Financial Sector: Efforts to Overcome Difficulties

2:59:37 PM | 16/5/2023

Given the slowing economic development in the first months of 2023, Dak Nong province's budget collection is forecast to be difficult and challenging in 2023. It will require higher determination and consensus of the entire political system, people and businesses.

Mr. Ho Van Muoi, Chairman of Dak Nong Provincial People's Committee, addresses the conference on the operation of the Department of Finance

The Vietnamese economy was forecast to face difficulties and challenges in 2023 as the global economy is facing recession and inflation. Since the third quarter of 2022, the domestic economy has been affected by unpredictable global changes, epidemics, armed conflicts, and prolonged energy crises. Rising interest rates, heightened inflationary pressure on the real estate market, slowing business operations of enterprises and increased input costs amid slowing consumption, and slower-than-expected public investment disbursement are undermining budget revenue in 2023.

According to a report released by the Dak Nong Department of Finance, budget revenue reached VND614 billion in the year to March 13, equal to 20% of the target assigned by the central authorities, 17% of the target assigned by the locality and 75% of the value in the same period of 2022. Most revenue sources tumbled from a year earlier. Specifically, domestic revenue was VND582 billion, equal to 20% of the central target, 17% of the local target and down 26% year on year. Import tax revenue was VND31 billion, equal to 17% of the target and almost unchanged from the same period last year.

The province’s budget revenue did not come as expected in the first months of 2023 and declined from a year earlier. Most budget items contracted, particularly big sources like registration fees (reaching only 14% of the target, declining 45% year on year), personal income tax (equal to 14% of the target, down 43% year on year), environmental protection tax (equal to 12% of the target, down 57% year on year) and mining license fee (fulfilling only 3% of the target, down 10% year on year).

According to a preliminary report, Dak Nong's budget revenue was forecast to decrease by VND145 billion in 2023. The reduction will be seen in wind power, personal income tax, registration fee from real estate transfers and takings from FDI firms. Besides, in the year, the province will continue to apply tax exemption and reduction policies in line with regulations of the Prime Minister and central authorities, such as a 30% reduction of land rent and water surface rent in 2022 for entities affected by the COVID-19 pandemic. The VAT cut will also be a cause.

Currently, to fulfill the budget target in 2023, Dak Nong province is determined to strive for a better outcome than in 2022 although the economy will continue to face difficulties and challenges, externally and internally. Mr. Nghiem Hong Quang, Director of Dak Nong Department of Finance, said that provincial and local agencies need to focus more on carrying out their tasks well; promoting their solidarity, dynamism and creativity; striving to achieve key tasks in 2023, closely following the guidance of the Government, the Ministry of Finance, the Provincial Party Committee and the Provincial People's Committee; and focus all resources to execute tax management, overdue tax recovery and tax loss prevention solutions. At the same time, the Department of Finance advises the provincial government to open investment promotion conferences to call on investors and companies to invest in Dak Nong and urge existing investors to carry out their projects in the province quickly so as to generate a stable, long-term and sustainable source of budget revenue for the province.

Source: Vietnam Business Forum