State budget revenue and expenditure balance

(Baonghean) - The New Week section of Nghe An Newspaper respectfully introduces an interview with Deputy Minister of Finance Huynh Quang Hai on the state budget revenue and expenditure in the first 7 months of the year and basic solutions for the last months of 2015.

Deputy Minister of Finance Huynh Quang Hai.

PV:Dear Deputy Minister, how does the Ministry of Finance assess the country's economic activities in the first months of the year?

Deputy Minister Huynh Quang Hai:In the economic activities of the country in the first months of the year, the most noteworthy is the business situation - the most important factor contributing to the State budget. Through tax registration up to July 20, 2015, the number of active businesses was 513,437, an increase of 30,822 (equivalent to 6.4%) compared to December 31, 2014. Up to 51,216 newly established businesses, equal to 66.8% of the number of newly established businesses in the whole year of 2014. This is a very encouraging plus point in the domestic economic picture.

From a market perspective, the consumer price index in the first 7 months of the year increased by 0.86% compared to the end of 2014, along with the flourishing import and export activities with the total value of Vietnam's goods estimated at 187.9 billion USD, up 12.9% compared to the same period in 2014, in which the total export value is estimated at 92.3 billion USD, up 9.5%... are encouraging signs. Regarding foreign direct investment capital, the accumulated capital in the first 7 months of the year is estimated at 7.4 billion USD, up 8.8% compared to the same period last year (the same period increased by 2.3%) with 1,068 newly licensed projects, up 20.1% compared to the same period; 341 projects increased capital, up 13.7%.

PV:On the basis of a stable economic development, what are the highlights of the implementation of state budget collection, Deputy Minister?

Deputy Minister Huynh Quang Hai:In the context of improved production and business activities of enterprises, the implementation of the 2015 State budget estimate also has many positive points. Regarding the State budget revenue, the State budget balance revenue in July is estimated at 92.77 trillion VND; the accumulated revenue for 7 months reached 544.6 trillion VND, equal to 59.8% of the estimate, up 6.6% over the same period in 2014. Of which, the most encouraging is the estimated domestic revenue of 73 trillion VND, up about 26.5 trillion VND, equivalent to an increase of 57% over the previous month; the accumulated revenue for 7 months reached 404.36 trillion VND, equal to 63.3% of the estimate, up 15.7% over the same period (excluding land use fees, which increased by 13.8%), quite good compared to the same period in recent years. This revenue shows that the positive change of the economy has contributed to increasing the State budget revenue.

Recently, newspapers often talk about the shortfall in revenue from crude oil, which is real and is one of the difficulties in state budget collection, but it is not an insurmountable difficulty. Cumulative revenue from crude oil in the first 7 months is estimated at 42.27 trillion VND, equal to 45.5% of the estimate, down 33.9% compared to the same period in 2014. Although the oil output paid in the first 7 months is estimated at 9.69 million tons, equal to 65.8% of the yearly plan, up 9.2% compared to the same period; however, due to the sharp drop in oil prices, only reaching an average of about 60 USD/barrel, down 40 USD/barrel compared to the estimated price, the revenue from crude oil is low both in terms of the estimated progress and compared to the same period last year. In addition, we have budget revenue from import-export activities estimated at 14 trillion VND (total revenue reached 22 trillion VND, up 1.6% compared to June; VAT refund according to the regime 8 trillion VND). Accumulated revenue for 7 months is estimated at 147.7 trillion VND, equal to 56.8% of the estimate, up 2.6% compared to the same period in 2014. After implementing VAT refund according to the regime of 52 trillion VND, the balance revenue from import-export activities is estimated at 95.7 trillion VND, equal to 54.7% of the estimate).

PV:Deputy Minister, please let us know that the revenue is quite good, ensuring implementation according to the estimated progress, so how has the State budget expenditure and the State budget revenue-expenditure balance been managed by the Ministry of Finance?

Deputy Minister Huynh Quang Hai:In my opinion, the State budget expenditure is also guaranteed to be implemented according to plan and estimate. Total State budget expenditure in July is estimated at 95 trillion VND; accumulated expenditure in 7 months is 645.3 trillion VND, equal to 56.3% of the estimate, up 8.1% over the same period in 2014. Of which, the expenditure for development investment is prioritized, in July is estimated at 14.35 trillion VND; accumulated expenditure in 7 months is 99.45 trillion VND, equal to 51% of the estimate, up 6.3% over the same period in 2014. In addition, we also spend on debt payment and aid: estimated at 13.95 trillion VND; accumulated expenditure in 7 months is 94.4 trillion VND, equal to 62.9% of the estimate, up 15.4% over the same period in 2014, ensuring full and timely payment of debts due as committed.

