HCM City leader proposes allowing city to retain 24pct of revenue

10-Jul-2020 Intellasia | The Saigon Times | 6:02 AM Print This Post

At a meeting held this morning, July 8, HCM City Party Committee Secretary Nguyen Thien Nhan noted that the municipal authorities would propose that the government allow the city to retain 24 percent of its revenue instead of the current 18 percent to ensure sufficient investments in infrastructure and socioeconomic development.

According to Nhan, HCM City has been the country’s economic driver over the past 25 years. Although its population and area account for a respective 9.3 percent and 0.6 percent of the country’s total, the city’s contribution made up 27.5 percent of the nation’s state budget in the 2011-2019 period.

The city has developed effective economic models such as the Saigon Hi-tech Park and the Quang Trung Software City, which have contributed significantly to the city’s revenue.

However, transport infrastructure, which has developed at a snail’s pace, has hampered the city’s development. “HCM City has a population of over 10 million but the second belt road has not been completed (after long years). The city has plans to build eight metro lines but only one has been nearly completed,” Nhan stated.

One of the reasons for this is that while the city’s contribution to the state budget has been continuously increasing, its budget retention rate has dropped sharply over the past 20 years, from 33 percent to 18%.

“The city can generate revenue three times higher than the money it retains. Therefore, if its budget retention rate is increased to 24 percent in the 2021-2025 period and to 28 percent in the 2026-2030 period, the city can contribute VND345 trillion more to the state budget,” Nhan said.



Category: Economy, Vietnam

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