Global oil crash exerts little impact on Vietnam’s budget revenue
In this year's state budget plan, revenue from crude oil is predicted at VND35.2 trillion (US$1.5 billion), accounting for 2.3% of the total.
As revenue from crude oil only accounts for 3% of Vietnam's state budget collection, a sharp decline in global oil prices has little effect on the country’s revenue, according to Vo Thanh Hung, director general of the State Budget Department under the Ministry of Finance (MoF).
|Vo Thanh Hung, director general of the State Budget Department under the Ministry of Finance (MoF). Source: MoF.|
However, as the state budget plan is based on oil prices projected at US$60 per barrel, a plunge in oil prices would no doubt negatively affect budget revenue, said Hung.
According to the official Hung, there has been a significant change in Vietnam’s structure of budget revenue. While revenue from crude oil accounted for 13% of total budget revenue in the 2011 – 2015 period, the rate fell to 4% in 2016 – 2018 and 3.2% in 2019.
In the budget plan for 2020, revenue from crude oil is predicted at VND35.2 trillion (US$1.5 billion), accounting for 2.3% of the total and down VND11.6 trillion (US$493.56 million) from the actual revenue in 2019.
Taking into account a broad picture when the state budget is expected to take a blow from the Covid-19 pandemic, Hung said the situation requires measures to mitigate potential losses.
For the oil and gas industry, oil producers still have long-term contracts in the upcoming six or seven months, so short-term fluctuations of oil prices would have little to no impact.
In fact, Vietnam is a net oil importer, therefore, lower oil prices would be a beneficial for the economy and relieve pressure on the business community, Hung said. The MoF would continue to monitor the situation to assess its impacts on the economy, he added.
In the future, the MoF would increase the share of domestic revenue in total budget revenue, which could go up to 84% in 2020 from 68.7% in the 2011 – 2015 period, Hung added.
The MoF is committed to keeping a steady stream of revenue, which could be realized by improving the business environment and reforming administrative procedures, timely addressing concerns of people and enterprises, Hung stressed.
- Vn-Index set to hover around 1,350-mark this week
- Banks foregone over $1 billion in profit to support businesses during Covid-19 outbreaks
- Vn-Index set to maintain positive trend to reach 1,380 this week
- Vietnam to prioritize 2022 expenditure budget for raising basic salaries
- Vn-Index set for upward trend from September 13-17
- HSBC deploys first green deposit for businesses in Vietnam
- Vietnam c.bank agrees for banks to extend debt rescheduling for 6 months
- Over $827 million allocated to Covid-19 fight in 8 months
- Standard Chartered and Britcham to support Vietnam's sustainable development
- Vn-Index to fluctuate around 1,340-1,350 on September 6-10
Covid-hit orphans in Vietnam: stakeholders seek optimum solutions
Vietnam to gradually reopen tourism
Domestic automakers expected to enjoy excise tax payment extension
WB downgrades Vietnam's economic growth forecast due to Covid-19 outbreak
Today’s Covid News: Germany donates 2.6 million vaccine doses to Vietnam
Vietnam successfully produces first batch of Russian Covid-19 vaccine
Hanoi seeks further support from Russia in vaccine supplies
Aerial view of traditional soya sauce wins International Photo Award
The winning artworks of “Ha Noi is…” Illustration Contest announced