Minister of Finance Dinh Tien Dung told the meeting that the ministry had taken measures to inspect tax payments, fight transfer pricing and collect VND42 trillion (US$1.8 billion) in tax arrears.

 

Budget collections have met the full-year target with revenues of provinces and cities exceeding the estimate by 15%.

 

Dung said there are a number of reasons behind the lower-than-expected gross domestic product (GDP) growth this year. Oil has dipped to US$44 per barrel, much lower than the estimate of US$60, thus sending budget collections dropping by VND2.4 trillion.

 

Commercial banks’ tax payments have been fallen by 30% from a year earlier. Losses of many State-owned business groups and corporations have also delivered a blow to the State budget.  

 

The Ministry of Finance has launched tax payment investigations into 82,000 businesses and transfer pricing probes into 329 others. 

 

Speaking at the teleconference, Le Minh Hung, governor of the State Bank of Vietnam (SBV), said demand for bank loans, especially those with long tenors, has stayed high.

 

Hung said the foreign exchange market has been stable and that liquidity in the banking system has been guaranteed. This year’s credit growth is estimated at 18.5% and benefits five priority sectors: agriculture and rural development, production of export goods, small and medium enterprises (SMEs), supporting industries, and high-tech outfits.    

 

However, problems will remain to be solved in the coming years with the settlement of bad debts seen as a tall order. 

 

Hung said the global economy would grow slowly in 2017 and other nations’ economic policies would affect Vietnam’s. Therefore, the SBV will take caution when adopting monetary policy biased towards economic growth. 

 

He added pressure on interest rates in Vietnam would remain big, so the central bank would have to monitor lending rates and strive to cut medium- and long-term rates as ordered by the Government.

 

The SBV would keep a close eye on credit growth to make it fall in line with the Government’s macro-economic targets, ensure safety and help businesses gain access to credit to expand operations.    

 

Minister of Industry and Trade Tran Tuan Anh said the Prime Minister had told the ministry to ensure sufficient power supply to support the economy to expand 7% next year. 

 

Anh said power supply would have to increase 11.4-11.5% to help fuel economic growth in the coming years.

 

Hydropower plants have been running at full tilt while the renewable energy sector is still in the early stages of development, so an immediate pickup in power supply would depend largely on thermal power stations.  

 

“Ensuring sufficient power supply next year will be a tough job,” Anh said.

 

The country’s electricity output will stand at some 32,000 MW in 2017. If weather conditions turn bad, electricity output would fall.

 

Anh said incentives should be given to power projects to help investors construct coal- and gas-fueled power plants and operate more thermal power stations such as Vinh Tan, Long Phu and Song Hau to meet rising electricity demand. 

 

Prime Minister Nguyen Xuan Phuc told the teleconference on December 29 that the nation has met 11 targets and almost met two others. Notably, the country has met the consumer price index (CPI) and budget collection targets set by the National Assembly and enterprises’ confidence in the business environment has improved.