Falling tax receipts inflate State deficit
HA NOI — Reduced tax collections threaten to widen the State budget deficit this year, warns the General Statistics Office (GSO).
State budget revenues through mid-August totalled an estimated VND418.5 trillion (US$19.9 billion), equal to about 56.5 per cent of this year's target and therefore somewhat behind the pace needed to meet the target at year's end.
Meanwhile, State spending totalled VND534 trillion (US$25.4 billion) during the period, resulting in a deficit estimated at VND116 trillion ($5.5 billion).
Boosting tax revenues in the remaining months of the year would require flexible measures to curb inflation, increase business and production, hasten investor disbursements, and boost consumer demand in order to reduce inventories.
Yet the deputy director of the Ho Chi Minh National Politics and Administration Institute, Le Quoc Ly, said the nation's current fiscal policies had done little to nurture tax collections.
Ly pointed to slow tax payments, wasteful public spending, and slow progress on many public construction projects.
Do Trong Kha nh, director of the Ministry of Finance's finance and monetary department, said the Government needed to increase the transparency of public expenditures and rein in borrowing by State-owned enterprises.
Regulations on corporate bonds needed to be revised to create more favourable conditions for State-owned enterprises to raise capital without relying on State budget resources, while hastened equitisation of these firms would also enhace their ability to raise capital, Khanh said.
"We need to keep the State budget deficit at less than 4.8 per cent of GDP," he added.
Among local governments, HCM City was facing a budget shortfall of VND4 trillion ($190.4 million) while several provinces were under water by VND1-3 trillion ($47.6-142.8 million). Overspending by local governments this year was projected to totall VND20-25 trillion ($952 million to $1.2 billion). — VNS