Increased spending, decreased budget revenue: What does the Ministry of Finance say?

Local government revenue collection for the first eight months reached 76%, while central government revenue was only 61.7%. Budget expenditure was 60.5% of the projected amount and increased by 5.6% compared to the same period last year.

Regarding the budget shortfall in the first eight months of 2016, at a recent government press conference, Deputy Minister of Finance Vu Thi Mai stated: Budget revenue for the first eight months of the year is estimated at 649 trillion VND, equivalent to 64% of the projected target and a 5.3% increase compared to the same period last year. Looking back at the first eight months of 2015, budget revenue reached 67.7%, a 6.7% increase compared to the same period the previous year. Therefore, the budget revenue for the first eight months of 2016 is still lower than in 2015.

Deputy Minister of Finance Vu Thi Mai.

Specifically, domestic revenue reached 66.6% and increased by 17% compared to the same period last year. This year's domestic revenue collection progress is lower than that of the two preceding years (2014, 2015) for the same period. However, with the domestic revenue results, important revenue streams from production and business activities still showed considerable growth. For example, revenue from industry, commerce, and state-owned enterprises reached 72% of the projected target and increased by 22% compared to the same period last year, while revenue from foreign-invested enterprises reached 66.4% of the projected target and increased by 14% compared to the same period last year.

Revenue from state-owned enterprises, which accounts for a large proportion of the total, only reached 53% of the projected amount, a decrease of 5% compared to the same period last year. This is due to the drop in oil prices, leading to a decrease in oil and gas exploration activities; hydropower enterprises being affected by unusual weather and severe drought; and mining enterprises being impacted by sharply falling global prices, making it difficult to collect dividends and remaining after-tax profits in the first eight months of the year.

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Deputy Minister Vu Thi Mai further stated that revenue from crude oil only reached 49.7% of the projected target and decreased by 43% compared to the same period last year. Crude oil production also reached 74% of this year's plan, but the price decreased by $18.7/barrel compared to the projected price (the projected price was $60/barrel, but the actual price was only $41.3/barrel).

Revenue from import and export reached 64% of the projected target and increased by 3.3% compared to the same period last year. This revenue was affected by objective factors such as tax cuts during the integration process. In addition, the export value of some commodities that contribute significantly to budget revenue was also lower than the same period last year.

Local government revenue collection for the first eight months reached 76%, while central government revenue collection only reached 61.7%. Local revenue is currently higher than central government revenue. The Ministry of Finance is now aggressively implementing all solutions to complete the 2016 revenue target. Key solutions include urging and collecting tax arrears, conducting inspections and audits, and controlling tax declarations... to achieve this year's revenue target.

Regarding budget expenditure, in the first eight months, it reached 770 trillion VND, equivalent to 60.5% of the projected budget and a 5.6% increase compared to the same period last year. The progress of development investment spending also increased by 9.6% compared to the same period last year. In reality, following Government Resolution 60, disbursement and investment spending have been more active, although the progress is still slower than projected. However, compared to previous months, the growth this past month was better.

Debt repayments for aid have been made on time as committed, ensuring full and timely fulfillment of payment obligations. Simultaneously, expenditures on economic development, national defense and security, and administrative management have also been on schedule.

According to VOV