The State budget revenue of Ho Chi Minh City suffered a sharp fall, despite recording an increase in spending during the first half of the year, largely due to the impact of the novel coronavirus (COVID-19), the municipal Statistics Office reports.

Throughout the reviewed period, roughly VND163.173 trillion, equivalent to US$7 billion, was collected for the State budget in the southern metropolis, making up 40.2% of this year’s target, representing an annual drop of 14.4%.

Simultaneously, budget spending was estimated to stand at VND29,672 trillion VND, representing a rise of 22.2%.

According to Director of the Statistics Office Huynh Van Hung, this marks the first time that the municipal State budget revenue has endured a fall, while spending surged during the first half of the year.

Hung therefore attributes the downturn to the fact that a majority of local businesses and economic activities have been severely affected by the COVID-19, while policies such as tax reductions and tax payment deadline extensions have been implemented in an effort to help local enterprises get through the tough times.

Moreover, foreign tourist arrivals, new businesses, and investment in the southern city has plummeted sharply, with the number of firms suspending operations soaring by 40.6% on-year.
According to the city’s Customs Department, the 10 import commodities that recorded the highest contribution to the budget, including completely-built automobiles, motorbikes, steel, and petrol, all witnessed sharp declines in their turnover by  between 15% and 50% from a year previously.

Elsewhere, products with increased export turnover such as computers, electronic devices, agro-aquatic products, pharmaceuticals, and chemicals are entitled to low tariffs under recently-signed free trade agreements, meaning they are unable to make up for the fall in import tariff revenue.

To reach this year’s budget revenue target, the Ho Chi Minh City People’s Committee is making every effort to support businesses towards striving to spur economic growth whilst speeding up the divestment of State capital from State-owned enterprises.