In the near future, the Government will revise and issue supportive policies for businesses and people to cope with the Covid-19 pandemic, including financial and budgetary policies in an appropriate manner.

If the disease is not well controlled, it will greatly affect the State revenue
in the coming months. In the photo: Customs operation
at ha Noi Tax Department. Photo: T.L

Closely control budget revenue and expenditure and thrift

The Government has sent to the National Assembly an additional assessment report on State revenue performance and the implementation of the State budget estimate 2021.

For 2016-2020, total State revenue reached VND 6.89 million billion, exceeding the set plan (100.4%) and the estimated revenue is VND 7.66 million billion.

The average share of State budget expenditure is about 28.8% of GDP. State budget expenditure structure continues to change positively and the share of development investment expenditure by 2020 tops 30% (the target is 25-26%), while recurrent expenditure is about 63% of total State budget expenditure (the target is below 64%).

Generally, for 2016-2020, the average State budget deficit is about 3.45% of GDP, meeting the target of not exceeding 3.9% of GDP according to Resolution 25/2016/QH14 from the National Assembly.

The Government’s report shows better signs for public debt. By the end of December 31, the public debt balance is 55.3% of GDP; Government debt balance is 49.1% of GDP, external debt is about 47.3% of GDP, which is lower than the ceiling level prescribed in Resolution 25 of the National Assembly on the national five-year financial plan for 2016-2020 (or 65% of GDP, 54% of GDP and 50% of GDP, respectively).

“Amid the difficult and challenging situation, motivated by the coordination and effort by the entire political system in drastically directing the implementation of revenue and expenditure and thrift, and keeping strong financical-budgetary discipline, State revenue collection in 2020 has basically reached the set targets,” the Government said.

Pandemic control while economic development

Thanks to financial and budgetary policies, people and businesses have been supported VND 128.33 trillion in response to the Covid-19 pandemic in 2020.

The amount of taxes, land rents, charges and fees subject to exemption, reduction and deadline extension is VND111.5 trillion; VND 16.83 trillion of the State budget is used for pandemic prevention and control and support for people; ensuring resources to meet the disbursement progress of public investment in 2020, contributing to promoting economic growth.

The development of the pandemic in the world is still very complex, heavily depending on the effectiveness and the availability of the vaccine. Some estimates and forecasts show the pandemic may be basically controlled by 2022. Currently, many countries continue to apply great support packages for the economy.

In the country, natural disasters, disease, climate change, drought and saltwater intrusion create difficulties that greatly affect production and people's life.

"In this context, the continued implementation of economic, monetary and financial - State budget solutions to support enterprises, people to overcome difficulties, maintain and develop production - business activities is essential," the Government said.

The Government and Prime Minister directed the Ministry of Planning and Investment to work with relevant ministries and agencies to study and propose amendment to current policies and support measures; research and develop new policies to help businesses and people overcome difficulties due to the pandemic, and submit them to authorities for approval.

The Government was approved by the National Assembly to include deductible expenses of businesses and organisations for expenses to add for Covid-19 pandemic prevention activities when determining taxable corporate income to encourage firms to continue to contribute resources to pandemic prevention. Currently, the Government is building a decree guiding this content.

The Government has directed the Ministry of Finance and ministries and agencies to urgently develop a decree on extension of deadlines for payments of taxes and land rental fee in 2021 for taxpayers affected by Covid-19, which is expected to extend five months for value added tax.

Provide an extension of three months for enterprise income tax amount temporarily paid in the first quarter or second quarter of 2021 and extension of the deadlines for payments of VAT and personal income tax in 2021 for business households and individuals.

Also provide an extension of deadlines for payments for land rental fee payable for the first period of 2021 by the enterprise, organisation, business household or individual; review and reduce fees and charges to reduce input costs for businesses and business households.

“In the coming time, the Government will continue to monitor the development of the Covid-19 pandemic and determine to implement the dual goal of both preventing and combating the Covid-19, and socio-economic recovery and development, ensuring social security and people's life; revise and promulgate supportive policies for businesses and people to respond to the pandemic, including appropriate financial and State budget policies,” according to the Government’s report.

Total estimated revenue in the first two months of the year is VND 286.7 trillion or 21.3% of the estimate, a year-on-year increase of 0.6%.

Amid the complex development of Covid-19 in some localities, maintaining good revenue progress shows that the resilience of the economy and businesses has improved. However, if the disease is not contained soon, it will greatly affect the budget revenues in the next months.