Reducing taxes necessary to stimulate the economy: Minister of Finance

February 23, 2024 - 05:34
Minister of Finance Hồ Đức Phớc talked with the Pháp Luật TP.HCM (HCMC Law Newspaper) on the upcoming tax policies and outlook for the new year.
Minister of Finance Hồ Đức Phớc. VNA/VNS Photo Hữu Thọ

HCM CITY In 2023, the finance sector overcame challenges and improved Việt Nam's power in the global economic landscape. Minister of Finance Hồ Đức Phớc talked to the Pháp Luật TP.HCM (HCMC Law newspaper) on the upcoming tax policies and outlook for the new year.

In 2024, alongside opportunities and favourable conditions, our economy is also expected to face difficulties and challenges from both domestic and global perspectives. What do you reckon are the challenges and obstacles for the finance sector in the coming year?

In 2024, the global situation will continue to adversely affect domestic economic growth, especially the production and business activities of enterprises and import-export activities. Therefore, the Government has directed various measures in financial and State budget management. We are determined to implement comprehensive and coordinated fiscal policies in conjunction with effective monetary policies.

This means we need to continue solving the problem of implementing reasonable expansionary fiscal policies to both boost the economy and ensure stable macroeconomic conditions, control inflation and safeguard the nation's financial stability.

The Ministry of Finance has studied and proposed to related authorities to continue implementing policies of tax exemptions, reductions and deferrals. However, the extent of relaxation will be calculated carefully, tightly, reasonably, and in appropriate amounts in the short term, to achieve the aforementioned multiple objectives.

Furthermore, with the environmental tax reduction policy for gasoline, oil and lubricants until the end of the year, the expected reduction in State budget revenue is around VNĐ42.5 trillion (US$1.73 billion).

Will this contribute to extending the successes of 2023 for the finance sector?

We believe and expect so because the resolute leadership and management by competent authorities have been consistent, continuous and effective up to this point.

I believe that challenges and difficulties still exist, but opportunities and favourable conditions always accompany them. The finance sector will exert the highest determination to best fulfil the assigned tasks, especially in areas such as the stock market, insurance, financial budget, customs, anti-smuggling, and financial system improvement.

In addition, in 2024, we have allocated sufficient resources to implement comprehensive salary policy reforms. With the foundation accumulated in previous years, I expect these measures will contribute to the early recovery and restoration of rapid, stable economic growth.

One crucial area of management for the Ministry of Finance is the stable, healthy and sustainable development of financial markets, especially the stock market, corporate bond market and insurance market, which have undergone significant fluctuations.

Financial markets have faced many impacts from both objective and subjective factors, from the macroeconomic situation both domestically and internationally. These impacts have led to volatility in the stock market, challenges for individual corporate bond markets, and difficulties in the insurance market.

However, under the resolute guidance and management of the Government, the coordination of relevant ministries and agencies, and timely and appropriate solutions from regulatory bodies, combined with the efforts of enterprises, the consensus of investors, and the public, financial markets have continued to be strengthened and their obstacles timely addressed. This has led to further development, transparency and sustainability.

We have also proposed various measures to inspect, control, audit, improve the legal framework, and promote transparency, such as establishing a separate trading floor for corporate bonds.

Despite facing unpredictable factors, with the established foundation, the implemented solutions, and the proactive involvement of regulatory bodies at all levels, financial markets will continue to make positive strides in quality and sustainability.

In 2023, Việt Nam's foreign affairs were evaluated as having "achieved important, historically meaningful accomplishments, shining brightly in the overall achievements of the nation". What is your opinion on this evaluation?

The evaluation was correct. In 2023, we witnessed the continued strong promotion of economic diplomacy based on the profound implementation of the 13th Party Congress's direction on "building economic diplomacy to serve development, with people, localities and businesses at the centre". The Government also assessed that economic diplomacy in recent times has had new and comprehensive developments in terms of substance and effectiveness.

High-level foreign affairs, especially economic diplomacy, over the past year has helped expand and deepen economic cooperation with many partners. This has contributed to ensuring macroeconomic stability, major balances and promoting economic growth. Simultaneously, it has boosted import-export activities and attracted many new sources of capital, including foreign direct investment (FDI), foreign indirect investment (FII), non-refundable aid (ODA), science and technology.

What plans does the finance sector have to turn opportunities into practical results after the overall success in economic diplomacy recently?

For the finance sector, we have always prioritised this work in recent years. Especially in 2023, the Ministry of Finance undertook many practical activities to seize the opportunity of a "brilliantly successful" year for the country's economic diplomacy.

Over time, we have achieved many successes through indicators such as the national public debt, and government debt, which decreased from 43.1 per cent in 2021 to 37 per cent in 2023. Indirect investment promotion programmes abroad have been implemented since 2014. Alongside this, investment promotion programmes have played a significant role in promoting the potential of the overall economy and the Vietnamese stock market to the international investment community. This helps attract long-term, low-interest-rate financial resources for economic development.

In 2024, based on the experience and positive results achieved in previous years, the Ministry of Finance will continue to build indirect investment promotion programmes abroad to further promote and attract a stronger flow of foreign capital into the Vietnamese stock market. Alongside this is strengthening connections, building and consolidating cooperation with market regulatory agencies, financial institutions, and major investors worldwide.

In March, we plan to organise an investment promotion programme in South Korea and Japan. VNS