HCMC state budget collection drops by half

In the first six months of 2021, the city collected around VND1.8 trillion ($78.8 million) per day on average.

Yet in July and August, the daily budget revenue dropped to only VND700 billion and in September, fell even further to VND600 billion, which means a decrease of 50 percent compared to normal, the city’s leaders told a National Assembly delegation meeting recently.

The city’s vice chairman, Vo Van Hoan, said the city and its businesses are facing a lot of challenges and that it is possible the southern metropolis could not meet its budget collection target.

In its latest report on socio-economic conditions, the General Statistics Office of Vietnam assessed the pandemic had developed very complicatedly in the past three months, strongly affecting all aspects of daily life and commerce.

The office estimated that in the first nine months, HCMC collected more than VND279 trillion ($12.27 billion), meeting 76.5 percent of the target.

In this period, the city’s total retail sales of consumer goods and services stayed at more than VND363.3 trillion, down 17.4 percent over the same period, of which revenue of the accommodation and catering industries dropped by 30.5 percent, and of tourism, by 56.2 percent.

Total social investment capital fell more than 29 percent to over VND220.3 trillion.

The consumer price index (CPI), a measure that examines the weighted average of prices of a basket of consumer goods and services, like transportation, food, and medical care, rose by 2.57 percent over last year.

The government has tasked HCMC with earning VN365 trillion in budget revenues this year, counting working days only, which means it has to earn around VND1.5 trillion per day.

HCMC earned budget revenues of VND410 trillion in 2019, roughly 27 percent of the national figure and 3.3 percent higher than the target.

Last year, due to the pandemic impact, it achieved just 91.5 percent of the target, earning VND371 trillion.

HCMC's population makes up 9.5 percent of the nation's 96 million, while its labor force accounts for 8.2 percent of the national tally, but for several years now, it has repeatedly been the biggest money maker, contributing 25-27 percent of the state’s annual budget collection on average.

After going 120 days under various levels of social distancing, with the most stringent applied in July and August, HCMC has basically put the Covid-19 outbreak under control and started reopening on Oct. 1, resuming almost all socio-economic activities.

HCMC was granted autonomous decision-making powers in September 2017 to help it develop to its full potential. Accordingly, the city can raise and add additional fees and charges to increase its budget revenue.

Its top officials had in 2019 and 2020 asked the central government to let the city keep more of what it earns to pay for infrastructure development, because it has only been allowed to use 18 percent of its own budget collection so far.