REVIEW
of
FINANCE -
Apr. 2018
7
ISSUES OF STATE BUDGETING FOR2018
ASSOC. PROF. VU SY CUONG, PhD.
– Academy of Finance*
The economic context of 2017 raised both advantages and disadvantages for the state budgeting.
Overcoming the difficulties and taking advantages of the achieved results in 2017 would bring about
good lessons for the state budgeting of 2018. The paper summarizes the practical situation of state
budget revenue and spendings in 2017 and forecasts for 2018.
Keywords:
Economics, finance, state budget, budget estimation
Received: January 2
nd
, 2018
Revised: January 18
th
, 2018
Accepted for publication: January 25
th
, 2018
Practical situation of state budgeting in 2017
Vietnamese economy stepped in 2017 with
great local and external challenges. The goal
of economic growth for 2017 was 6.7% (to
target at the growth rate for the entire period
of 2016-2020 of 6.7%-7%) which was evaluated
as relatively high, while the national economy
had not experienced any big change and still
suffered from macroeconomic instabilities from
the previous periods.
Facing this, from year 2017, the Government
promulgated the Resolution No. 1/NQ-CP dated
January 01
st
2017 on themajor duties and solutions
to moderate socio-economic development plan
and state budget estimation scheme for 2017 (the
Resolution No.1). The action topic of the year
2017 was defined “Strengthening the regulations,
appreciating responsibilities, creativities, fast
and sustainable development”.
In 2017, in order to successfully implement
the estimated state budget plan, Ministry of
Finance prepared and submitted to the Prime
Minister: (i) the Instruction No. 14/CT-TTg dated
April 19
th
2017 on steering the implementation
of financial and state budget duties for 2017; (ii)
Administration Plan of State budgeting for 2017
following the programs of economic growth
with strict ensurance of implementation right
from the early on.
State budget revenue was dependent on
different factors such as economic growth,
oil prices, export and import or inflation. The
indicator of state budget revenue for 2017 was
higher than estimation made from 2016 making
the implementation of this duty face great
challenges. According to estimates made by
the Ministry of Finance December 31
st
2017, the
total value of state budget revenue for 2017 was
more then VND 1,283.2 trillion exceeding the
estimated plan by the absolute figure of VND
71 trillion (equivalent to a ratio increase of 5.9%
comparing to the plan), increasing VND 43.7
trillion comparing to the Government’s report
of 25.6% out of GDP; including taxes and fees of
21%. The excessive figure for local state budget
revenue mainly came from land use...
Comparison of annual budget revenue
estimates shows that the state budget revenue
in 2017 is expected to be quite high compared
to the current state of the economy (2017 budget
revenue projections up nearly 20% compared to
2016 budget revenue). As a result, the completion
of the 2017 estimated budget revenue (even more
than 5% of the estimate) is a great success, and in
the context of low inflation in 2017, State budget
revenue projections for 2017 are encouraging as
inflation has always had a strong influence on
state budget revenue.
On state budget expenditure, the application
of the 2017 State Budget Law (with some changes
compared with the 2002 State Budget Law),
the Ministry of Finance has issued documents
guiding the ministries, branches and localities to
implement the positive budget for 2017 to take
initiative in fully saving expenditures right from
the stage of budget allocation and in the course of
implementation, reducing request for additional
funding and advance of the next year’s budget;
To carry out the management and strictly use
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