HÀ NỘI – Legislators approved a resolution on the five-year financial plan with 86.64 percent of “yes” votes during the ongoing second meeting of the 14th National Assembly yesterday.
The resolution targets total State budget collection for 2016-2020 at about VNĐ6.86 quadrillion (US$308.7 billion), representing a 1.65 fold increase against 2011-2015, with domestic collection expected to account for 84-85 percent of State budget collection.
Accumulated State budget spending in the next five years will be set at more than VNĐ8.02 quadrillion ($361 billlion), of which development expenditures will make up 25-26 per cent and regular expenditures, below 64 per cent.
Combined development spending in the period will be no more than VNĐ2 quadrillion ($90 billion). Of the figure, spending sourced from Government bonds will be VNĐ260 trillion ($11.7 billion), including VNĐ60 trillion ($2.7 billion) left from 2014-2016.
Budget overspending in the next five years will be capped at 3.9 percent of GDP. Of the figure, the ceiling of central budget overspending will be capped at 3.7 percent and local budget overspending at 0.2 percent.
With these measures, budget overspending is expected to drop to no more than 3.5 percent of GDP by 2020, in an effort to balance the State budget and keep public debts within limits.
The resolution also aims to ensure the safety of public debts, which will be no more than 65 per cent of GDP annually. Government debts will not exceed 54 per cent of GDP and foreign debts no more than 50 per cent.
The Government will allocate no more than 25 per cent of annual total budget collection for debt payment.
Under the resolution, State budget collection policy will be adjusted and supplemented towards raising GDP mobilisation to the State budget, higher domestic collection and decreasing income from crude oil, natural resources and exports-imports.
Duties will be reduced in line with free trade agreements which Việt Nam has signed.
State budget spending will be kept within limits between collection and spending. About 20 per cent of the total budget spending is expected to be spent on education and 2 per cent on science-technology.
Basic salary, pensions, and allowances for people who have rendered great services to the nation will increase by about 7 per cent annually.
State budget overspending will be cut and public debts will be restructured towards decreasing foreign debts and increasing local debts. The bond market will be built to limit international bonds and promote five-year Government bonds.
To achieve these goals, the resolution focuses on completing financial institutions and national financial mechanisms. The management of State budget collection and expenditures will be restructured towards an outcome-oriented approach meeting international standards.
The scale and subjects of tax collection policies will be amended to cut down the number of those who receive tax reduction and property tax will be studied for supplementation. The incorporation of social policies into the tax law will be restricted, while tight fiscal and monetary policies will be implemented.
Financing for public agencies will be overhauled, with changes made to public service fees to ensure incomes of these agencies.
Public spending will be restructured to support salary reform. The governance and performance of state-run companies will be improved. And, public debt is also set to be managed within the safe limit, the resolution says.
Source: Vietnam News
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