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| Revenue from business activities is a core revenue in the budget estimate. Photo: ST |
Avoiding risks in case of failing to reach the revenue estimates, affecting spending tasks
On November 11, the National Assembly approved the Resolution on the state budget estimate for 2023 in the 4th session of the 15th National Assembly. Under the resolution, the National Assembly approved that the total state budget revenue in 2023 is VND1,620,744 billion; total state budget expenditure is VND2,076,244 billion; the state budget deficit is VND455,500 billion or 4.42% of the gross domestic product (GDP), of which the central budget deficit is VND430,500 billion or 4.18% of GDP and the local budget deficit is VND 25,000 billion or 0.24% of GDP; the total loan amount of the State budget is VND648,213 billion.
In addition, the National Assembly also decided to adjust the 2022 budget estimate and the medium-term public investment plan for the 2021-2025 period.
Assessing the State budget estimate for 2023, at the recent workshop “Budget Estimate 2023: Prospects and Challenges”, some said that the revenue growth estimate was so cautious in the current macro context.
According to Assoc. Prof, Dr. Vu Sy Cuong, Academy of Finance, the estimate was so cautious compared with the average revenue in recent years. According to Cuong, the state budget revenue estimate is low, according to the principle of finance of “considering revenue to implement spending”, the spending should be considered more carefully, meanwhile fiscal consideration is very important. Monetary policy has not much room left, fiscal policy needs to show its role more not only for socioeconomic development but also for social security.
According to Assoc.Prof.Dr. Nguyen Duc Thanh, Director of the Vietnam Center for Economic and Strategic Studies (VESS), a number of important indicators such as budget revenue need to be estimated in accordance with the reality of the current economy.
In addition, it is necessary to carefully assess the impact of the existing macro risks on the state budget collection and spending in 2023 and the following years, and propose solutions when these risks arise.
Regarding this issue, Chairman of the National Assembly’s Legal Committee, Hoang Thanh Tung said some people think that the 2023 state budget estimate is only equivalent to the estimate of 2022 (only up about 0.4%), which is not suitable for the potential, especially in the context that GDP growth in 2023 is expected at about 6.5%, inflation is about 4%. Thus, he proposed a higher estimate for 2023 to have more resources to implement wage reform, and reduce the state budget deficit.
Explaining this issue, the National Assembly Standing Committee said that the socio-economic context in the country and in the world still has many potential risk factors such as unpredictable fluctuations in oil prices, the cooling down of the real estate market in recent months, to ensure national financial security and safety, avoid risks in case of failing to reach the revenue estimates, affecting spending tasks, and ensuring timely allocation of the 2023 estimate, and avoiding excessive disturbance of the revenue estimates of localities, the National Assembly Standing Committee reported to the National Assembly on permission to keep the plan submitted by the Government.
If the central budget revenue in 2023 exceeds the estimate, the Government is requested to report to the National Assembly Standing Committee to allocate resources to conduct wage reform and give priority to reducing the budget deficit.
Sustainable revenues for the budget
The representative of the State Budget Department under the Ministry of Finance said that in the budget revenue, there are core revenues, even if there are fluctuations in the economy, those revenues will still be remitted to the State budget and their growth shows the sustainability of the budget, this is the revenue growth from production and business activities.
In addition, there are one-time revenues, such as land use levies, enterprises pay one-time land rent for 30 years. Or the revenue from the transfer of assets between investors, enterprises only make payments in the years of the transfer. With revenues from land, the revenue from the land to the State budget will be high if there are big projects in the year, but because land is a finite resource, the local revenue from land may very high in this term but it will be more difficult in the next term.
“This revenue is not estimated and is an extraordinary revenue. When calculating the budget, we have to exclude these extraordinary revenues, and only consider core revenues. Of course, it must be emphasized, there is nothing extraordinary in the whole economy, revenues from land are paid by investors to the state budget every year, but for a specific local unit, it is unable to calculate any specific investors or projects. However, the local unit can still forecast revenue, but it is not possible to calculate how much revenue will be,” the representative of the Ministry of Finance said.
Regarding budget spending, the budget estimate has shown a tendency to change the spending structure in a more appropriate direction (reducing recurrent spending). However, some said that the spending structure has a great change with a sharp increase in investment spending (accounting for 35% of total state budget expenditure in 2023, up 38% compared to the 2022 estimate) but the solution for disbursement is not specific. If disbursement continues to be as slow as in recent years, it will affect economic growth, liquidity of capital and money markets. According to Assoc. Prof, Dr. Vu Sy Cuong, public investment disbursement as planned is always a challenge in state budget spending. With the spending amount for the public investment accounting for 35% of total State budget expenditure in 2023, the disbursement in 2023 will be a great challenge.
According to the representative of the Ministry of Finance, 35% of budget expenditure is for development investment, this figure will determine the economic growth in 2023. In 2022, disbursement is slow because of the size of capital, specifically public investment plan capital in 2022 is much higher than in 2021, so the disbursement rate so far accounts for more than 50% of the estimate, but rises by 6-7% over last year. Furthermore, the fluctuations in gasoline prices, scarcity of raw materials and the simultaneous implementation of large projects also affect the project implementation of investors.
However, the representative of the Ministry of Finance emphasized that by 2023, shortcomings in public investment disbursement will be actively removed to accelerate the disbursement.