Vietnam's Deputy Minister of Finance Do Hoang Anh Tuan has pointed out six major challenges that Vietnam is facing in restructuring national finance, the government portal reported.
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Firstly , Tuan addressed the lack of sustainable income for state budget, despite domestic revenue accounting for 82% of total collection. In fact, a large part of revenue, especially from many provinces relies heavily on the sale of public assets and land-use rights. Meanwhile, transfer pricing, tax evasion and trade fraud remain huge risks to the economy.
In 2017, Vietnam's tax authority issued Decree No.20 guiding tax compliance for enterprises having related party transactions, which resulted in greater efficiency in domestic and foreign taxpayers management through an additional revenue of US$300 million and reduction of US$2.2 billion in corporate losses, Tuan stated.
Secondly, the efficient use of public finance and state budget left much to be desired.
Thirdly, it is vital to increase efficiency in corporate governance and state capital management in state-owned enterprises.
Fourthly, although the state of the public debt has been improved, contingent debts, potential risks for the exchange rate, government guaranteed-debts pose major challenges in the coming time.
Over the last eight months, 10-year government bonds have been were auctioned with an annual yield rate of 4.12%, however, enterprises have to seek mid- and long-term loans at commercial banks with the lending rate of 9.6% per annum, Tuan added.
Fifthly, there should be a legal framework to tackle the cost of capital for corporate sector, one of the biggest challenge to the economy.
Sixthly, disciplined and transparent in the use of finance and state budget are needed.
Tuan expected to learn from international experiences in institutional reform and solving challenges related to national finance restructuring.
Mission Director for USAID Vietnam Michael Greene stated Vietnam's economic strong growth is a solid foundation for the restructuring process.
According to Greene, USAID will continue supporting Vietnam in the process of financial institution reform towards rapid and sustainable economic growth, in turn promoting national self-reliance.
Bruno Angelet, head of the European Union (EU) delegation to Vietnam, considered the reform an important issue. Vietnam has to provide equal financial services through efficient financial management and higher revenue collection.
The EU want to support Vietnam in addressing climate change, environmental pollution, tax and financial management towards green economy, Angelet added.
Dang Van Thanh, chairman of the Vietnam Association of Accountants and Auditors, said financial and tax policies must focus on long-term development goals and reduce the financial burden on enterprises, creating incentives for growth and expanding the income sources for state budget.
Economist Vu Dinh Anh stressed that the financial restructuring process must be closely related to the objective of sustainable poverty reduction.
Vietnam has been paying more attention to sustainable development and environmental protection, which are also one of the objectives of the 14th Asian Organization of Supreme Audit Institutions (the 14th ASOSAI Assembly) currently being held in Vietnam, Anh said.
