PUBLISHED REPORT
The State budget Final Accounts for 2020
The State budget plan for 2020 was decided by the National Assembly with the total revenue of VND 1,512,300 billion and total expenditure of VND 1,747,100 billion; State budget deficit was VND 234.8 trillion, equivalent to 3.44% of GDP, of which central budget deficit was VND 217,800 billion and sub-national budget deficit was VND 17,000 billion.
In 2020, Covid-19 epidemic erupted on a global scale, adversely affecting all socio-economic aspects of countries around the world. Domestically, Covid-19 epidemic was complicated and unpredictable, leading to many localities having to implement social distance measures in Quarter II and III, traffic and tourism were stagnant; import and export activities were strongly affected by the disruption of international trade chain, thus slowing growth in many fields. Unemployment and underemployment rate increased, life of a part of workers faced difficulties. At the same time, drought, saltwater intrusion, rain and floods affected productivity, crop output and the people's lives.
At the 10th session, the XIV National Assembly decided to supplement 2020 state budget estimate1, in which supplement to revenue estimate was VND 26,753 billion and supplement to expenditure estimate was VND 26,666 billion, and at the same time, allowed to maximize central budget deficit by VND 133,500 billion to ensure the balance of state budget in 2020. Accordingly, state budget revenue estimate (adjusted) in 2020 is VND 1,539,053 billion; state budget expenditure estimate (adjusted) in 2020 is VND 1,773,766 billion.
Under the leadership of the Party, the supervision of the National Assembly and the drastic direction and administration of the Government and the Prime Minister; the whole political system, business community and people have joined effort to synchronously and proactively respond to natural disasters and epidemics, ensuring the good performance of the dual tasks of "disease prevention and recovery and development of socio-economic activities, ensuring the people's lives". As a result, the socio-economic development tasks in 2020 still achieved positive results, with 10/12 of the targets attained or exceeded. Economic growth rate (GDP) reached 2.91%, although lower than the plan (6.8%), it was still among the highest positive growth countries in the world. Macro-economy remained stable, inflation was controlled at 2.31%, reaching the target set by the National Assembly (below 4%); basic major balances were guaranteed; the national credit rating was improved, social order and safety were maintained; policies on social security, social welfare and protection people's health are well taken care of. The aforementioned results have affected the state budget revenue and expenditure in 2020 as follows:
1. State Budget Revenue Outturn
The state budget revenue outturn reached VND 1,510,579 billion, a decline of VND 28,474 billion (-1.9%) compared to the target, mainly due to a decrease in revenues from import and export activities. Breakdowns are as follows:
a) Domestic revenue: the actual outturn was VND 1,293,728 billion, an increase of VND 2,951 billion (+0.2%) compared to the target, mainly from revenue from housing and land (VND 87,970 billion), revenue from lottery activities (VND 5,226 billion) and other budget revenues (VND 22,229 billion); the proportion of domestic revenue reached 85.6% of total state budget revenue, an increase compared to previous years2. Since the end of Quarter III in 2020, thanks to good control of the epidemic and supporting policies for businesses and the people to cope with Covid-19 epidemic, the economy has recovered quite well, thus having a positive impact on state budget revenue; however, due to the great influence of the epidemic and during the year, many solutions were implemented to exempt, reduce, and extend taxes and state budget revenues to remove difficulties for businesses and people affected by the epidemic, there were 8/12 revenues that did not meet the estimate, of which the budget revenue from 3 economic sectors did not meet the estimate (budget revenue from state-owned enterprise sector reached 83.3%; from foreign-invested enterprise sector reached 91.4%; from non-state economic sector reached 91.2% of the estimate).
b) Oil Revenue: the actual outturn was VND 34,598 billion, a decline of 1.7% (VND 602 billion) compared to the target because the average payment price of crude oil was US$45.7/barrel, down US$14.3/barrel compared to the estimated price (US$60/barrel); payment output reached 9.56 million tons, an increase of 540 thousand tons compared to the estimate.
c) Net revenue from trade activities: the actual outturn was VND 177,444 billion, a decline of 14.7% (VND 30,556 billion) compared to the target. In 2020, although the total import and export turnover reached US$545.4 billion, an increase of 5.35% compared to 2019, the import and export turnover of taxable goods decreased by 12.9% compared to the estimate (some imported products with large revenue decreased sharply such as complete cars, iron and steel, machinery, equipment, tools and spare parts, chemicals, etc.), resulting in reduction of budget revenue in this field compared to the target.
