Enhancing the economy's capacity to absorb capital and strengthening the connection between banks and businesses.

Prime Minister Pham Minh Chinh has just signed Official Dispatch No. 990/CD-TTg dated October 21, 2023, on continuing to resolutely implement solutions to enhance access to credit, remove difficulties for production and business activities, and fulfill the task of collecting state budget revenue in 2023.

The official dispatch stated: In the past period, the Government and the Prime Minister have issued many resolutions and directives to ministries, agencies, and localities to resolutely implement appropriate and effective solutions to improve the economy's access to and absorption of credit capital, resolve difficulties and obstacles, and promote socio -economic recovery and development. However, access to credit capital remains difficult, credit growth is low, reaching only 6.29% as of October 11, 2023, much lower than the same period in 2022 (11.12%) and the target for the whole year 2023 (14-15%); state budget revenue for the first nine months is estimated at 75.5% of the annual forecast.

Enhancing the economy's ability to absorb capital and strengthening the connection between banks and businesses (Figure 1) — The Prime Minister has instructed the State Bank of Vietnam to direct credit institutions to continue reducing lending interest rates. (Illustrative image)

In order to promptly address difficulties and obstacles, unlock and utilize resources, improve the economy's ability to access and absorb credit, promote growth while maintaining macroeconomic stability, and strive to achieve the highest possible results in fulfilling the targets and indicators of the socio-economic development plan and the state budget for 2023, Prime Minister Pham Minh Chinh requested:

The State Bank of Vietnam, in coordination with relevant ministries and agencies , will continue to thoroughly research and decisively, effectively, and promptly implement the tasks and solutions outlined in Government Resolution No. 01/NQ-CP dated January 6, 2023, the resolutions of regular Government meetings, directives from Government leaders, and legal regulations. It will closely monitor market developments to proactively, flexibly, and effectively manage monetary policy, prioritizing growth while maintaining macroeconomic stability, controlling inflation, ensuring major economic balances, and safeguarding the safety of the credit institution system. It will also manage monetary policy tools such as exchange rates, interest rates, and money supply in a coordinated, synchronized, and effective manner to further alleviate difficulties and meet the capital needs of the economy to promote production and business, create jobs, and provide livelihoods for the people.

Manage credit growth rationally and effectively, striving to achieve the highest possible targets, improve credit quality, direct credit towards production and business sectors, priority sectors, and growth drivers of the economy (especially investment, consumption, and exports), and control credit to sectors with potential risks. Implement policies to encourage credit to feasible projects and businesses that serve growth drivers.

Thoroughly review and decisively and effectively implement the 120,000 billion VND credit program for lending to investors and homebuyers of social housing projects, worker housing projects, projects to renovate and rebuild old apartment buildings, and the 15,000 billion VND credit package for the forestry and fisheries sectors; in which the leading role of state-owned commercial banks and the active and creative participation of joint-stock commercial banks should be promoted.

Further accelerate administrative procedure reforms, review and resolutely cut down outdated administrative procedures that are costly, cumbersome, and increase expenses for people and businesses. Implement decisively, strongly, and effectively solutions to facilitate access to credit for businesses and individuals, enhance the economy's capital absorption capacity, and further strengthen the bank-business connection; continue to effectively support and share resources with customers facing difficulties, and promote the recovery of production and business activities. Guide and facilitate the Social Policy Bank to effectively implement preferential credit programs for the poor and other policy beneficiaries.

In accordance with its functions and authority, the State Bank of Vietnam (SBV) is urgently reviewing and evaluating the implementation of Circulars No. 02/2023/TT-NHNN, No. 03/2023/TT-NHNN, No. 06/2023/TT-NHNN, and other relevant circulars and regulations to proactively and promptly consider, amend, supplement, and issue new regulations, especially those mechanisms and policies that expire in 2023. This aims to promptly resolve practical difficulties arising in accessing capital for individuals and businesses, and in the buying and selling of corporate bonds by credit institutions, ensuring consistency, effectiveness, and suitability to the actual situation, stabilizing the monetary market, and ensuring the safety of the credit institution system, in accordance with the Government's resolution, the Government leaders' directives, and the provisions of the law.

Continue directing credit institutions to review and reduce operating costs, simplify lending procedures and conditions, strengthen the application of information technology and digital transformation to further reduce lending interest rates; implement appropriate credit packages from commercial banks to support people and businesses in overcoming difficulties and boosting production and business, focusing on priority sectors and growth drivers of the economy; promote the spirit, social responsibility, and business ethics of the credit institution system, and be more proactive in participating in the implementation of policies, promotional programs, socio-economic development plans, poverty reduction, and social security.

The Ministry of Finance, in coordination with other ministries, agencies, and localities , will implement and manage expansionary fiscal policy in a rational, focused, and effective manner, coordinating synchronously, closely, and harmoniously with monetary policy to promote investment, especially non-state investment, and boost public investment to serve growth, stabilize the macroeconomy, control inflation, and ensure the major balances of the economy.

Continue to implement proactive and effective measures to increase revenue and reduce expenditure; solutions regarding tax, fee, and land rent exemptions, reductions, and extensions to support people and businesses in accordance with the Resolutions of the National Assembly and the Government, and the directives of the Government leaders. Proactively propose solutions for tax, fee, and land rent exemptions, reductions, and extensions in 2024, and submit them to competent authorities for timely consideration and decision.

Implement decisive measures to strive for state budget revenue in 2023 exceeding the target set by the National Assembly. Direct tax and customs agencies to strengthen revenue management, combat revenue loss, smuggling, trade fraud, and tax evasion; focus on handling and recovering outstanding tax debts, ensuring accurate, complete, and timely collection; expand the revenue base, especially from e-commerce, food and beverage services, and night-time economic activities; enhance the application of information technology and digital transformation, especially in tax collection from tourism, food and beverage, and entertainment services; urge timely collection of receivables as recommended by inspection, auditing, and other functional agencies; and strengthen tax inspections and post-clearance inspections.

Implement tax refunds quickly, promptly, and in accordance with regulations, ensuring that refunds are granted to the correct recipients and in compliance with tax laws and policies.

People's Committees of provinces and centrally-administered cities : Based on Government resolutions and Prime Minister's directives, closely coordinate with the State Bank of Vietnam and credit institutions in their localities to effectively implement solutions to improve access to credit for people and businesses, support businesses in developing production and business, promote economic recovery and growth; further accelerate administrative procedure reform, digital transformation, and strengthen administrative discipline in the performance of official duties.

In close coordination with tax and customs authorities, strengthen the management of state budget revenue collection, ensuring accurate, complete, and timely collection, preventing revenue loss, and handling outstanding tax debts; proactively propose solutions and organize the direction and implementation of decisive measures, striving to complete and exceed the assigned state budget revenue target for 2023.

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