In 2017, no funds were allocated for purchasing official vehicles for officials at the level of Deputy Minister or lower.

The Ministry of Finance has just submitted to the National Assembly the report on the state budget for the five years from 2016-2020 and the state budget estimate for 2017. Speaking to the press after the National Assembly session yesterday (October 27th), Mr. Vo Thanh Hung, Director of the State Budget Department, Ministry of Finance, said that the Ministry of Finance will strictly enforce budget spending discipline in 2017 as well as in the medium-term financial plan for the next five years.

Mr. Vo Thanh Hung: "Tightening budget revenue and expenditure discipline in 2017."

Since 2015, there has been a shortfall of thousands of billions of dong in central government revenue compared to the projected figures. This year, the same is likely to happen again. Why is this happening, and what measures is the Ministry of Finance taking to address this, sir?

- Indeed, annual budget revenue still exceeds the forecast, but central government revenue collection is more difficult. Central government revenue has three components (crude oil, import-export balance, and domestic revenue), and these sources are trending downwards, and declining very rapidly. From 2006-2010, the proportion of these two revenue sources accounted for 40% of total budget revenue, but by 2015 it was below 25% (less than a quarter of the total budget). By 2020, it is projected to be only about 14-15% of total revenue.

The reason for the rapid decline is that the rate of revenue collection has not increased rapidly, but revenue from crude oil has decreased due to both reduced production and lower prices. As for revenue from imports and exports, it will eventually be mainly collected from VAT and special consumption tax. The third largest source of revenue is the contribution of local governments to the central government, increasing in line with the overall growth rate of domestic budget revenue.

What do you see as the biggest challenge in balancing the budget for next year?

- Balancing the national budget remains a challenge. In fact, it's difficult every year. The hardest part is figuring out how to distribute the available funds harmoniously. But 2017 was a particularly tense year because we can't afford to let the budget deficit get any higher in the future. According to the National Assembly Resolution, the budget deficit shouldn't exceed 4% of GDP, but the public debt ceiling is 65%, whereas in 2017 the Government presented to the National Assembly a deficit of only 3.5% of GDP.

According to the Ministry of Finance, what are the government and ministries doing to achieve this?

- We must improve the investment environment and develop businesses because, ultimately, this remains the most fundamental and long-term solution. Currently, there are 500,000-600,000 businesses, and we are striving for 1-2 million. This will still be the largest source of revenue for the State through taxes and fees.

On the part of the Ministry of Finance, we will study, propose, and implement adjustments to tax collection policies: Reviewing reasonable direct and indirect taxes (VAT, special consumption tax) with a view to expanding the scope of taxable subjects. Tax obligations on individual goods will not increase, but the tax base will be broadened, and we must also begin to develop and research the collection of property tax.

At the same time, the finance sector must strengthen effective tax collection management, avoid tax evasion, and reduce tax arrears. The Ministry of Finance's goal is to bring tax arrears down to below 5% of total budget revenue. We remember that in the years 2008-2011, many businesses weakened significantly, accumulating very large tax debts. Currently, the Ministry of Finance is reviewing and compiling a report for the National Assembly to allow the write-off of a portion of tax debts of businesses that only exist on paper and are no longer collectible in reality.

Will there be any more significant adjustments to the budget next year, sir?

- In 2017, we also need to restructure towards gradually increasing development spending. The projected development spending for 2017 is 27% of the total state budget. We will continue to adjust salaries and allowances for war veterans, retirees, and civil servants; and require public service units to increase their autonomy (adjusting public service fees according to a roadmap). For ministries and sectors: reduce spending by approximately 1,000 billion VND (including healthcare, education, and training).

These savings should be used for restructuring, instead of directly supporting public service units, allocating these funds to policy beneficiaries and reinvesting them in these sectors and units. When hospitals increase fees, patients demand improved quality and investment in equipment.

Everyone can see that wasteful spending, especially in recurrent expenditures, remains significant in many sectors and localities. Will there be any fundamental solutions to address this situation in 2017?

- The government continues to urge ministries and agencies to intensify savings in recurrent expenditures. This year, despite the requirement to adjust salaries from July 1st, ministries have independently arranged their budgets according to their allocated funds. This is the second consecutive year that ministries have had to independently arrange salary adjustments. The salary fund has increased, but no additional funds are allowed; instead, they must save from other sources to ensure their own salary fund increases.

Regarding official vehicles, some localities are considering contracting out the use of official vehicles, but in reality, only the Ministry of Finance has done so. In the budget allocation for this year and next year (2017), the Ministry of Finance has not allocated funds for ministries to purchase vehicles for officials at the level of Deputy Minister and below.

When reorganizing, there will be surplus vehicles, which will be reallocated. If the Ministries have not yet been able to allocate vehicles for this purpose, they should arrange for the reallocation themselves.

According to Dan Tri