Resolution 43/2022/QH15 on fiscal and monetary policies supporting socio-economic recovery and development program

RESOLUTION

On fiscal and monetary policies in support of the socio-economic recovery and development program^[1]

THE NATIONAL ASSEMBLY

Pursuant to the Constitution of the Socialist Republic of Vietnam;

Pursuant to Law No. 57/2014/QH13 on Organization of the National Assembly, which had a number of articles amended and supplemented under Law No. 65/2020/QH14;

After considering the Government’s Report No. 02/TTr-CP of January 2, 2022; the Economic Committee’s Verification Report No. 604/BC-UBKT15 of January 3, 2022; the National Assembly Standing Committee’s Report No. 106/BC-UBTVQH15 of January 11, 2022, on the acceptance, adjustment and explanation on the draft Resolution on fiscal and monetary policies to support the socio-economic recovery and development program, relevant documents, and opinions of National Assembly deputies;

RESOLVES:

Article 1. Viewpoints

1. To strictly adhere to the Party’s guidelines and orientations and the National Assembly’s resolutions, persistently maintaining the macro-economic stability; raising the productivity, quality, competitiveness, autonomy, resilience and adaptability of the economy; promptly satisfying the immediate and long-term demands; and ensuring the close association with the 2021-2025 five-year socio-economic development plan, annual socio-economic development plans, the 2021-2025 plan on economic restructuring, the 2021-2025 five-year national plan on finance and borrowing and public debt repayment, the 2021-2025 medium-term public investment plan, and the COVID-19 prevention and control program.

2. To flexibly administer, and closely, harmoniously and efficiently combine fiscal and monetary policies with other macroeconomic policies; to strictly control inflation, ensuring major balances of the economy; to increase state budget overspending only for the increase in development investment expenditures and ensure the state budget balance upon the application of tax exemption and reduction solutions to support the socio-economic recovery and development program (below referred to as the Program).

3. The Program support policies must be of a large scale and have sufficient resources with impacts on both the supply and demand; have central and focal objectives, and properly identify subjects in need of support to settle urgent issues, avoiding thinned-out allocation and waste of resources while ensuring performance of responsibilities of organizations, individuals, heads, and Party Committees as well as administrations at all levels.

4. Support policies and solutions must be feasible, prompt and efficient and implemented mainly in 2022 and 2023 with an appropriate roadmap in order to heighten the COVID-19 prevention and control capacity and ensure socio-economic recovery and development; the proposed resources must be capable of fast disbursement and absorption.

5. To mobilize, allocate and manage resources efficiently; to ensure rational balance of resources between regions, zones, localities, domains and priority beneficiaries; to enable easy implementation, inspection, monitoring and evaluation; to combat negative practices, corruption, group interests, and policy profiteering; to ensure efficiency, fairness, publicity and transparency.

Article 2. Objectives and targets

1. To quickly restore and develop production and business activities and boost the growth driving forces with priority given to a number of important branches and domains, striving to achieve some targets in the 2021-2025 period as follows: the average GDP growth rate is 6.5-7% per year; the public debt indicator is kept at below the alarming rate permitted by the National Assembly in Resolution No. 23/2021/QH15; and the urban unemployment rate is under 4%; to maintain the macroeconomic stability and ensure major balances in the medium and long terms.

2. To minimize expenses, provide support for cash flows, ensure the autonomy of and create favorable conditions for enterprises, economic organizations and the people.

3. To effectively prevent and control the COVID-19 epidemic; to ensure social security and livelihood of the people, particularly laborers, the poor, disadvantaged persons and persons heavily affected by the epidemic; to maintain national defense, security and social order and safety.

Article 3. Policies to support the Program

1. Fiscal policies:

1.1. Tax exemption and reduction policies:

a/ To grant 2% reduction of value-added tax rate in 2022 for commodity and service groups currently subject to the value-added tax rate of 10% (to 8%), except the following commodity and service groups: telecommunications, information technology, finance, banking, securities, insurance, real estate business, metals, precast metal products, mineral products (excluding coal exploitation), coke, refined petroleum, chemical products, and commodities and services liable to excise tax;

b/ To permit the inclusion of expenses as support or donation of enterprises and organizations for COVID-19 prevention and control activities in Vietnam in deductible expenses upon determination of incomes liable to enterprise income tax for the 2022 tax period.

