Perform appropriate and effective fiscal and monetary policies
Reporter: Minister, many business representatives have shared that " tax extension and reduction policies have helped overcome cash flow difficulties and helped businesses develop". How does the Minister evaluate the preferential policies on taxes, fees, and charges to support people and businesses in recent times?
Minister Ho Duc Phoc: It must be affirmed that, in recent times, the Government has made great efforts to support the economy through the implementation of a series of fiscal and monetary policies in a reasonable and effective manner.
In the 5-year term of 2021 - 2025, the Economic Recovery and Development Program issued by the Government early last year is an important highlight. Promoting economic recovery and development, the fiscal support package plays a key role. We have implemented many policies to exempt, reduce, and defer many types of taxes, fees, and budget revenues. Overall, the economic support policies in recent years have been at an unprecedented level, accounting for about 8.3% of GDP, much higher than countries with the same economic scale. In particular, fiscal policy plays an important role.
The total scale of support solutions in 2020 is about 129 trillion VND, in 2021 about 145 trillion VND, in 2022 about 233 trillion VND. In 2023, with the spirit of accompanying businesses, supporting people to overcome difficulties to recover and develop the economy, the Ministry of Finance continues to submit to competent authorities and issue support policies under its authority with a scale of about 196 trillion VND.
In addition, the Ministry of Finance has advised the Government and the National Assembly to issue Resolution No. 43/2022/QH15 of the National Assembly on fiscal and monetary policies to support the post-pandemic socio-economic recovery and development program, with an estimated support package of up to VND 347 trillion.
Thus, in the past 4 years (2020 - 2023), the fiscal support package amounted to about 700 trillion VND, helping businesses, people and the economy recover and grow soon. In 2023, within its authority, the Ministry of Finance issued a circular stipulating the reduction of 35 fees and charges such as fees and charges in the fields of securities, healthcare, citizen identification card issuance, appraisal of construction investment projects... The application period is from July 1, 2023 to December 31, 2023, with the amount of reduced fees and charges, the state budget revenue will be reduced by about 700 billion VND...
It is worth noting that when policies are issued, the Ministry of Finance will continuously review and evaluate them, and in cases where "life needs", people, businesses and the economy still face difficulties, the Ministry of Finance will promptly propose to extend the policies, based on careful consideration and calculation, ensuring the financial tasks - the State budget has been set.
Recently, although many industries and sectors continue to recover and have positive prospects; many policies and solutions to remove difficulties and obstacles have been effective; but difficulties and challenges outweigh opportunities and advantages, the Ministry of Finance has proposed financial policy solutions to promote domestic aggregate consumption demand.
Specifically, the Ministry of Finance has researched and proposed a number of solutions to reduce taxes, fees and charges for 2024, such as: continuing to consider reducing VAT by 2% and considering reducing environmental protection tax (EPT) on gasoline and oil as applied in 2023; continuing to review and reduce export tax and import tax rates to support domestic production and business; reducing the collection of some fees and charges...
Perfecting institutions to help businesses take off
PV: Through monitoring, it can be seen that the Minister always attaches special importance to focusing on institutional solutions, "treating businesses' work as his own". Can the Minister share more about this?
Minister Ho Duc Phoc: We must agree that institutional breakthroughs are the shortest path to rapid and sustainable development. Institutional improvement is one of the pillars to create momentum for development. Therefore, the Ministry of Finance remains steadfast in its goal and strives to improve institutions to help businesses take off.
In recent years, the international and domestic situation has been complicated with many difficulties and major challenges, but the collective leadership of the Ministry of Finance has resolutely taken action, proactively and creatively, together with the entire industry, striving to excellently complete the assigned tasks. To fulfill its promise to always accompany businesses and people, the Ministry of Finance has continuously reviewed legal policies, reviewed and cut unnecessary administrative procedures, and not created "sub-licenses" that affect businesses and people.
The goal of the Finance sector is to ensure that financial policies are always one step ahead, contributing to the opening up and effective use of financial resources to serve the country's socio-economic development.
Closely following practical requirements, the Ministry of Finance has promptly proposed to issue legal documents to remove difficulties for businesses and people, control price pressure and inflation, and actively support socio-economic recovery and development.
In particular, in the recent past, in the context of the COVID-19 pandemic, there have been many policies that need to be revised or issued to keep up with reality, "in special circumstances requiring special policies", the Ministry of Finance has had to urgently draft policies to meet practical requirements. Many projects and programs are not included in the law and ordinance development program, or circulars that need to be newly issued or amended and supplemented, but still need to be completed in a short time. The Ministry of Finance has promptly issued those programs and projects on schedule.
All policies of the Ministry of Finance are aimed at people and businesses. For example, in the years 2020 - 2023, the Ministry of Finance proactively proposed, submitted to competent authorities and issued under its authority many solutions in the financial sector and resolved difficulties for businesses and people.
