HCM City Financial Service Contributing to the City's Development

The People’s Committee of Ho Chi Minh City on November 10, 1975 signed a decision to set up the Department of Finance and the Department of Taxation. Over the past three decades, the city’s Department of Finance has made great efforts to complete its tasks, contributing to the building and development of the city’s financial services with abundant revenues to serve the city’s socio-economic development.

 

 

In their early days, the Ho Chi Minh City Department of Finance and Department of Taxation had the task of taking over the former puppet regime’s Ministry of Finance and forming their apparatus, ensuring their allocation of capital for other local agencies and organisations to operate. In the 1975-1978 period, along with the development of local authorities, the Ho Chi Minh City financial network was formed on three levels, including city, district, and ward and commune. In 1978, the two departments were merged into the Ho Chi Minh City Department of Finance. In the 1990s when the country began to shift into a market economy, the local financial service experienced reforms. With the Budget Law taking effect in 1997, the process for planning, deciding and settling budget expenditures became open, transparent and clear. The local financial and pricing network, from the city to ward and communal levels, has proposed many solutions, including additional charges for upgrading the local electricity and water supply systems, bridge and road tolls, and many other new financial institutions for infrastructure development (ie, the Fund for Urban Investment and Development). As a result, resources have been mobilised for building schools, hospitals, cultural and sport centres, thus helping improve the local people’s living standards.

 

In July 2000, the Ho Chi Minh City Securities Trading Centre began its first transaction, creating a new capital mobilisation channel for local enterprises and new investment opportunities for local people. With the event, Ho Chi Minh City continues to prove itself as the leading economic, trade and financial centre in Vietnam. The Ho Chi Minh City financial service proposed that the Prime Minister allow the implementation of ‘personnel and administrative management lump sum’ in three departments and seven districts, which has been approved. In 2001, the Prime Minister decided to expand the model nationwide. Since 2000, the city has begun to decentralise investment capital management to People’s Committees of districts, which had power to decide and allocate capital from concentrated budgets to projects, capitalised at less than VND 2 billion. From September 2001, People’s Committees of districts have had the power to decide and allocate capital for projects, capitalised at less than VND 5 billion.

 

Over the past three decades, staff members of the local financial service have made great efforts to improve their skills with determination to combat corruption and waste, to promote the openness and transparency of the service’s activities.

 

Nguyen Thi Hong, director of the Ho Chi Minh City Department of Finance, said that 2005 had been selected as a year for anti-waste and thrifty practice. Therefore, the Ho Chi Minh City financial service has mad it its top tasks to mobilise and allocate resources in an effective and thrifty manner for economic restructuring and the development of health care, education and scientific research, improving the management and use of State budget and assets. Accordingly, apart from ensuring the achievement of set budget revenue and expenditure targets, the service has advised the Ho Chi Minh City People’s Council and People’s Committee about the allocation of State budget following the principle that ‘total allocated investment capital should be suitable with the city’s budget.’ Priorities will be given to major and urgent projects and projects, which have designs suitable with the existing regulations on investment management and construction. At the same time, the service will diversify solutions to mobilise capital from various economic sectors by exploiting incomes from housing services, issuing urban bonds, exploiting budget-based sources, such as capital amortisation of State-owned enterprises, implementing investment stimuli and mobilising contributions from the people.

 

The Ho Chi Minh City Department of Finance will co-operate with the Board of Enterprise Renewal and Management to promote the restructuring of State-owned enterprises to complete its target of equitising 90 enterprises in 2005. It will also co-operate with the State Treasury not to allocate capital investment to projects on building offices, buying assets, paying telephone bills, and to penalise those staff members who cause wastes in the management and use of public assets.