“Year 2006 is a top year of achievements of economic renewal, all socio economic targets planed have been fulfilled and over fulfilled creating a new force and status as well as new opportunities and challenges which both allow and force us to bring our country more and more development. That was the remark by Prime Minister Nguyen Tan Dung at the Conference on developing 2007 plan and state budget.”

On this important conference, Prime Minister has requested Minister, heads of Agencies and Presidents of 64 Provinces and Central-run Cities in the whole country to focus on three key tasks of the year 2007. They are GDP growth rate of 8% on the basic of high quality and efficiency, enhancing administration reform and preventing and driving back corruption, waste. According to the Prime Minister, if these tasks are well done it would push and create conditions for fulfillment of the other socio-economic tasks.

In order to fulfill the economic growth target, Ministry of Planning and Investment, Ministry of Finance as well as other Ministries shall have to submit Government for issuing mechanisms and policies creating the most favorable conditions for formulation and operation of economic groups, general corporations doing business in multi-sectors, multi-business lines with many owners in order to create the motive force and strength for the economy in progress of international integration and competition, effectively supporting small and medium enterprises. First and foremost, it is necessary to reduce, at maximum level, administration procedures in setting up, converting the trading and production activities, in accessing land, capital, technology and market. To attract large foreign and and market. To attract large foreign economic groups investing in trading high-tech goods and services in Vietnam. To implement the market rules in equitizing state-run enterprises, to adhere the equitisation with the development of stock exchanges. In the year 2007, there will be 550 state-run enterprises being equitized, of which there will be some state commercial banks, public interest enterprises.

Government has also requested the Ministries, People’s Committees at all levels to continue reviewing in order to abolish certificates, provisions unnecessary and inappropriate resulting in obstacles and preventing the trading and production as well as people’s life. Minister of Ministry of Planning and Investment, Mr. Vo Hong Phuc said the initially reviewing 250 kinds of certificate has revealed 40 “children and grandchildren certificates” necessary to be abolished. Three ministries those have the most “children and grandchildren certificates” necessary to be abolished are State Bank, Ministry of Culture and Information and Ministry of Communication.

Only one proposal for “transparent” mechanism

At the conference, all representatives from ministries, agencies and localities were of one mind about firm determination of the Government on key tasks of the year 2007. Most of localities have been no longer to propose for capital as before, they have proposed for concrete mechanisms instead. In addition, on the basic of real situation of each locality, they have proposed the Government for supplementing and improving policies. President of Vinh Phuc People’s Committee proposed: “In order to achieve the rapid growth, it is necessary to develop infrastructure by various capital sources. To be well done, the government should timely guide in detail the forms of BOT and BT.” President of Dong Nai People’s Committee Vo Van Mot had a similar opinion: “It is difficult to beg for investment from Government, locality governments may mobilize the capital, but the government should have a very 7 clear mechanism with regard such projects.” President of Hanoi People’s Committee Nguyen Quoc Trieu said: “government should actively re-organize state-run enterprises, speed up equitisation process so that this sector becomes more effective and efficient. On the other hand, the Government should create favorable conditions for development of business establishments in non-state sector. Government should also issue policies which speed up the socialization of social investment capital for development.” Mr Trieu informed: “When reviewing and surveying the lots of land being used in inefficient and waste manner, Hanoi has been under a lot of interventions”. Especially, in progress of fighting against corruption and waste, only people who wrongly did are handled but people who slowly did. The slowly doing has caused huge waste too.”

President of HoChiMinh City People’s Committee Nguyen Hoang Quan also wished that the Government should create conditions for Hochiminh city to achieve the target of 12% GDP growth.

According to Mr. Quan also proposed the Government to push up the building policies and mechanisms so that City could expand market, mobilize social capital from people in order to invest in construction of socio-economic infrastructures, to make Hochiminh City become an executive and allocating center with regard financial markets…

To fulfill the socio-economic targets, Minister of Ministry of Finance Mr.Vu Van Ninh said it is necessary to speed up the reimbursement of investment capital for development. According to the Minister, although 2006, all 64 provinces and cities have over-fulfilled their budget revenue plans, but tax debt situation is still serious. Some localities have tax debts up to 20-25% of total revenue in the locality. In the budget expenditure side, the reimbursement of investment capital for infrastructure construction was at very low level for this year. The localities have complained on the lack of capital, but when capital was available, the capital reimbursement could not be carried out. The ratio of capital reimbursement of this year was equal to 67% of the plan only; it is a lowest ratio for many previous years. The capital mobilized through government bonds for the period of 2003-2006 was reimbursed about 56%; for the year 2006, the reimbursement was 67% of the plan of which the proportions of fulfillment of central level and local level are is 74% and 56% of plan, respectively. The complicated of investment procedure has been one among reasons affecting the reimbursement. Up to 15^th December 2006, there have been only 367 projects over 820 planned projects using capital from government bonds, which have completed the investment procedure.

Concluding the conference, Prime Minister Nguyen Tan Dung said to make the target of 6.5% GDP growth become reality, just after this conference, ministries, agencies and localities shall have to deploy their own plans, especially production trading plans, in a real way. In addition, it is necessary to stabilize the macro-economic, control prices. In very beginning of the year, the main materials must be adjusted in accordance with market price. To strictly control banks, security investment funds and so on in order to avoid the investment by movement. To closely monitor the balance between demand on and supply of goods, especially with regard foods, vegetables, during Tet occasion. The Prime Minister also requested ministries, agencies and localities to review all mechanism in order to attract investment from all economic sectors of which the planning plays the most important role. Renew the way of investment into business establishments in orientation of “pushing them into stock exchanges to attract capital themselves”. On the other hand, the allocating budgetary investment capital must strictly proceeded in order to avoid the scattering. The Prime Minister expressed his special concerning to the development of rural area. Accordingly, it is necessary to create favorable conditions for farmers to borrow capital to produce goods, reduce a number of contribution items from farmers. Ministry of Finance and Ministry of Agriculture and Rural Development shall have to timely propose alternatives for exemption from and reduction of irrigation charges for farmers. For administration reform – one among three key tasks of the year 2007, Prime Minister said it is necessary to reform not only policy, regulations but also personal dignity of government officials, of which the reform of administration procedures and overcoming the corruption must be conducted in parallel. The administration reform would not only liberate the production forces, attract investment but also put people’s mind to rest. Ministries and localities shall have to review investment procedure, procedure for establishing business establishments, procedure for issuing certification for land used right, the land use planning and the selling houses in accordance with Decree No.61. Ministries and localities in progress of allocating their budget shall have to base on conditions and criteria in orientation of opening and transparency and conduct post-examination later on. In fighting against corruption and waste, it is necessary to push up the preventing, publicize properties, budget…In addition, the function agencies must early investigate and strictly handle the serious corruption cases.

Vietnam Taxation

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