domestic revenue reached 48.8% of the estimate, up 14.2%; the revenue from crude oil reached 68.8%, down 18.4%; revenue from imports and exports hit 55.2% of the estimate, up 30.1% compared to the same period last year.

State expenditure in May was VND125.8 trillion. Accumulated expenditure in the first five months reached 34.5% of the estimate. Development investment expenditure was 21.4%, expenditure on debt interest payments was 43.3% and recurrent expenditure was 41.6%.

The overall State budget balance in the first five months posted the surplus due to the spending progress being lower than the revenue collection progress.

State revenue collection in the first half the year was estimated at 55%, an increase of 10.9% year-on-year. Domestic revenue expected at 53.5% of the estimate, up 8.4%; the revenue from crude oil was 83.9%, down 8.8%; revenue from imports and exports was estimated at 66.1%, 30.7% growth compared to the same period last year.

State expenditure was 43% of the estimate. The development investment expenditure, expenditure on debt interest payments and recurrent expenditure was estimated at 34.1%, 51.6% and 48.5%, respectively.

Public investment disbursement in this period was estimated at 34.15% of the plan, of those, foreign direct investment was approximately 18.4 % and domestic investment was 37.5%.

In the first months of the year, the Ministry of Finance performed the administration of fiscal policy and supported businesses and people to cope with the Covid-19 pandemic, Minister Ho Duc Phoc said.

The Government allowed to include expenditure for support and aid for Covid-19 prevention and control into taxable income of firms; extended deadline for taxes and land rentals payment in 2021; cut 30% of environmental protection taxes on jet fuel until the end of 2021; implemented the exemption and reduction of taxes, fees and charges in 2021.

In the first five months of the year, the Government extended the deadline for taxes and land rental payment with amount of VND 21 trillion, ND2.46 trillion of fees and charges. This supported businesses and people to overcome difficulties and maintain production and business activities.

Revenues from production and business achieved over 50% of the estimate and increased by more than 10% year-on-year.

The Government has provided funds for key political tasks and Covid-19 prevention, such as ensuring necessary conditions for the election of the XV National Assembly and People's Councils at all levels for 2021-2026.

It has strictly managed expenditures, saved recurrent expenditures from the beginning of the year, restructured the apparatus, reduced staff and reformed public service delivery units; strengthened inspection and examination, and improved State fiscal discipline.

Also, the Government has issued Government bond consistents with the State revenue and expenditures. It has restructured public debt in a sustainable manner.

Strengthening State management to develop stably the stock market; providing solutions to stabilise prices, accelerating the reform of administrative procedures and facilitating to promote production and business.

Continue balance State budget for disease prevention

Although the overall progress of State revenue collection is good, some revenues do not hit targets, including the revenue from restructuring State-owned enterprises, Minister Ho Duc Phoc said.

The amount of corporate tax debt tends to increase. As of May 31, total domestic tax debt was estimated at VND120.46 trillion, growth compared to the end of 2020. The amount of recoverable tax debts was VND63.3 trillion, up 15.5% compared to the end of 2020.

Tax fraud and evasion has occurred, especially for revenue from online business.

Budget allocation including investment and recurrent expenditures of ministries, branches and localities is still slow.

Disbursement of public investment is lower than the same period last year, especially foreign direct investment, which has not created a driving force for growth.

The estimated budget for the national target programmes for 2021-2025 and the policies of the 21 target programmes in the previous period have not been disbursed.

In the final months of the year, there are still many risk factors and challenges, especially the complicated development of the pandemic; the internal capacity of the economy is low and depends on the foreign-invested sector; inflation pressure in the country up due to the influence of the international situation; risks of natural disasters and disease, Minister Ho Duc Phuoc said.

The Government continues to successfully implement "dual goals"; balances and ensures full state budget resources, and mobilises voluntary contributions to purchase Covid-19 vaccines.

It focuses on building and perfecting institutions and projects on finance-State budget according to actual programmes and requirements; well performs collection management; continues to exempt and extend some revenues for those facing difficulties due to the pandemic; strengthens tax inspection and examination; combats transfer pricing and tax evasion; urges collection of outstanding tax debts, reduces outstanding tax debt rate to less than 5% of total State budget revenue in 2021.

The Government will closely control State expenditures. Promote disbursement of public investment, creating a driving force for economic growth. Save recurrent expenditures and cut necessary expenditures.

At the meeting, the Government asked the National Assembly Standing Committee for approval to transfer the unused fund for Covid-19 prevention in 2020 to 2021 to purchase vaccines and transfer unused salary reform funding in 2020 to 2021.

Recover recurrent expenditures that are not really necessary and slow implementation to add to the reserve sources of the central and local budgets for Covid-19 prevention and control.

For the whole year of 2020, the State budget spent VND21.1 trillion on the prevention and control of the Covid-19 pandemic, ensuring people's lives. The central budget has earmarked more than VND14.5 trillion to buy Covid-19 vaccines.