Choose “VND to buy fish sauce, buy soy sauce”, disburse the package of VND 350,000 billion
If the economy after COVID-19 is considered like a person who has just experienced a severe illness, the support packages are like a tonic to help patients recover their health as well as the economy to regain its growth rate after a period of time. almost freezing many activities…
Right at the beginning of 2022, a Resolution on fiscal and monetary policies to support the Socio-economic Recovery and Development Program, with an “unprecedented” budget package of up to VND 350,000 billion, was disbursed. for the two years 2022 – 2023 was approved by the National Assembly at the first extraordinary session of the XV National Assembly. Immediately after that, the Government issued Resolution 11 as the guideline for this program.
The program of socio-economic recovery and development has basically met the wishes of the business community and people, demonstrating the strong determination of the National Assembly and the Government in bringing our country’s economy to life. soon overcome a period of many difficulties and challenges to firmly step up.
At present, a number of policies have been put into practice, beneficiaries have immediately received support.
As with the 2% VAT reduction (from 10% to 8% for many items), before a basket of goods was worth about 1 million VND, consumers would have to pay VAT of 10%, equivalent to 100,000 VND. But now with a 2% discount, consumers will save 20,000 VND.
It is expected that the 2% reduction of VAT will be equivalent to about VND 50,000 billion in support from the budget, contributing to stimulating consumption and curbing inflation.
“The tax reduction will help businesses import goods cheaper, thereby having a better selling price. Customers will also save more on shopping goods. Thereby stimulating general demand for the whole society,” said the chain owner. HT Mart supermarket (Cau Giay – Hanoi) said.
Along with the reduction of VAT, from December 2021 to the end of May 2022, the registration fee for locally assembled and manufactured cars will be reduced by 50%, according to Decree No. 103 of the Government. Consumers save money buying cars. Sellers also sell more cars.
The 50% reduction in the registration fee for cars caused a shortfall in revenue for the State budget, but because of the increase in vehicle consumption, the total budget revenue for taxes still increased. Typically, in the second half of 2020, revenue from registration fees decreased by more than VND 7,000 billion, but total state budget revenue increased by more than VND 14,000 billion…
“The reduction of taxes and fees has a dual effect on the whole economy. For example, the VAT reduction program, the first side helps people reduce costs when shopping, thereby stimulating consumption demand. Consumption just needs to be done. An increase of 1 percentage point will help GDP increase by about 0.12 percentage points”, said Mr. Can Van Luc – Member of the National Monetary and Financial Policy Advisory Council.
Of the 350,000 billion VND package, the largest part – about one third of the whole package (equivalent to more than 113,000 billion VND from the State budget) will be spent on infrastructure development: traffic, information technology, transportation. Changing numbers, preventing riverbank and coastal erosion… Here, we focus on the following groups: Transport infrastructure (North-South Expressway project phase 2, regional linkage project, backbone axes (axes) horizontal and vertical axis) of the Central region, the Mekong Delta…); Projects of the Agriculture and Rural Development Sector (prevention of riverbank and coastal erosion, natural disaster prevention)…
Regarding the implementation of public investment projects in the Socio-economic Recovery and Development Program, according to Deputy Minister of Planning and Investment Tran Quoc Phuong, in addition to 3 groups of specific solutions approved by the National Assembly. implementation must still comply with current regulations on public investment. Therefore, the implementation takes longer than the credit group as well as the tax and fee policy group.
“To overcome this situation, the National Assembly has allowed the implementation of a flexible mechanism that harmoniously combines the recovery program with the medium-term public investment plan for the 2021-2025 period,” Phuong said. .
Accordingly, with the additional budget from the recovery program of more than 113,000 billion dong for public investment, it will deploy to increase the central budget estimate in 2022 – 2023 for public investment. In the immediate future, it will immediately spend on projects of the medium-term public investment plan for the 2021-2025 period that are eligible for implementation and disbursement.
As for the projects in the economic recovery program, according to Mr. Phuong, it is possible that the projects that are completed early can be disbursed as soon as 2022 or 2023. As for large projects, the solution will be The budget during the implementation process will fall between 2024 – 2025, at which time the capital will be used for the medium-term public investment plan. For projects that have been spent before 2022 – 2023, the remaining capital will be used to disburse for projects of the recovery program.
“In a simple way, with copper to buy fish sauce and copper to buy soy sauce. Now that we have money to buy soy sauce, but we don’t have it, we use money to buy soy sauce to buy fish sauce first. As for the future, when we have it, we can use the money to buy soy sauce. To buy, we use money to buy fish sauce to buy soy sauce,” the Deputy Minister of Planning and Investment compared.
Mr. Phuong emphasized, the harmonization between the recovery program and the medium-term public investment plan will solve the problem that we are prone to, which is “having money but no projects to spend”. This is a new feature of the recovery program implementation mechanism, which is very different from previous times.
