Although Vietnam saw signs of recovery in the economy the first six months of the year, it still had difficulties in State budgetary collection and spending. According to many economists, existing hardships will prevent the State Budget from achieving the targets.
Gross incomes dropped
According to the Ministry of Finance, June budget revenue was estimated at VND52 trillion, equal to 77.2 percent of the total estimation. To fulfil the annual target, the State Budget must collect at least VND68 trillion a month. However, the June income was VND16 trillion behind the monthly average value. In the first six months, the State Budget gathered an estimate of VND356.52 trillion, accounting for 43.7 percent of the full-year estimation. This value was relatively low from the same period of 2012. Obviously, the budget revenue was lower than the estimation and the value in the corresponding period of last year.
The Ministry of Finance said most tax lines saw a drop in June over May. Specifically, value-added tax collection declined 7 percent (some VND900 billion), corporate income tax slumped 52.9 percent (VND3,565 billion), and excise tax or special consumption tax decreased 13.6 percent (VND600 billion), etc. Only three out of 14 collection items met estimations but their values were small. Other collection items and taxes failed to meet estimations. For instance, the State enterprise sector fulfilled just 39.4 percent and the non-state industry and trade sector reached only 42.7 percent. The underperformance was attributed to economic slowdown and rising prices of some agricultural products.
Specially, key sources of budgetary incomes slumped. Collections from crude oil grossed VND8 trillion in June, a drop of approximately VND380 billion over May. Takings from exports totalled VND19.1 trillion, equal to 96.5 percent of estimated value and down VND400 billion from May.
The Ministry of Finance said the central budget used over VND1.5 trillion of provisional funds (13.9 percent of estimations) for defence tasks, natural disaster healing, epidemic handling and agricultural recovery support.
Hard to achieve
According to experts, Vietnam will difficultly complete the budget collection and spending tasks in 2013, especially from import and export activities. Most experts expressed concern over the budgetary collection in 2013 amid stagnant production, increased corporate bankruptcies, high inventories and bad debts.
The Ministry of Finance admitted that a drop in State budget collection is potential given current progress plus the implementation of tax incentive policies. Meanwhile, spending demand is high on rising investment demand for economic stimulation amid other tasks.
Dr Nguyen Ngoc Tuyen, Director of the Institute of Finance and Economics, said that State budget collection confronted difficulties because the economy grew slowly and many fiscal policies have been carried out to support businesses. In addition, Resolution 01/NQ-CP and Resolution 02/NQ- CP of the Government on accelerating implementation of financial policies and solutions in support of enterprises to overcome difficulties, promote production and business development have also reduced the income of the State Budget, including financial support, tax reduction, tax exemption and rescheduled tax payment. Especially, from July 1, 2013, the amount of taxable personal income also increased.
According to the Ministry of Finance, to complete the budget collection tasks at the highest level in 2013, in the last six months, all ministries, branches and localities must continue to add effort to boost up production and business activities, support enterprises to resolve difficulties, manage incomes while preventing losses and settling overdue debts, and exercise thrift. Besides, it is very important to not issue more policies that may lead to a further drop in State budget revenue in order to improve the budgetary situation.
Dinh Thanh
Vietnamese
