Ministry considers tapping citizens for $7.9 bln to catalyze recovery

The process could last two years, with overspending set to rise by one percent each year, finance minister Ho Duc Phoc told the National Assembly Friday.

Rising public debt remained a concern, the minister said, noting that it was set to be 56.8 percent of GDP this year, under the 60 percent threshold, but higher than the warning level of 55 percent.

"We support issuing stimulus packages for economic growth, but there is a need to increase revenue and keep overspending under control," he said, adding that overspending could rise in 2022 and 2023, but should drop in the following years to ensure sustainable growth.

Another source of money for the stimulus packages which won’t increase public spending and overspending is the undistributed public investment earmarked for the 2021-2025 period, he said.

Phoc also proposed that the government continues to give businesses more time to make tax payments and keep offering discounts on several fees and taxes, including a 30-percent discount on value-added tax.

The finance ministry is consulting with the government on a plan to provide loan interest incentives worth VND20 trillion each year in 2022 and 2023.

This means that with an interest of 4 percent, VND1,000 trillion would be pumped into the economy, which will create jobs, increase productivity and reduce overspending in the upcoming years, Phoc said.

At the session, National Assembly chairman Vuong Dinh Hue said that the recovery package should also focus on social development.

"It is necessary to develop risk management programs to ensure that the mobilization and allocation of resources will be for the right purposes...". They should prevent losses and not cater to group interests, Hue added.

He also said that the Ministry of Planning and Investment needs to target a public investment disbursement ratio of 90 percent this year.

He noted that several projects were experiencing delays, including the construction of the Long Thanh International Airport and the eastern cluster of the North-South Expressway network.