1.2. Development investment policies:

To increase development investment expenditures from state budget funds with an amount not exceeding VND 176 trillion in 2022 and 2023, specifically as follows:

a/ Regarding healthcare activities:

To allocate an amount not exceeding VND 14 trillion for building, renovating, upgrading and modernizing grassroots healthcare and preventive medicine systems and regional-level centers for disease control, and raising the epidemic prevention and control capacity of institutes and central-level hospitals in association with providing training to improve the quality of human resources in the health sector, and domestic production of COVID-19 vaccines and drugs;

b/ Regarding social security, labor and employment:

- To allocate to the Vietnam Bank for Social Policies an amount not exceeding VND 5 trillion, including VND 2 trillion for interest rate subsidy and management expenses in order to implement the preferential loan policies under the Program; and not exceeding VND 3 trillion as interest rate support for borrowers under policy credit programs with the current lending interest rate of over 6% per year;

- To invest in the construction, renovation, upgrading, expansion and modernization of social relief establishments and for vocational training and employment with an amount not exceeding VND 3.15 trillion;

c/ Regarding support for enterprises, cooperatives and business households:

- To provide the interest rate support (2% per year) with an amount not exceeding VND 40 trillion via commercial banks for a number of important sectors and domains, and enterprises, cooperatives and business households capable of debt repayment and recovery; to provide loans for renovation of old condominiums, construction of social houses, houses for workers to purchase, rent and rent-purchase;

- To allocate an amount not exceeding VND 300 billion to the charter capital of the Tourism Development Support Fund;

d/ Regarding infrastructure development investment:

To provide an additional amount not exceeding VND 113.55 trillion from the state budget for development of infrastructure of transport, information technology, digital transformation, riverbank and coast slide prevention and combat, assurance of water reservoir safety, adaptation to climate change, and remediation of disaster consequences;

dd/ The selection of, and fund allocation to, projects under the Program must ensure the disbursement of the Program’s funds in 2022 and 2023, and comply with the following principles and criteria:

- Prioritizing the allocation of funds to ongoing national important projects and projects listed in the 2021-2025 medium-term public investment plan, which can be completed soon but have not been allocated funds or have been allocated insufficient funds;

- In case of allocation of funds to projects not listed in the 2021-2025 medium-term public investment plan: Funds shall be allocated only for important or urgent projects with spillover effects, which are capable of quick disbursement and immediate absorption into the economy in conformity with relevant master plans, ensuring efficient use of funding sources and balance of funds for completion of projects in the 2022-2025 period. For a number of new projects of significance to socio-economic development, to prioritize the support for ground clearance;

- Projects must undergo the law-specified investment procedures;

- To ensure publicity, transparency, fairness and harmony among regions, zones, localities and domains.

1.3. Other fiscal policies:

a/  To provide house rental support for workers with industrial relations, living in rented houses or inns and working in industrial parks, export processing zones or key economic regions (using about VND 6.6 trillion from the central budget’s increased revenues and saved expenditures in 2021);

b/ To increase government guarantee limits for domestically issued bonds for the Vietnam Bank for Social Policies with an amount not exceeding VND 38.4 trillion for providing loans in support of job creation; loans for students, non-public early childhood education institutions and primary schools, and for individuals to purchase or rent social houses, or build, renovate or repair their houses under social housing policies; and implementation of the national target program on socio-economic development in ethnic minority and mountainous areas in the 2021-2030 period.

2. Monetary policies:

a/ To synchronously and flexibly administer monetary policy instruments so as to contribute to maintaining the macroeconomic stability, controlling inflation, ensuring the safety of the credit institution system and actively supporting socio-economic recovery and development; to study for the stable maintenance of the maximum ratio of short-term capital for provision of medium- and long-term loans, calculate the reasonable required reserve ratio and practice open-market operations and capital reallocation, and direct credit institutions to continue to reduce their operational expenses in order  to lower the lending interest rate by 0.5%-1% in 2022 and 2023, particularly for priority domains;

b/ To continue rescheduling debts and retain groups of loans; to grant exemption from or reduction of loan interest rates for clients affected by the COVID-19 pandemic; to closely monitor economic and monetary market developments in order to work out appropriate solutions in support of enterprises and people while ensuring the operational safety of the system of credit institutions;

c/ To properly practice liquidity regulation, facilitating the acceleration of capital disbursement for the interest-rate support package beneficiaries;

d/ To practice reasonable monetary regulation in close coordination with fiscal policies, facilitating the issuance of government bonds so that credit institutions continue investing in government bonds;

dd/ To use an amount not exceeding VND 46 trillion from other financial sources for the import of vaccines and drugs as well as equipment and supplies to serve COVID-19 prevention and control in cases of necessity;

e/ To continue reallocating capital to the Vietnam Bank for Social Policies for employers to borrow loans for payment of wages for work stoppage and production restoration to employees, ensuring the feasibility and fast implementation in reality. To balance the monetary solutions in support of the Program with the overall plan on restructuring banks under special control.

