Finance ministry urged to focus on removing difficulties for firms

Rice bags loaded for export. As the economy is forecast to continue to struggle in 2024 with slow recovery of production and business, the finance ministry will enhance tax management on digital and e-commerce transactions, and prevent evasion in tax refunds and illegal transactions. — VNA/VNS Photo Vũ Sinh

HÀ NỘI — Deputy Prime Minister Lê Minh Khái asks the Ministry of Finance to effectively implement policies to remove difficulties for enterprises, control inflation, promote socio-economic development and fulfil targets set for 2024.

“Drastic actions must be taken right from the first days of 2024,” Khái said, urging the ministry to focus on improving the policy framework for finance and budget, speeding up the development of digital government, increasing discipline in tax regulation compliance, together with implementing solutions to increase budget revenue, especially from real estate business, e-commerce and cross-border trade,

With the forecast that the Vietnamese economy and enterprises will still face difficulties in 2024, Minister of Finance Hồ Đức Phớc said that the ministry, within the scope of its responsibilities, would focus on removing obstacles for businesses.

The capital market is having problems, he said, pointing out that the total non-performing loans and corporate bonds are estimated at nearly VNĐ1 quadrillion (US$41.3 billion).

“The focus must be on removing difficulties for enterprises. When enterprises recover, they will have resources to pay debts, bonds, social insurance and taxes,” he said.

As the economy is forecast to continue to struggle in 2024 with slow recovery of production and business, the ministry will enhance tax management on digital and e-commerce transactions, and prevent evasion in tax refund and illegal transactions of invoices.

Higher-than-planned budget revenue

The ministry’s report showed that one of the outstanding successes in 2023 is flexibly and timely implementing fiscal policies to aid the economy, remove difficulties for enterprises, stabilise the macroeconomy, control inflation and promote economic growth.

The ministry provides tax and fee exemptions and reductions worth around VNĐ200 trillion in 2023 in the context of economic slowdown. The realized figure was estimated at VNĐ193.4 billion.

Still, budget revenue reached VNĐ1.693 quadrillion as of December 25, 4.5 per cent higher than the plan. This figure is 4.2 per cent lower than 2022.

Budget spending was estimated at VNĐ1.73 quadrillion, 83.4 per cent of the plan.

Budget deficit was estimated at 4 per cent of GDP, a drop of VNĐ40.3 trillion compared to the plan.

Regarding public debt restructuring, outstanding public debts are estimated at 37 per cent of GDP and government debts at 34 per cent of GDP, below the ceilings set by the National Assembly.

Three credit rating agencies, namely S&P, Moody’s and Fitch Ratings, all have a positive outlook for Việt Nam. Specifically, Fitch Ratings upgraded Việt Nam’s long-term national credit rating from BB to BB+ with stable outlook, S&P keeps the rating of BB+ (stable outlook) and Moody’s Ba2 (positive outlook).

The ministry’s report, however, revealed that it was a gloomy year for the corporate bond market and insurance markets.

Statistics showed that there were 78 enterprises issuing bonds in 2023 with a total value of VNĐ235.9 trillion, 27 per cent lower than 2022.

Insurance premium revenue decreased by 8 per cent on economic difficulties and problems in sales consulting, especially bancassurance. — VNS