Sharing the same opinion with Deputy Minister of Planning and Investment, GT.TS Dr. Hoang Van Cuong also said that it is not advisable to distinguish which currency “buys fish sauce”, which “buys soy sauce” because the money is from the State budget. However, it is necessary to make a very clear distinction, the implementation project needs to serve the goal of economic recovery.
“When a person gets sick, they build a house. To have the strength to build a house, one needs to supplement with a dose of tonic. After taking tonic to build a house. But if you don’t use that money to buy tonics, you can use it to build a house. . After building a house, you must have enough health to recover. At that time, buying tonics doesn’t make any sense,” said Mr. Cuong.
Mr. Cuong emphasized, what belongs to economic recovery must be done in 2 years (2022 – 2023).
In addition to focusing on implementing key projects, with more than 113,000 billion VND, many localities are currently waiting for the budget package for infrastructure investment under the economic recovery program as a solution to the problem. projects are “capitalized” in the area.
As the Hoa Binh – Moc Chau expressway is a key traffic project connecting Hanoi with the Northwest provinces. The project has been approved for investment in the form of public-private partnership (PPP) since 2019 but has not yet raised capital. The localities with the project passing through are Son La and Hoa Binh, which are continuing to propose conversion to public investment.
“The section from km19 – km53 has a total capital of 9,770 billion VND, it is expected that the announcement of the Ministry of Planning and Investment is 4,650 billion, so the missing capital is more than 5,000 billion, will continue to report to the central ministries. to have capital to arrange for the program,” said Director of the Department of Planning and Investment of Hoa Binh province Nguyen Van Thang.
Lack of capital is also currently a challenge of the highway project passing through 4 provinces of Ninh Binh – Nam Dinh – Thai Binh – Hai Phong. With the PPP investment plan, the project has a total capital of more than 10,000 billion VND. Currently, localities are proposing to be completely converted to public investment with an expected capital of nearly 21,000 billion VND. In the plan from the Socio-Economic Recovery and Development Program, only 1,100 billion VND is allocated for the project in the period of 2022 – 2023 – that is, it has not met 5% of the capital demand.
“The provinces have agreed to propose to the Ministry of Planning and Investment, the Ministry of Transport, the Ministry of Finance… to request the central government to support at least 50% of the project. In case the central budget is difficult, the provinces orange The end will try to meet the local budget about 50%,” said Ms. Ha Lan Anh – Vice Chairman of Nam Dinh Provincial People’s Committee.
Every locality has the mentality of wanting to access special capital from the support package, but according to Deputy Minister of Planning and Investment Tran Quoc Phuong, right from the beginning when developing the program, there was a very clear view. Obviously, this fiscal and monetary policy package is more supportive for the economy. It is not a solution that can replace all other solutions. Therefore, not only for 1 province or 2 provinces in the country but for all localities in the country.
“Put in the context that the state budget, especially the central budget, is not infinite so that every time we face difficulties, we ask the central budget for support.”
Sharing more on this issue, Prof. Dr. Hoang Van Cuong said that localities can completely use “priming capital” from the program to invest in the most entangled stages, or for bottlenecks that prevent disclosure. get funding…
“If the site clearance is clean, there is a clean source of land, then you can call for investors to come in, maybe even bid for land to create resources…”, Prof. Dr. Hoang Van Cuong recommended.
Meanwhile, Mr. Can Van Luc said that localities should be sympathetic because “everyone needs money, needs capital, everyone wants to benefit from the program”. But we should not rely too much on the Socio-Economic Development and Recovery Program when we have many other planned programs already underway.
With a scale of up to VND 350,000 billion, a large amount of money will be disbursed in the near future, many opinions have expressed concern about inflation?
Talking about this issue, Deputy Minister of Planning and Investment Tran Quoc Phuong emphasized that in the process of advising the Government on price management as well as at the price management meeting last February, the ministries have expressed determination in trying to control prices at the best level, especially in the coming time.
“Not all of the money will be disbursed at once. Macro agencies such as the State Bank, the Ministry of Finance, the Ministry of Planning and Investment will closely monitor market fluctuations. of the price in order to adjust the dosage in the most reasonable way,” said Mr. Phuong.
More optimistically, Mr. Can Van Luc said that he shouldn’t be too worried that this recovery package will push up inflation. According to Mr. Luc, if disbursing up to 70-90% of the support package, the disbursement will only increase somewhere around 2% of GDP.
According to Mr. Hoang Van Cuong, the amount of money increased for the economy of the recovery program is about 350,000 billion VND, but the actual amount of extra money from the budget is only about 176,000 billion VND. So the recovery program is not about pumping money into the economy, don’t think of it as pumping money.
“About 80,000 billion dong/year is not much, so if it is well managed and doesn’t let the money in the package run as “deviant”, the recovery program won’t be a big deal due to inflationary pressure. Solutions to stabilize oil prices and increase self-reliance in domestic production and processing will help mitigate many of the world’s impacts,” said Mr. Cuong.
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