Stepping up Modern IT Application in Finance Industry

With the theme “Strengthening fiscal sustainability: Medium-term expenditure framework and modern technology solutions,” specialists discussed innovative methods of performance-based budgetary estimation and expenditure and improvement of State budgetary estimation. In addition, the gathering delved into effective use of ICT solutions, development and improvement of database system for national financial administration, improvement of administrative reform of finance industry, and gradual improvement of electronic public administration services. These will lay the groundwork for realising the finance industry development strategy.

 

According to approved plans, the Ministry of Finance aims that all its affiliates from provincial levels upwards will have updated electronic portals or websites; up to 30 public services at Level 3 or higher will be made electronically; 90 per cent of personal and corporate income tax procedures are submitted electronically; 80 per cent of tax payments will be made electronically. Besides, up to 90 per cent of provincial and municipal customs authorities apply electronic customs procedures; apply risk management to customs procedure process with actual check of maximum 10 per cent of goods and 15 per cent of records; and implement single-window customs mechanism for 60 per cent of permits and certificates in electronic form with government agencies. Particularly, by 2015, 20 per cent of public procurement, construction and consultancy bids funded by the ministry’s budgets will be made online. Accordingly, tender invitations, tender announcements, tender qualification notices, tender results, etc. will be made electronic. However, these objectives require appropriate roadmaps and long-term measures.

 

Speaking at the workshop, Deputy Finance Minister Pham Sy Danh stressed that integrating IT into public finance management is essential to reduce the time and effort of the financial sector. According to development plans from 2011 to 2020, public finance reform becomes a top objective of the National Programme on State Administration Reform. The Ministry of Finance is currently accelerating IT application to public finance with the aim of making long strides in public financial management efficiency, budgetary planning and spending, reducing administrative procedures, and enhancing electronic financial services. He believes that Vietnam Finance 2012 continued promoting the efficiency and role of IT, functioning as a bridge for financial professionals, policy makers, and IT solutions companies, in order to accelerate and enhance the efficiency of financial technology applications and meet modernisation requirements of the financial sector and electronic financial development, thus contributing to the successful realisation of the Financial Strategy towards 2020.

 

Fiscal sustainability also caught the greater attention of many countries, especially at the back of global economic crisis in 2008, and challenges of income source stability, rising spending trend for social welfare, education and health policies among others. This is also the topic of concern for international financial institutions such as the International Monetary Fund (IMF) and the World Bank (WB).

 

In fact, fiscal sustainability (public finance sustainability) is the status of controlling incomes and expenditures of the government and protecting the State Budget before economic shocks. Economic experts said that the objectives of fiscal reform are to adjust expenses and tax systems to sustain and balance budget sources. Achieving these goals requires close coordination between legal frameworks in fiscal policies and the combination of citizens and governments at all levels.

 

Mr Vu Nhu Thang, Director of the Financial Strategy and Policy Institute under the Ministry of Finance, said that to meet economic restructuring requirements and ensure fiscal sustainability for objectives and tasks determined in the Socioeconomic Development Plan for 2011-2015 and the Finance Strategy towards 2020, financial institutional systems and policies must be reformed in accordance with these basic solutions: enhancing efficiency of mobilisation, allocation and utilisation of financial resources; fundamentally reforming State Budget resources management methods; improving policymaking; strengthening supervision and enhancing the transparency and publicity of budgetary processes.

 

Habibb Rab, World Bank senior economist, emphasised the importance of spending plan transparency. He said that Vietnam should have medium-term spending plans detailed as much as possible and ensure transparent and thorough analyses and estimations for future expenditures to have specific implementation plans.