HCMC budget revenues from crude oil seen declining

Crude oil exports contributed VND22.98 trillion to the city’s budget in 2015. The figure dropped to VND15.5 trillion in 2016 and is forecast to plunge to VND12.4 trillion in 2017, or 68.13% of the 2016 estimate. The global oil glut will continue dampening prices this year.

In contrast, import-export tax revenues reached VND156.5 trillion in 2015 and are projected to exceed VND226.48 trillion in 2017. Similarly, budget collections from domestic sources neared VND94 trillion in 2015 and are expected to increase to VND109 trillion this year. 

A representative of the HCMC Department of Finance said the city is allowed to retain only 18% of total shared revenue and this will mainly come from valued added tax, corporate income tax, environmental protection tax, personal income tax and special consumption tax.

All budget collections from crude oil exports will go directly to the State budget. If its import-export tariff revenues are higher than the target, the city can keep the balance. 

Overall, the city looks to raise its budget revenues by 15.79% year-on-year to VND347.882 trillion in 2017.

Meanwhile, budget spending by districts is estimated at VND70.647 trillion, including regular expenditures of VND34.2 trillion and investment projects of VND25.15 trillion. Budget overspending by districts is forecast to reach VND2.9 trillion.  

Speaking at the conference, Phan Thi Thang, director of the Finance Department, said the city government would take measures to meet the targets and would launch programs to back enterprises so as to create more sources of revenue.

To realize the ambitious targets, the city’s economy should grow at least 8.4-8.7%. The city’s contribution to the State budget in 2017-2020 is the highest among the nation’s 63 provinces and cities.

“The 2017 budget collection target is a tall order so the city must adopt strict measures to meet it,” Thang said.

She proposed strengthening inspections into tax payments, fighting fraud and reviewing tax arrears to step up budget collections. In addition, the customs department should continue improving administrative procedures, cutting time needed for goods clearance and slashing fees and charges to support businesses.

Thang said the city government would issue municipal bonds, use idle capital, ask for more official development assistance (ODA) loans and generate revenue from advertising on commuter buses.   

The city has set the GDP growth target of 8.4-8.7% in 2017 with total factor productivity (TFP) contributing 36% to economic growth, total investment in the economy accounting for 35% of GDP and 50,000 enterprises established, including those converted from household businesses.

The poverty rate is projected to fall by 1.2%. The city looks to create 125,000 new jobs and reduce the unemployment rate to less than 4%.

New houses are projected to amount to eight million square meters while all households will be able to gain access to running water and all of their solid waste will be treated.

HCMC’s GDP last year soared to roughly VND1,024 trillion, an 8.05% pickup versus 2015. Its budget collections surpassed VND307.3 trillion.   

HCMC chairman Nguyen Thanh Phong said 2016 GDP growth was higher than the target and the livelihoods of residents improved. However, industrial wastewater was not treated properly and environmental pollution remained a headache.