State budget spending plan unclear: experts

01-Nov-2018 Intellasia | The Saigon Times | 6:26 AM Print This Post

Commenting on the government’s budget estimates for next year, which have been reported to the National Assembly (NA), experts said the budget revenue estimates have been made transparent but the allocation plan is seeing the reverse.

At a seminar on the State budget estimates for next year, held in Hanoi on October 29, Vu Sy Cuong, a financial and public policy expert and vice dean of Financial Policy Analysis at the Academy of Finance, said the State budget estimates have been made in a prudent manner as all targets were set with modest increases compared with the estimates for this year.

For example, the budget revenue from land use fees is expected to grow 4.7 percent year-on-year, much lower than the figures seen in the last five years. In addition, the revenue from domestic sources is forecast to go up by a mere 1%.

Cuong, on the other hand, pointed out the shortcomings of the State budget estimates, especially in the spending plan, which remains vague.

In particular, the allocation of State capital for investment projects in each sector was not clarified, which is contrary to the law.

Speaking at the seminar, Pham Dinh Cuong, former director of the Department of Public Asset Management under the Ministry of Finance, said both the budget collection and allocation estimates are problematic.

It is unlikely that the budget revenue will increase as it is difficult to achieve gross domestic product (GDP) growth of 6.7 percent to 6.8%, Cuong noted.

As for spending, the country’s regular expenditures currently account for some 63 percent of the total State budget. Meanwhile, the government, the NA and the central agencies want to use the budget primarily for investment.

At present, Vietnam’s income per capita is estimated at $2,500, equivalent to 40 percent of that of Thailand and 25 percent of that of Malaysia.

Cuong proposed reducing regular expenditures by boosting the financial autonomy of schools, hospitals and cultural establishments.

On October 22, minister of Finance Dinh Tien Dung, on behalf of prime minister Nguyen Xuan Phuc, presented a report on the State budget performance so far this year, the collection and allocation plan for next year and the execution of the five-year financial plan for the 2016-2020 period.

Accordingly, the government expected the budget revenue to reach over VND1.40 quadrillion (US$60.1 billion), including more than VND1.17 quadrillion from domestic production and business activities, VND44.6 trillion from crude oil exports and VND189.2 trillion from import-export taxes.

Meanwhile, budget expenditures next year may hit VND1.63 quadrillion.

The budget overspending for next year is projected to make up 3.6 percent of the GDP, while the public debt-to-GDP was forecast to hit 61.3%.

The ministry will publicise the State budget estimates for 2019 on its portal in line with the 2015 State Budget Law.


Category: Economy, Vietnam

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