3. Other policies:

To apply other policies for implementation of the Program in 2022 and 2023, specifically as follows:

a/ Using an amount of some VND 5 trillion from the Vietnam Public-Utility Telecommunications Service Fund to develop telecommunications and internet infrastructure, including VND 1 trillion for supply of tablets in furtherance of the “Waves and Computers for Children” Program;

b/ Removing hurdles in the regulations on contents of spending from and management of scientific and technological development funds of enterprises; using about VND 5 trillion for technology renewal, technology incubation, science and technology enterprise incubation, and commercialization of scientific research and technological development outcomes; decoding of technologies; purchase of equipment, machinery and materials for renewal of technologies and direct support for production and business activities of enterprises.

Article 4. Plans on resource mobilization

1. In order to acquire resources for implementation of fiscal policies in support of the Program, it is allowed to increase the rate of state budget overspending in 2022 and 2023 at 1%-1.2% of GDP per year on average (with an amount not exceeding VND 240 trillion), specifically as follows: In 2022,  the increase rate is about 1.1% of GDP (with an amount not exceeding VND 102.8 trillion) as compared to the estimate decided by the National Assembly; in 2023, the Government shall sum up state budget plans and estimates for the increased amount for the Program and for 2023, and submit them to the National Assembly for consideration and decision under regulations.

Demands for resources should be concretely calculated on the basis of making the fullest use of existing resources, central budget’s increased revenues and saved expenditures, and disbursement capacity so as to formulate appropriate plans on resource mobilization in each period through the following instruments:

a/ Issuance of government bonds, adhering to the principle of close coordination in administering monetary policies, fiscal policies and other macroeconomic policies, firmly maintaining the stability of the macro-economy and financial and monetary market and ensuring major balances; ensuring conformity with debt repayment and capital disbursement and absorption capacity of the economy, ensuring efficiency and avoiding waste. Priority will be given to the domestic issuance of government bonds in local currency, with the average term of under 9 years in 2022 and 2023. If necessary to issue bonds in foreign currencies, the Government shall report thereon to competent authorities for consideration and decision before implementation;

b/ Borrowing of official development assistance (ODA) loans and concessional foreign loans in the form of budget balance support;

c/ When necessary, the Government shall report to competent authorities for the latter to permit the borrowing of loans from other lawful financial sources as appropriate and the loans will be repaid upon the availability of funding sources in annual finance-state budget plans or other sources under regulations; to permit the direct issuance of government bonds for the State Bank of Vietnam.

2. To intensify other measures for resource exploitation, specifically as follows:

a/ To make the maximum and efficient use of resources in medium-term plans in the 2021-2025 period; to save and minimize expenditures, flexibly adjusting them between tasks and spending items within the scope of jurisdiction. To strictly manage revenue sources, striving to increase revenues for and thoroughly save expenditures from the state budget; to step up the tax reform roadmap, combating under-collection of taxes, transfer pricing and tax evasion, while reducing the rate of tax arrears; to modernize tax, customs and state treasury systems and implement e-invoicing, making use of untapped areas to increase state budget revenues, particularly cross-border digital transactions and services on digital platforms being provided to consumers in Vietnam; to resolutely recover fund amounts for recurrent expenditures that are slowly allocated or implemented;

b/ To flexibly apply mechanisms, policies and appropriate instruments to mobilize more resources for implementation of the Program; to formulate plans to increase excise tax for a number of goods items in need of restricted consumption for prompt application during the implementation of the Program; to accelerate the equitization and divestment of state capital at state enterprises, funds from trade-union organizations as well as socio-political organizations; to scrutinize non-state budget financial funds and investment capacity of the State Capital Investment Corporation in order to work out appropriate plans for funds mobilization and use; to study solutions for mobilization of local budget funds entrusted to the Vietnam Bank for Social Policies; to heed the effective incorporation of and accelerated capital disbursement for national target programs and the target program in support of investment in grassroots health establishments in localities.

Article 5. Application of peculiar mechanisms

1. The Prime Minister and heads of competent agencies are allowed to consider and decide on contractor appointment in 2022 and 2023 for consultancy bidding packages, bidding packages serving removal of technical infrastructure, bidding packages on compensation, ground clearance and resettlement, and bidding packages on construction and installation of national important projects, and large-scale and urgent important infrastructure projects on transport and medical infrastructure under the Program; contractors shall carry out the bidding packages mentioned in this Clause till the completion of projects. The order and procedures for contractor appointment must comply with the bidding law.

