Financial Minister grilled over public debt

NA deputies, voters and public opinion are concerned about major contents pertaining to public debt; balancing capacity and resources for debt payment; solutions for reduced public debt to preserve national finances; pricing transfer; tax evasion and false tax refund; tax declaration fraud causing losses to the state budget; controlling and stabilizing market prices, especially essential commodities which have a direct impact on people's daily lives; State-owned enterprise (SoEs) restructuring and equitization.

According to a report from the Ministry of Finance, public debt has trended upwards in recent years. However, if compared to GDP, the ratio does not change much (debt-to-GDP ratio in 2010 was 51.7%, (50.1% in 2011), (50.8% in 2012) and estimated 54.1% in 2013, then current rate set by the NA will be 65%.

The pressure on new loans to repay old loans, remains relatively high because domestic capital markets are underdeveloped, buyers of government bonds  are mostly commercial banks and the capital structure of these banks are mostly non-term or short-term.

Finance Minister Dinh Tien Dung at the Q&A session (Photo: VGP)

Regarding the transfer pricing situation, the Finance Ministry said, the situation has resulted in huge losses for the State budget, adversely affecting the Vietnamese investment, business operations and adherence to tax legislation between enterprises and domestic shareholders.

To address this, tax agencies inspected 2,110 businesses suffering losses or showing signs of transfer pricing which increased 66.4% compared to 2012. As a result, they recollected a total of VND988.1 billion, up 32% from 2012.

In the first 4 months of 2014, tax agencies checked 361 businesses of the same identical situation and recollected VND287.2 billion thus reducing loss by VND 1232.5 billion.

For misconduct, tax evasion, fraud in declaration, and value-added tax refund, the Ministry of Finance pointed out the wrongful acts of taking advantage of favorable provisions for the establishment of business, capitalizing on regulations allowing enterprises’ to print and issue invoices and buy and sell goods to legalize input value-added tax invoices for trading agro-forestry-fishery products through intermediate stages.

Tax and customs agencies have intensified inspection and penalties for serious corporate misconduct. In the second half of 2013, they examined 200 firms, discovering 33 cases of major violations, prosecuting 17 businesses and recollecting VND 26.784 billion to the State budget.

Regarding SoEs restructuring and equitization, the Ministry of Finance has worked out a project for submission to the Prime Minister, to issue a decision on restructuring SMEs with a focus on economic groups and State Corporations in the 2011-2015 period.

The Ministry has asked the Government to issue a resolution on a number of solutions to promote the equitization of SMEs. By the end of March this year, restructuring plans of 81 out of 108 businesses were approved.

By the end of May 2014, as many as 5,971 enterprises were restructured of which 4,066 were equitized.

The Minister of Planning and Investment, the Minister of Industry and Trade, the Minister of Health, the Minister of the Interior, the State General Auditor will join question time to respond to issues related to their sectors.

The Q&A session will take place in two and a half days.