According to the FBC, revenue increases are mainly being witnessed in local budgets while the central budget is likely to see a shortfall in revenues, adding that it could be the third consecutive year that the country fails to meet its revenue target.
The Committee expressed its concerns that domestic revenues are estimated to increase by a mere 2.1%, of which contributions by State-owned enterprises has fallen by 7.7%, indicating that Vietnam’s economic recovery remains sluggish and unsustainable.
In addition, tax arrears remain significant, at approximately VND74 trillion (US$3.256 billion) as of September 30, despite aggressive efforts to expedite tax payments.
The FBC stated that the government’s projected revenue increase at 6.4% in 2018 is low but consistent with the economic growth forecast, helping to reduce the risks in the event of Vietnam not meeting the revenue target due to adverse factors.
The Finance Ministry put the spending deficit for 2018 at 3.7% of GDP, a rise of 0.2 percentage points from 2017, which, the FBC said, requires clarification as to whether or not such a high deficit would affect long-term targets.
Several National Assembly deputies suggested reducing the shortfall to 3.5%, calling on the government to cut recurrent expenditure and unnecessary investments and strive to recover the aforementioned tax arrears.
According to the FBC, Vietnam’s public debt by the end of 2018 is projected to remain below the threshold of 65% of GDP but growing debt reflects a sombre picture on the national budget.