>> The State Bank of Vietnam closely follows the Fed’s movements
>> Vietnam’s results in controlling inflation are highly appreciated
In recent times, geopolitical conflicts have continued to intensify, fragmenting and negatively affecting the global economy. Additionally, due to climate change, weather conditions in many parts of the world are more severe, exerting negative effects on agricultural production activities, leading to losses and increased risks and insurance costs. In the country, difficulties in the real estate and corporate bond markets persist. Vietnam is one of the countries most affected by the global minimum corporate tax, officially implemented since 1er January 2024.
| Reasonable and flexible tax policies help reduce companies’ production costs and stimulate domestic consumption. |
| Photo . VNA/CVN |
Due to this relatively less optimistic outlook, monetary policy is managed proactively and prudently by the relevant services, thus ensuring little inflationary pressure. At the same time, public investments are accelerating. Temporary tax deferrals, reductions in environmental taxes, those on value added and car registration have positive impacts on households and businesses.
Reduction of taxes and fees
Regarding inflation, international financial organizations such as the International Monetary Fund, the World Bank and the Asian Development Bank predict that in 2024, the inflation rate in Vietnam would be 3-4% this year. They believe that the main constraint to inflation will be pressure on costs. At the same time, demand-pull inflation could arise due to the accelerated disbursement of public investment capital, which would put pressure on construction material prices. If consumer demand were to increase, it would not exert strong pressure on prices.
Economic experts note that in the first months of the year, the government’s drastic leadership in financial and monetary management helped the Vietnamese economy overcome its difficulties and achieve impressive growth despite difficult global economic conditions. According to them, in an unprecedented context, the Ministry of Finance has implemented policies of exemption, extension and reduction of taxes and fees.
Dinh Trong Thinh, former dean of the Department of International Finance at the Academy of Finance, said these policies have been highly appreciated by businesses and individuals.
Dr. Tô Hoài Nam, permanent vice-president and secretary general of the Vietnam Association of Small and Medium Enterprises, points out that the above tax policies have helped to reduce costs for businesses, product prices and boost production. domestic consumption.
According to economist Vu Sy Cuong of the Academy of Finance, “it is necessary to continue fiscal policies to stimulate domestic consumption and increase the number of buyers of social housing.”
For his part, the Minister of Finance, Hô Duc Phoc, affirms that the financial sector will continue to implement reasonable budgetary policies to boost the economy while ensuring macroeconomic stability and inflation control, thus guaranteeing security national financial. And added that his ministry pursues a flexible, effective and targeted budgetary policy, and is determined to support companies to help them overcome their difficulties and quickly resume their production activities. According to him, tax policies aimed at supporting them will be applied in the long term, because they allow them to have more capital to invest in their development, thus helping to promote macroeconomic growth and improve national competitiveness.
| According to the Ministry of Finance, an increase in domestic revenue reflects an economic recovery. |
| Photo: VNA/CVN |
Ensuring major balances
At the end of the first quarter, budget revenues reached 539.5 trillion VND (22.11 billion USD), up 9.8% year-on-year. By the end of the year, the Ministry of Finance will implement a proactive, reasonable, flexible and effective fiscal policy, closely coordinating fiscal policy with other economic policies to maintain macroeconomic fundamentals, control inflation , ensure major balances, promote growth and sustainably develop the economy.
In addition, the ministry will continue to improve the legal framework relating to budget revenues. It will thus propose appropriate tax policy solutions to reduce the difficulties of businesses and citizens, and promote economic growth.
Thê Linh/CVN
