Gov't warned of overspending as revenue collection falls short
HA NOI (VNS)— Experts have warned that Viet Nam faces a serious budget overspend for this financial year if the Government fails to increase revenue collection.
|Experts have warned that Viet Nam faces a serious budget overspend for this financial year if the Government fails to increase revenue collection.—VNS Photo Gia Vi
The latest reports from the General Statistics Office (GSO) put nationwide revenue collection at VND4,185 trillion (US$ 20.5 billion), accounting for 56.5 per cent of the yearly estimate.
Meanwhile spending stood at VND5,340 trillion ($ 26 billion) - accounting for 59.1 per cent of the projected figure for 2012 - meaning VND1,165 trillion was overspent in the first eight months of the year.
Experts say "it is vital the Government redresses the balance" and suggest improved tax collection could be the solution.
Le Quoc Ly, Deputy Director of the Ho Chi Minh National Academy of Politics and Public Administration, said: "We have enacted policies to collect revenues, but we have forgotten a very important element – where do the revenues actually come from?"
"The majority of the national budget is derived from tax collection," leading experts said, also calling for problems such as payment delays, tax losses and wasted spending to be addressed as a mater of urgency.
Another factor is the cumbersome financial mechanism, particularly in the disbursement for projects or construction works, which is seriously affecting the country's economic growth.
In addition, experts say in order to reach the budget target set for 2012, it is imperative that the Government continues efforts to curb inflation, maintain the national macro economy and implement flexible fiscal policies.
According to Do Trong Khanh, director of Ministry of Planning and Investment's Department of Finance and Monetary, the application of a flexible fiscal policy is vital to reduce the overspending, as is close co-ordination between monetary and credit policies.
"It is a must that the overspending must be bellow 4.8 per cent of the gross domestic product (GDP)," Khanh said.
Meanwhile Ly argued that the National Assembly should re-balance the public spending structure and public investment, with a clear objective of using the money efficiently and effectively.
He proposed that enterprises be allowed to issue bonds to raise capital to invest in production expansion.
Experts also agree the government should accelerate the process of turning State owned enterprises into joint stock companies, enabling them to operate more efficiently.
They called on the government to step up administrative reform, claiming that once the policy to nurture revenue sources is in place and enterprises are stable, the balance between revenue collection and spending will be far more manageable. — VNS