Let HCMC retain more, Hanoi less of municipal budget revenues: ministry

A draft plan prepared by the ministry would allow HCMC to retain 21 percent of its own budget collection each year instead of the 18 percent it has been allowed since 2017 and cut Hanoi’s retention from 35 percent to 32 percent.

The plan will gather feedback and due adjustments made before it is submitted to the National Assembly, Vietnam’s parliament.

In May, Prime Minister Pham Minh Chinh had said that the government agreed in principle with the idea of HCMC retaining a higher share of its budget collection.

The finance ministry estimates HCMC’s budget collection at VND386.57 trillion ($16.9 billion) next year, up around 6 percent against this year. The city will continue to be the biggest nation’s money-maker.

For years, the southern metropolis has been the locality contributing the biggest part in the nation’s budget collection, accounting for 25 percent of the state’s annual budget collection on average.

The city’s population and its labor force make up 9.5 percent and 8.2 percent of the nation’s total. Senior municipal 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.

Meanwhile, Hanoi’s request for a raise in budget collection retention for this year has been rejected. Instead the ministry’s draft plan cuts the rate from the current 35 percent to 32 percent.

It estimates Hanoi’s budget collection next year at more than VND311.65 trillion, making it the second biggest money-maker after HCMC.