In addition, expenditure on socio-economic development, national defense, security, and administrative management in July was estimated at 65.9 trillion VND; accumulated expenditure in 7 months reached 446 trillion VND, equal to 58.2% of the estimate, up 5.9% over the same period in 2014. State budget expenditure tasks were promptly met according to the assigned estimate and implementation progress of budget-using units, ensuring funding for national defense, security, and social security.

Regarding the State budget balance, with the State budget deficit in the first 7 months estimated at 100.68 trillion VND, approximately 44.5% of the annual estimate, we have effectively balanced the State budget revenue and expenditure. Capital mobilization for the State budget has also been promoted: as of July 25, 2015, over 114.5 trillion VND of Government bonds have been issued to offset the State budget deficit and for development investment, equivalent to about 41.6% of the domestic capital mobilization task for the whole year. Recently, at the regular Government press conference in July, many press agencies raised questions about the source of money supply for the State budget, or whether the State budget borrowed money from the State Bank because of State budget difficulties. In fact, this is a technical issue, the State Bank's support for the State budget is only temporary, for a very short time and must be repaid within the budget year. With the revenue for the first 7 months reaching 59.8% of the estimate, 6-7% higher than in the last 2-3 years, we also expect the budget to exceed the estimate. Regarding the State budget expenditure, the Ministry of Finance is determined to keep the budget deficit at no more than 5% according to the National Assembly's Resolution. Therefore, the budget management cannot be allowed to be in deficit compared to the plan.

PV:To continue to effectively manage state budget revenue and expenditure from now until the end of the year, according to the Deputy Minister, what are the necessary and basic solutions?

Deputy Minister Huynh Quang Hai: From now until the end of the year, although the economy has had positive changes, there are still many potential difficulties and challenges affecting the implementation of the State budget. Therefore, it is necessary to continue to monitor developments and implement the State budget revenue and expenditure estimates in accordance with the goals and directions set by the Government and the Prime Minister; ensure the balance of budget revenue and expenditure; synchronously deploy solutions to strive to increase budget revenue, collect correctly and fully, prevent fraud, tax evasion, loss and arrears; manage budget expenditures closely, economically and effectively, and minimize the addition of extra budget estimates; strive to collect the State budget for the whole year to meet and exceed the assigned estimate.

Therefore, the Finance sector will continue to coordinate with relevant agencies and units to develop documents guiding the State Budget Law; coordinate to discuss the 2016 State budget expenditure estimates with ministries, central agencies, corporations and groups, and discuss the local budget expenditure estimates. The Ministry of Finance will receive and complete the budget plan and plan report to work with the People's Committees of provinces and cities on the 2016 State budget estimates, complete the 2016 State budget framework, and simultaneously develop a report assessing the implementation of the 2015 State budget estimates and the 2016 budget estimates.

In general, the whole industry will focus on organizing and implementing well solutions on State budget collection; strengthening tax inspection and examination, post-clearance inspection; stepping up VAT refund inspection and examination to ensure compliance with legal provisions; strengthening solutions to combat transfer pricing, limiting tax arrears, strictly handling cases of tax evasion, and dishonest declaration of amounts payable to the State budget. In addition, the organization and management of the treasury to ensure full and timely response to the State budget's spending needs, continuing to organize the issuance of Government bonds according to the assigned plan will be promoted along with reviewing, negotiating, and accelerating the disbursement of foreign capital in cash to balance the State budget; and mobilizing and disbursing foreign loans according to plan.

In addition, the ministry will closely monitor the developments in world market prices, coordinate with other ministries to manage the prices of gasoline, milk for children under 6 years old, liquefied petroleum gas, sugar, fertilizer, seaport services, steel, cement, animal feed, etc. The important thing is that the industry will continue to promote comprehensive economic restructuring, especially restructuring of state-owned enterprises. Strive to complete the plan to arrange and innovate state-owned enterprises in the 2014-2015 period according to the set plan; strengthen financial discipline and order, promote administrative reform, practice thrift, combat waste; strengthen inspection, examination and financial supervision, etc.

PV:Thank you very much, Deputy Minister!

Red River