70th anniversary of Hanoi's Liberation Day Vietnam - Asia 2023 Smart City Summit Hanoi celebrates 15 years of administrative boundary adjustment 12th Vietnam-France decentrialized cooperation conference 31st Sea Games - Vietnam 2021 Covid-19 Pandemic
Home / Economy / Banking & Finance
Global oil crash exerts little impact on Vietnam’s budget revenue
Ngoc Thuy 08:59, 2020/04/25
In this year's state budget plan, revenue from crude oil is predicted at VND35.2 trillion (US$1.5 billion), accounting for 2.3% of the total.

As revenue from crude oil only accounts for 3% of Vietnam's state budget collection, a sharp decline in global oil prices has little effect on the country’s revenue, according to Vo Thanh Hung, director general of the State Budget Department under the Ministry of Finance (MoF).

 Vo Thanh Hung, director general of the State Budget Department under the Ministry of Finance (MoF). Source: MoF. 

However, as the state budget plan is based on oil prices projected at US$60 per barrel, a plunge in oil prices would no doubt negatively affect budget revenue, said Hung.

According to the official Hung, there has been a significant change in Vietnam’s structure of budget revenue. While revenue from crude oil accounted for 13% of total budget revenue in the 2011 – 2015 period, the rate fell to 4% in 2016 – 2018 and 3.2% in 2019.

In the budget plan for 2020, revenue from crude oil is predicted at VND35.2 trillion (US$1.5 billion), accounting for 2.3% of the total and down VND11.6 trillion (US$493.56 million) from the actual revenue in 2019.

Taking into account a broad picture when the state budget is expected to take a blow from the Covid-19 pandemic, Hung said the situation requires measures to mitigate potential losses.

For the oil and gas industry, oil producers still have long-term contracts in the upcoming six or seven months, so short-term fluctuations of oil prices would have little to no impact.

In fact, Vietnam is a net oil importer, therefore, lower oil prices would be a beneficial for the economy and relieve pressure on the business community, Hung said. The MoF would continue to monitor the situation to assess its impacts on the economy, he added.

In the future, the MoF would increase the share of domestic revenue in total budget revenue, which could go up to 84% in 2020 from 68.7% in the 2011 – 2015 period, Hung added.

The MoF is committed to keeping a steady stream of revenue, which could be realized by improving the business environment and reforming administrative procedures, timely addressing concerns of people and enterprises, Hung stressed.

TAG: oil prices Vietnam covid-19 coronavirus nCoV pandemic covid-19 coronavirus nCoV state budget Tax revenue
Other news
17:00, 2024/07/16
Hanoi to push for smart tax agency
The Hanoi Department of Taxation will continue to review and standardize personal tax identification data, and to develop solutions for digitizing and electronic processing of various stages to support taxpayers.
22:07, 2024/07/10
Taxes revenue from online shopping in Vietnam nearly triple in H1
Vietnam has 3.1 million business households and individuals, many of whom sell goods and services online without registering, declaring, or paying taxes.
15:20, 2024/07/10
Banks inject over US$20 billion into economy in June, surpassing five-month total
The surge in credit following a period of stagnation is partly attributed to increased borrowing and corporate bond issuance in the latter half of the year.
15:26, 2024/07/08
Corporate bond issuance almost triples in H1
Institutions purchasing corporate bonds in the primary market accounted for 94.8% of the issuance volume, with credit institutions (53.5%) and securities companies (21.9%) being the main buyers.
14:33, 2024/07/04
Vietnam climbs 11 places in budget transparency ranking
These results highlight Vietnam's commitment to improving budget transparency through accessible documents and timely and accurate budget information disclosure.
08:37, 2024/06/30
Finance ministry cut fees for fifth time
The policy is expected to result in a VND700 billion ($27.5 million) decline in state budget revenue.