Construction is underway at the An Suong Underpass, a crucial infrastructure project for HCM City, the southern economic hub. — VNA Photo
Viet Nam's budget collection has seen a sharp fall during the first six months of 2020 at just 44.2 per cent of projected income, a 10.5 per cent drop compared to the same period last year, said the Ministry of Finance in an online meeting with Prime Minister Nguyen Xuan Phuc in Ha Noi on Tuesday.
Contributing factors included falling revenue from crude oil, which barely reach 60 per cent of projected income.
Budget collection from domestic firms also fell by 7 per cent. The hardest-hit came from State-owned firms which saw a drop of 21.5 per cent compared to the same period last year, followed by the private sector and FDI with 15 per cent and 6.3 per cent respectively.
This, according to the finance ministry, was an accurate reflection of the hardship faced by the economy due to the disruption caused by COVID-19.
Measures have been taken to provide firms with support. By the end of June, Viet Nam's tax authorities processed nearly 150,000 tax and land-use fee relief applications extending an amount of VND43 trillion (US$1.85 billion) in credit for firms and business households.
During the first half of 2020, the State spent over VND15.3 trillion on COVID-19 prevention activities (VND4.1 trillion) and in support for affected 11 million households (VND11.3 trillion).
Investment accounted for 33.1 per cent of total budget spending with borrowing cost and normal expenditure accounted for 50.3 per cent and 48.2 per cent respectively.
Despite experiencing setbacks, Viet Nam's stock market has yet to see any significant capital outflows. The market has remained stable and on its track to recover strongly as COVID-19 was put under control, showing investors' confidence in the country's long-term growth potential.
On administrative reform, the ministry have removed 28 procedures with 560 others have been made available online. Most firms (99.6 per cent) have started to use electronic tax forms.
Speaking at the meeting, PM Phuc said the ministry must stay proactive in their approaches to balance the State's budget while, at the same time, create momentum for the economy to recover and achieve sustainable growth.
"We must stand behind and support new business models, new materials, new energies and new drives for economic growth," said he.
The leader ordered government agencies to increase effort to improve transparency, reduce risk and combat illegal economic activities and violations. He insisted on the importance of keeping inflation under 4 per cent this year, in line with a recent National Assembly's decision.
In addition, the PM urged the finance ministry to help speed up the disbursement of public investment capital, saying the country's objective was to spend up to $30 billion in 2020.
He asked the Ministry of Finance and the Ministry of Planning and Investment to hold regular meetings to identify bottlenecks and difficulties in the disbursement process. He also called for the forming of central government task forces to inspect slow-moving projects across the country under the direct supervision of the ministers. Localities and ministries failed to keep up the pace by August will risk losing their investment to others. — VNS