Minister of Finance: It is necessary to avoid ineffective use of capital, leading to burden on the budget

Minister of Finance Nguyen Van Thang. Photo: VIET CHUNG

On May 26, explaining at the National Assembly 's discussion session on the draft Law on State Budget (amended), Minister of Finance Nguyen Van Thang said that regarding the decentralization of revenue sources between the central budget and local budgets, taking into account the opinions of National Assembly deputies, the Ministry of Finance will continue to review, research and report to the Government to submit to the National Assembly for acceptance of the unstipulated ratio of revenue sharing between the central budget and local budgets in the law (except for land revenue and land rent divided from the 2026 budget estimate).

In 2026, when it comes into effect, the law will assign the Government to develop and submit to the National Assembly to prescribe the appropriate revenue sharing ratio between the central budget and local budgets, ensuring long-term stability.

Regarding the leading role of the central budget, the Minister said that this has been directed by the Central Government and concluded by the Politburo. Accordingly, the central budget must play a leading role, by 2030, the central budget must account for 58-60% of the total budget expenditure, which means that from 2026, we have had to implement it. Along with that, the division of land money between the central and local governments is implemented according to the Resolution of the Party Central Committee.

National Assembly session on May 26. Photo: VIET CHUNG

According to the Minister, the draft law stipulates the division of land use fees and land rents between the central budget and local budgets in a unified manner throughout the country. Hanoi City is currently focusing on many key projects and works, so the Ministry of Finance will review, research and report to the Government to submit to the National Assembly for acceptance of this content. That is, Hanoi City will retain 100% of land use fees and land rents according to the provisions of the Capital Law.

Regarding the issue of increasing the debt ceiling for localities, the Minister said that when calculating the increase in the public debt ceiling for localities, the Ministry of Finance has studied very carefully. Currently, the public debt ceiling allowed by the National Assembly is 60% and in fact, by the end of 2024, we will only use 34.7% of GDP, so the adjustment of the outstanding debt level of the local budget has also been carefully assessed, based on the correlation with the public debt safety index decided by the National Assembly in the period of 2021-2025. In the period of 2026-2030, the National Assembly expects (in the draft document submitted to the 14th National Party Congress), the state budget deficit will be at 5% and the local budget will be at 0.7% of GDP. Therefore, we raise the public debt ceiling but must control the deficit, how to control it within the limits allowed by the National Assembly and control the quality of loans and the quality of projects.

"It is necessary to avoid the situation where there have been times and periods when some localities have used loans ineffectively, leading to a burden on the budget. Therefore, local loans must also ensure socio-economic and financial efficiency," the Minister said.

Regarding the issue of decentralization and delegation of authority, related to budget expenditures as well as estimates, the Minister said that to ensure proactiveness and flexibility in state budget management, the draft Law on State Budget (amended) this time stipulates the authority for the Government to adjust revenue and expenditure estimates between ministries, central agencies and some localities, but does not increase the total amount of state budget deficit loans decided by the National Assembly, including the decision to use the expected increase in budget revenue in the year.

This adjustment of decentralization and delegation of power has a huge breakthrough. The Ministry of Finance will accept it to ensure maximum decentralization and delegation of power to all levels and sectors in the context that we are striving to focus on achieving the breakthrough growth target, while also being consistent with the Constitution and relevant legal provisions. Currently, the Ministry of Finance is continuing to coordinate with the Economic and Financial Committee to research and propose these two contents to report to competent authorities and the National Assembly for consideration in the coming time.

PHAN THAO

Source: https://www.sggp.org.vn/bo-truong-bo-tai-chinh-can-tranh-viec-su-dung-von-khong-hieu-qua-dan-den-ganh-nang-cho-ngan-sach-post796867.html