Cooling production burns state coffers

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Just VND55,490 billion ($264 million) was paid to state coffers during last month, dropping VND3,450 billion ($164 million) against 2012’s first four months’ average level, according to the Ministry of Finance (MoF).

Total contributions to the state amounted to VND291,253 billion ($13.8 billion) in the first five months of 2012, tantamount to 39.3 per cent of  the projection, surging 3 per cent on-year - the lowest year-on-year growth in the past couple of years.

Meanwhile, budget spending came to VND73,945 billion ($352 million) in May, bringing total budget spending to VND338,021 billion ($16.1 billion) in the first five months of 2012, equal to 37.4 per cent of the projection and a 10.8 per cent jump on-year.

This contributed to driving up budget overspending during January-May to VND46,768 billion ($222 million) with VND18,455 billion ($87.8 million) in May alone which was 2.6 fold more than first four month average overspending.

The MoF attributed the shortfall to dragging economic vulnerabilities, implications of state policies on tax reduction, exemption and extension to help firms weather the storm and support market in the spirit of Resolution 13/NQ-CP, import duty cuts to match international commitments and a sharp fall in the import value.

Besides, a General Department of Customs report showed that Vietnam’s January-May total export-import value was an estimated $86.3 billion, hiking 14.6 per cent against 2011’s same period ($11.02 billion more). Of this, exports amounted to $42.8 billion and import $43.4 billion, resulting in a $620 million trade deficit.

Falling exports of crude oil, coal and sinking import of petroleum products, automobile and spare parts hurt customs’ budget revenue in the first five months of 2012 which shed 10 per cent on-year (VND8,656 billion or $412 million less), reaching VND77,800 billion ($3.7 billion), tantamount to 34.7 per cent of the projection.

National Assembly’s Economic Committee official Tran Du Lich said: “Thereby, besides tax exemption, reduction and extension pursuant to Resolution 13, more incentives need to be in place to fuel production, paving the way for fulfilling budget revenue targets in remaining months of 2012.”

On June 12, the MoF will submit to the National Assembly a draft resolution on tax measures to assist firms and individuals in 2012, including 30 per cent corporate income tax reduction proposal to small- and medium-sized and labour intensive firms in some areas.

Lich viewed these measures as necessary, but not sufficient.

National Financial Supervisory Commission chairman Vu Viet Ngoan assumed boosting domestic production through supporting firms to withstand current tough period was one of factors to ensure budget revenue.

“Apart from delaying and easing tax obligations of firms, the government should come up with measures to help firms boost sales. Only in doing so, contribution to state coffers will be stable in a sustainable manner,” said Ngoan.