Flexible fiscal policy to stabilize the macro economy

Expansionary fiscal policy with tax and fee solutions contributes to stabilizing the macro-economy, helping businesses recover and survive after COVID-19. Photo: Hai Nguyen.

Relax the people

As manager of the Mega Market supermarket chain and Director of the Northern region, Mr. Nguyen Anh Phuong witnessed the clear benefits from the policy of reducing value added tax by 2% (VAT).

When the Government agreed to extend this tax reduction policy until mid-2024, Mr. Phuong was very excited, because "when customers benefit, we also benefit" - Mr. Phuong said.

In fact, after the COVID-19 pandemic, people's purchasing power decreased, but Mr. Phuong personally noticed that purchasing power gradually improved since the policy of reducing VAT by 2%.

Mega Market supermarket serves both professional customers such as hotels, restaurants, canteens and direct consumers, so with this support policy, "everyone benefits".

"With the VAT reduction policy, supermarkets can also confidently maintain price levels, helping to maintain stable services and especially retain customers," said Mr. Phuong.

Looking back at the period from 2021 to present, the consistent ideology in applying the fiscal policy of the Ministry of Finance has always been to be flexible and reasonably expanded to create favorable conditions for the recovery and development of production and business activities of enterprises.

In an interview with the Financial Times (the mouthpiece of the Ministry of Finance) in May 2024, Minister of Finance Ho Duc Phoc said: "We believe that tax support, revenue generation, and tax exemption are essential, but at the same time, focusing on perfecting legal policies, freeing up resources, and removing difficulties in capital, markets, and legality... for business development is extremely important and is a solid foundation for sustainable development."

Minister Ho Duc Phoc has directed the task of collecting and spending the state budget resolutely. Photo: HAI NGUYEN

Accordingly, policies on tax exemption, reduction, and deferral, reduction of registration fees, late payment of land rent, expansion of budget deficit, and increase of social security support have been applied quite a lot to restore the economy after the shock of the pandemic.

It can be said that fiscal policy has performed well its role and mission as a tool for macroeconomic adjustment of the State in the period of economic recovery and development after the pandemic.

Efforts of the Ministry of Finance

Since the COVID-19 pandemic, under the direction and administration of the Government, the Ministry of Finance has issued and submitted to competent authorities for promulgation many important mechanisms and policies to implement fiscal policies to remove difficulties for businesses.

Results of implementing the expansionary fiscal policy through exemption, reduction, and extension of taxes, fees, charges, land rents, and land use fees to support people and businesses, with an amount of about 700,000 billion VND.

Not only reducing VAT, the Ministry of Finance has sent a dispatch to the Prime Minister to allow the development of a decree to extend the deadline for paying VAT, corporate income tax (CIT), personal income tax (PIT) and land rent in 2024; a decree to extend the deadline for paying special consumption tax (SCT) on domestically produced or assembled cars according to simplified procedures, so that the policy can soon come into effect.

The Ministry of Finance has issued many Circulars on building estimates and managing the annual State budget for the period 2022 - 2024; advising and proposing tasks and solutions on finance - State budget to complete the tasks in the Resolutions of the Government and Resolutions of the National Assembly.

Monitoring the implementation process shows that the Ministry of Finance has closely followed the situation, proactively monitored, synthesized data, and reported on the assessment of the implementation of state budget revenue and expenditure; submitted to competent authorities to supplement resources for salary reform according to Resolution No. 27-NQ/TW of the Central Executive Committee on salary reform from July 1, 2024; issued solutions to practice thrift, combat waste, cut regular expenditures, and other budget expenditures to ensure state budget balance and allocate more state budget resources to support people in difficulty.

Minister Ho Duc Phoc said, "More than half of the term has passed, the country has overcome many storms and challenges and is ready to enter a new stage of development."

The efforts of the Ministry of Finance in advising, formulating and implementing fiscal policies have been helping the economy overcome difficulties. Production and business activities and economic growth have recovered well.

In 2021, although GDP is estimated to increase by only 2.58% over the same period last year, it cannot be denied that the serious impact of the COVID-19 pandemic is still gradually penetrating all sectors of the economy. In the context of both closely preventing the pandemic and maintaining production and business activities, this result is considered a great success.

By 2022, we have achieved impressive results when after 36 years of innovation, Vietnam's GDP reached about 406.45 billion USD, an increase of about 50 times. Notably, in the period 1986 - 2022, Vietnam was in the top 5 countries with the largest economic growth in the world.

By 2023, our country's economy will continue to recover and grow, with a GDP of 430 billion USD, growing 5.05%, 1.5 times higher than the global economic growth rate of 2.9%.

In 2024, Vietnam has gone more than half way in the context of the world economy gradually recovering but unstable, facing many risks and uncertainties. Vietnam's GDP growth reached 6.42% (by the end of the second quarter of 2024) - this is a quite high growth rate.

Source: https://laodong.vn/kinh-doanh/linh-hoat-chinh-sach-tai-khoa-de-on-dinh-kinh-te-vi-mo-1382363.ldo