At the sitting, Nguyen Duc Hai, chairman of the NA Committee on Finance and Budget, made reports over the results of the implementation of socioeconomic development and State budget plans for 2020, State budget revenue collection and spending plans for 2021, the execution of the 2016-2020 financial plans on socioeconomic development and solutions for socioeconomic development in the 2021-2025 period.
Reporting the State budget plans, Minister of Finance Dinh Tien Dung also said that in 2020, State budget collections are expected to reach VND1,323 trillion, down 12.5% against the target. Several collection targets have failed to be fulfilled, including collections from taxes and fees.
Meanwhile, the budget spending is expected to total VND1,686 trillion this year, inching down 3.5% from the initial estimate. The Government has cut the spending on some unnecessary plans, tightened expenditures and focused resources on disease infection prevention and control and support for residents and firms to overcome the consequences of floods and natural disasters.
As such, the NA Committee on Finance and Budget proposed the Government carefully assess the efficiency of State budget collections, especially from stake sales in State firms, crude oil and divestment, to adopt appropriate solutions.
Besides, the Government should continue taking drastic and effective measures to obtain the highest State budget collection for the rest of the year, the local media reported.
The NA Committee on Finance and Budget pointed out that the country’s regular spending remained high, accounting for 63.4% of the total budget expenditure, while aid policies for residents and firms hit by the coronavirus pandemic have yet to bring about as good results as expected.
The disbursement of public investment capital remained slow, reaching 24.8% of the target between January and September.
In 2020, the budget deficit is estimated at 4.99% of the nation’s gross domestic product (GDP), up 1.55% against the target. Due to the impact of the coronavirus pandemic, the rise may be acceptable, said the committee.
However, the budget deficit is expected to rise by an additional VND38.5 trillion at 5.59% of GDP as collections from stake sales in State firms may fail to be done.
Given the rising public debt, the NA committee also proposed the Government focus on its direct debt payment obligations.
In 2021, the Government targets the total budget collection at VND1,343 trillion, while the budget spending is expected to be VND1,687 trillion, resulting in an estimated budget deficit of VND343 trillion. The Government’s direct debt burden will stand at over 25% of the 2021 State budget collections.
This is a dangerous sign, posing high risks for the nation’s financial safety, according to the NA committee.
This article was originally published in Sgtimes