Crafting Compelling Content: Unlocking Government Support for Businesses

Curbing Inflation and Preventing Unreasonable Price Hikes

Despite global challenges in the first half of 2024, Vietnam’s economy has shown an “astonishing” recovery, according to Minister of Finance Ho Duc Phoc.

To further support cost reduction for businesses and citizens in 2024, in line with Resolution No. 44/NQ-CP, the Ministry of Finance has issued a circular reducing fees for approximately 36 items, effective from July 1, 2024, to December 31, 2024. This move is expected to reduce state budget revenue by VND 700 billion.

The Ministry of Finance has submitted to the Government a draft decree amending and supplementing a number of articles of Decree No. 26/2023/ND-CP dated May 31, 2023, on export and import tariffs. The expected impact of this policy adjustment is a reduction in state budget revenue by nearly VND 590 billion per year.

Additionally, the Ministry of Finance proposed extending the reduction of VAT rates until the end of 2024. The Government has submitted to the National Assembly a proposal to continue reducing the VAT rate by 2% from July 1, 2024, to December 31, 2024. This is expected to reduce state budget revenue by approximately VND 24 trillion, bringing the total revenue reduction for the year to about VND 47.5 trillion (including an estimated reduction of VND 23.5 trillion in the first half of the year).

Moving forward, the Minister of Finance emphasized the need to effectively implement tax exemption and reduction policies while closely monitoring the prices of essential goods to curb inflation and prevent unreasonable price increases.

Aiming for 6.5-7% GDP Growth in the Third Quarter

Concluding the meeting, Prime Minister Pham Minh Chinh emphasized the growth target , aiming for a GDP growth rate of 6.5-7% in the third quarter and subsequently determining an appropriate target for the fourth quarter. He also set an inflation target of below 4.5%.

The Prime Minister outlined key tasks and solutions, prioritizing growth promotion while maintaining macroeconomic stability, curbing inflation, and ensuring the major balances of the economy.

He directed the implementation of an expanded and focused fiscal policy, in coordination with a proactive, flexible, timely, and effective monetary policy. This includes the continued adjustment of exchange rates and interest rates, with a focus on reducing lending rates and borrowing costs to support production and business activities. Ensuring sufficient credit supply and improving access to capital are also key priorities.

Tightening financial and state budget discipline, enhancing revenue management, and practicing spending austerity are crucial. The government will continue to implement tax exemptions, reductions, and extensions of payment deadlines.

Simultaneously, strengthening price management and controlling inflation in line with set targets is essential. Ensuring sufficient electricity and fuel supply for production, business, and consumption, with a resolute commitment to preventing power shortages, is a key aspect of this effort.

Regarding public investment disbursement, the Prime Minister instructed the continued activation of five working groups under the Prime Minister and 26 working groups under the Government members. He also emphasized the need to reallocate unallocated investment capital of VND 29.9 trillion, address obstacles in ODA disbursement, and strive for a disbursement rate of over 95% of the plan.

Furthermore, the Government leader requested a focus on institutional and legal improvements, administrative procedure reforms, and the acceleration of national digital transformation. The swift issuance of decrees and circulars to accompany the enforcement of laws is imperative. The establishment of a Steering Committee to address legal obstacles, headed by the Prime Minister and comprising Government members, is also in the works.