Refund amount of value-added tax actually incurred was VND 137,019 billion, an increase of VND 7,019 billion compared to the target. VAT refund was strictly controlled, ensuring compliance with the provisions of the law, the right subject and the actual amount incurred, without causing difficulties or troubles for businesses; at the same time, promoting the application of information technology in tax refund management, combined with strengthening inspection and examination after tax refund, promptly detecting and handling violations.
d) Grants: the actual outturn was VND 4,808 billion, a decline of VND 268 billion compared to the target.
In addition, implementing the guidelines of the Party, Resolutions of the National Assembly, Standing Committee of the National Assembly3, in 2020, the Government has exempted and reduced tax obligations and some budget revenues, thereby helping businesses, household businesses and the people overcome difficulties, maintain production and business activities and gradually adapt to the new normal, which is highly appreciated by the public. Accordingly, the total amount of taxes, fees and land rents exempted or reduced was VND 16,307 billion; the amount enjoying extension of deadline for payment of VAT, CIT, excise tax and land rent was VND 97,259 billion.
2. State Budget Expenditure Outturn
Implementing the Resolution of the National Assembly, the Government directed the synchronous and drastic implementation of many solutions to proactively manage and implement state budget expenditure in 2020, ensuring strict compliance with policies and regimes, strengthening financial discipline and improving the efficiency of state budget use. Accordingly, the results of state budget expenditure are as follows:
The actual outturn of state budget expenditure was VND 1,709,524 billion, a decline of VND 64,242 billion, equal to 96.4% of the target. Ministries, central and local agencies implemented budget expenditure in accordance with assigned targets and estimates; reviewed and drastically cut down on unnecessary recurrent expenditures and expenditures with delayed implementation; focused resources on spending for Covid-19 prevention and control and supporting people affected by the epidemic. In addition, a number of state budget expenditure tasks in 2020 were lower than the budget target or were not implemented, and thus the relevant estimates were canceled according to regulations. Accordingly, the actual outturn of state budget expenditure was lower than the estimate.
The actual outturn of state budget expenditure by main expenditure items is as follows:
a) Investment and development expenditure: The actual outturn was VND 576,432 billion, reaching 115.5% of the target, an increase of VND 77,161 billion.
b) Interest payment expenditure: The actual outturn was VND 106,466 billion, equal to 90.1% of the target, mainly because management closely followed the disbursement progress of investment capital to issue government bonds, thereby reducing the actual amount mobilized during the year, combined with lower-than-expected issuance interest rates, thus reducing borrowing costs for the budget.
c) Recurrent expenditure (including expenditures earmarked for salary reform): the actual outturn was VND 1,013,449 billion, equal to 90.8% of the target.
In 2020, the state budget spent VND 21,685 billion for epidemic prevention and control and supporting people affected by Covid-19 epidemic, contributing to effective control of the epidemic and ensuring social security.
In general, in 2020, the management of state budget expenditure was carried out proactively and closely following the assigned budget targets; financial discipline was strengthened, efficiency in using state budget was improved. Important political tasks were ensured, meeting the socio-economic development requirements of the country and each locality, more resources were available to promptly fulfill important and urgent tasks arising in terms of investment in socio-economic infrastructure, overcoming consequences of natural disasters and epidemics, ensuring social security, national defense and security.
3. State budget deficit
The actual outturn of state budget deficit was VND 216,406 billion, a decline of VND 18,394 billion compared to the target at the beginning of the year, equal to 3.44% of realized GDP4, much lower than the level of deficit allowed to be adjusted by the National Assembly pursuant to Resolution No. 128/2020/QH14 (5.41% of the planned GDP5); in which central budget deficit was VND 213,089 billion, down VND 4,711 billion compared to the target, sub-national budget deficit was VND 3,317 billion, down VND 13,683 billion compared to the target.
4. Total public debts
The total amount of borrowing of the state budget decided by the National Assembly is VND 488,921 billion; the actual outturn was VND 436,060 billion, a decline of VND 52,861 billion, equal to 89.2% of the target.
Accordingly, as of December 31, 2020, the total amount of public debts was VND 3,520,601 billion, equal to 55.94% of GDP, within the limit allowed by the National Assembly of not exceeding 65% of GDP.
1Resolution No. 128/2020/QH14 dated November 12, 2020 on State budget estimate for 2021.
2 The proportion of domestic revenue to total state budget revenue in 2016, 2017, 2018, 2019 was 80%, 80.3%, 80.7%, 82.2% respectively.
3Resolution No. 116/2020/QH14 dated June 19, 2020 of the National Assembly, Resolution No. 954/2020/UBTVQH14 dated June 2, 2020 and Resolution No. 979/2020/UBTVQH14 dated July 27, 2020 of the National Assembly Standing Committee.
4 Realized GDP in 2020 which has not been reassessed in terms of scale is VND 6,293,145 billion.
5 Planned GDP is VND 6,800,000 billion.
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