These are solutions on extending, exempting and reducing taxes, fees, charges and land rents; exempting and reducing corporate income tax (CIT), personal income tax (PIT), value added tax (VAT), import tax, environmental protection tax, and many fees and charges. The Ministry of Finance has submitted to competent authorities and issued under its authority 56 legal documents (including: 11 Resolutions of the National Assembly, the National Assembly Standing Committee; 18 Decrees of the Government; 2 Decisions of the Prime Minister; 25 Circulars of the Ministry of Finance).
In the coming time, the completion of financial institutions will continue to be associated with administrative procedure reform to facilitate people and businesses. Financial institutions will quickly approach international practices, meeting the requirements of integration. Regarding finance and budget, the construction and completion of institutions in the coming time will continue to promote synchronous restructuring of the State budget, including restructuring of revenue as well as budget expenditure and public debt management as required in Resolution No. 07-NQ/TW of the Politburo.
In special circumstances, special policies are needed.
Reporter: Minister, implementing a series of fiscal solutions, implementing the extension and reduction of many taxes, fees and charges, there are concerns about whether it will affect the completion of financial and budgetary tasks or not, because in reality there are still many difficulties and challenges?
Minister Ho Duc Phoc: The focus on implementing drastic and synchronous financial policy solutions in recent times has had a positive impact in supporting businesses and people to stabilize production and business. People's lives have returned to normal, contributing to stabilizing the macro-economy, creating favorable conditions to promote economic recovery and growth.
Tax reduction support packages, especially value added tax, special consumption tax, and environmental protection tax on gasoline and oil, have had a positive effect in curbing inflation; contributing to the recovery of production and business activities and economic growth in Vietnam.
Another important success is that public debt and government-guaranteed debt remain at a sustainable and stable level of around 36% of GDP in 2023 before falling to around 34.4% in 2025, much lower than the 60% threshold set by the National Assembly and still at a sustainable level.
Despite many successes in management, we must also see that from now until the end of the year there will be many difficulties. According to the Resolution on the 2023 budget estimate, the National Assembly decided that the total state budget revenue in 2023 is more than 1.6 million billion VND. However, due to economic difficulties, completing the revenue estimate is still a challenge for the national budget and the budgets of many localities, especially those with large revenue sources from land and real estate business activities.
Meanwhile, the challenge in budget expenditure is that investment expenditure is still lower than planned. Investment expenditure plays an important role in the fiscal support package but the disbursement progress is slow. Many investment expenditures from the socio-economic recovery program have not yet been disbursed. Although the National Assembly Standing Committee has had many solutions, the situation of "full accumulation, hungry contribution" of investment expenditure has changed little. This will have a major impact on economic growth in the 2023 - 2025 period.
I think that in special circumstances, special policies are needed. One law can be used to amend many laws and resolve bottlenecks.
Currently, the core issue is to increase the aggregate demand of the economy, so fiscal policy is only one of the solutions to solve the difficulties. It is necessary to implement synchronous solutions such as: implementing well monetary policy, investment policy, reforming administrative procedures, improving the investment and business environment effectively. Accelerating the disbursement of public investment capital, using public investment to lead private investment, activating all social resources.
In addition, it is necessary to continue to synchronously implement solutions to remove difficulties for production and business enterprises, especially in the real estate sector; continue to promote the business environment to increase the attraction of foreign direct investment.
Another problem is that, although the economy has recovered, export difficulties and the market is gradually shrinking, creating no small amount of pressure on Vietnamese enterprises. Therefore, in the coming time, it is necessary to continue to remove difficulties, expand the market, and increase the export of Vietnamese goods abroad. To do so, it is necessary to have the participation of ministries and branches, step up investment promotion, connect supply and demand, seek partners, and develop potential export markets.
In addition, it is necessary to continue mobilizing credit capital and other resources to support production and business in addition to fiscal solutions. At the same time, it is necessary to reduce administrative procedures and remove difficulties for private investment projects, land, renewable energy projects, industry, etc.
I think that implementing fiscal policy well in 2023 in the context of a complex world and an economy that has not really made breakthroughs in the growth model is a very difficult task. From now until the end of the year, the Ministry of Finance will synchronously deploy solutions to collect the right and sufficient revenue for the budget, in addition to implementing fiscal solutions to support people and businesses.
In the coming time, the period of 2024-2025, it is necessary to continue implementing the principle of fiscal policy management which is proactive and flexible in short-term response but adheres to the principles of budget balance and financial discipline in the long term. The world is facing many unusual changes, so we also need specific solutions to cope with them.
The Government and the Ministry of Finance are continuing to monitor the domestic and international economic situation to adjust fiscal policies accordingly. Accordingly, it is necessary to ensure that difficulties for the economy are resolved while also ensuring a balanced state budget, in the spirit of harmonizing benefits and sharing risks and difficulties between the state and enterprises.
PV: Thank you very much, Minister!
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