REVIEW
of
FINANCE -
Apr. 2018
9
now heavily dependent on the global economic
turmoil (the opening of the economy by the
size of foreign trade/GDP in recent years is up
to 150%). Vietnam’s growth depends heavily
on exports. When the world economy is still
difficult, Vietnam’s economy will be affected.
Secondly
, revenue was reduced due to tax
policy change, but the revenue estimate continued
to increase. Under the bilateral and multilateral
trade commitments that Vietnam participates in,
many import items will be cut tariffs, and have
a strong impact on revenue from import-export
activities. However, the budget revenue from
import-export activities in 2018 will not increase
as much as 2017, which is also a favorable factor
for completing the revenue estimate from this
sector. In contrast, the total estimated budget for
State budget revenue in 2018 increased by 13%
compared with the estimate for 2017 will be a big
challenge for the financial sector.
Thirdly
, the challenge of the implementation
of revenue estimates from domestic production.
In the state budget revenue projection in 2018,
the domestic revenue is estimated at VND 1,099.3
trillion VND, the crude oil revenue is estimated
at VND 35.9 trillion, the estimated revenue from
import and export is VND 179 trillion.
Domestic revenue will have to increase by 11%
compared to the estimated 2017 is a challenge
when the situation of domestic production is
difficult, inflation is still below 5% and domestic
revenue is secondary. Much of the revenues
from land (estimated to still account for 6.3% of
total state budget revenue). In 2017, the over-
collection of land use levy, revenue from foreign
direct investment (FDI) sector and the non-state
sector is relatively high compared to 2016 but still
not reached. Estimates are too high (estimates
are 23.4% and 23.8% respectively compared to
2016).
In the 2018 projection, it is expected that the
level of revenues for state-owned enterprises will
increase by 8% compared to the projection for
2017, because in recent years the average growth
of this sector is only around 4-5%; Similarly,
for non-state revenues, an increase of 15% is a
relatively high increase.
Fourthly
, implementing state budget with
savings and efficiency. The implementation of
state budget savings in 2018 is difficult due to:
- In term of state budget expenditures:
The
restructured expenditures shall be restructured
in the direction of increasing the proportion
of investment expenditures, reducing the
proportion of regular expenditures and
intensifying the application of market principles
in expenditure management such as package
expenditures, applying public car loans, step by
step and correctly calculating the cost of public
service delivery, on that basis, restructuring the
state budget in each branch and each domain.
However, of the restructuring of the state
budget being from the ministries, branches
and localities associated with the restructuring
of investment expenditures, recurrent
expenditures, restructuring of public service
delivery units, reorganizing the apparatus
and streamline the staffs according to the
Resolutions of the Central Committee and the
National Assembly.
- In terms of investment expenditure:
In 2017,
investment expenditures have not met the
budget and this is also a big challenge for the
State budget implementation with investment
expenditure when the state budget estimate 2018
reached the target of 12% increase compared to
the year. 2017 (although this increase is much
lower than the corresponding figures for 2016
and 2017, respectively up 30.7% and 40% over
the same period).
Fifthly
, the problem of borrowing and
restructuring of loans. Due to the deadline
for repayment, but the allocation of funds for
repayment of principal difficulties, Vietnam was
forced to issue government bonds to borrow
Total statebudget revenueandgrant
GDP
CPI
FIGURE 1. INCREASE RATE OF STATE BUDGET REVENUE, GDP
AND ANNUAL COMMODITY PRICES (2006-2017)
Source: Measured and calculated by the Author