2. In 2022 and 2023, construction contractors are not required to carry out procedures for grant of licenses for exploitation of minerals for use as common building materials listed in the documents on survey of building materials serving national important transport infrastructure projects under the Program; the exploitation of minerals mentioned in this Clause shall be carried out till the completion of projects. Construction contractors shall assess the environmental impacts; submit to the management and supervision of the mineral exploitation and use; and pay taxes and charges and fulfill the obligations to protect, remediate and rehabilitate the environment in accordance with law.

3. In 2022 and 2023, the Prime Minister is allowed to consider and decide on the decentralization of powers to provincial-level People’s Committees of localities that have sufficient management capacity and experience and send their requests for acting as the managing agencies for construction of expressway sections in the form of public investment, which run through geographical areas under the Program (except the Project on the construction of the eastern North-South expressway in the 2021-2025 period that is managed by the Ministry of Transport) on the basis of maximization of the capacity of the Ministry of Transport. The managing agencies mentioned in this Clause may construct the expressway sections till the completion of projects.

Article 6. The Government is assigned:

1. To expeditiously issue solutions for implementation of fiscal and monetary policies as well as other policies under its competence prescribed by law for implementation of the Program; to guide the implementation of the mechanisms mentioned in Article 5 of this Resolution in association with specific responsibilities, not letting the occurrence of policy profiteering, group interests, loss and waste.

2. In administration work, to direct the mobilization, allocation, management and use of resources, ensuring thrift and efficiency and suitability to the progress of implementation and capital disbursement of projects and spending tasks under the Program; to closely monitor the macroeconomic indicators for adopting prompt solutions to ensure the macroeconomic stability and major balances, attaching special importance to inflation and non-performing loan indicators; to strive to increase revenues and save expenditures; to reduce overspending in order to achieve the indicators set in the 2021-2025 five-year national plan on finance and borrowing and public debt repayment; in case of big changes or high risks, to promptly report them to the National Assembly for consideration and decision.

3. To direct the formulation of plans on distribution of state budget estimates and additionally include them in the 2022 public investment plan for programs and projects under the 2021-2025 medium-term public investment plan and projects under the Program (including also the contents concerning the Vietnam Bank for Social Policies, the Tourism Development Support Fund, etc.); to report to the National Assembly Standing Committee for the latter to consider and decide on additional distribution and allocation of estimates under regulations before the Government makes additional distribution and allocation of estimates and supplements the 2022 public investment plan.

To direct the formulation of plans to increase charter capital from after-tax profits or profits after setting-up of funds in the 2021-2023 period for joint-stock commercial banks with more than 50% of charter capital held by the State and from the state budget for the Vietnam Bank for Agriculture and Rural Development.

4. Based on the principles and criteria specified in Clause 1, Article 3 of this Resolution, to expeditiously scrutinize and finalize the list of projects using the funding sources of the Program, report thereon to the National Assembly Standing Committee for opinion before the allocation of funds. To ensure the regulation of the public investment sources in the 2021-2025 medium-term public investment plan and in the fiscal and monetary policies in support of the Program in order to prioritize funds for key projects with spillover effects that ensure regional connectivity and growth promotion and are capable of capital absorption. To submit to the National Assembly Standing Committee for the latter to consider and decide on additions to the 2022 state budget estimates and public investment plan, and submit to the National Assembly for the latter to consider and decide on additions to the 2023 state budget estimates and public investment plan under regulations in order to accelerate the progress of implementation of and complete the disbursement of capital for the Program in 2022 and 2023; to ensure funding sources for implementation and completion of component projects in the Project on construction of the eastern North-South expressway in the 2021-2025 period.

5. To synchronously, promptly and efficiently realize the major tasks and solutions under the Program. During the administration process, to continue balancing the central budget for addition of resources for implementation of the Program as suitable to reality; to promptly apply solutions to maximize the mobilization of reasonable resources for the Program.

6. To flexibly adjust the spending tasks of the Program under current regulations with regard to the matters falling under its jurisdiction. For matters falling under the jurisdiction of the National Assembly, to report them to the latter for consideration and decision; in urgent cases in the interval between two sessions of the National Assembly, to report them to the National Assembly Standing Committee for consideration and decision and reporting to the National Assembly at its nearest session.

7. To proactively and expeditiously promulgate, and organize the efficient and synchronous implementation of the Program on COVID-19 prevention and control and relevant regulations; to slash, reduce and simplify administrative procedures and improve the investment and business environment; to focus on removal of mechanism, policy and legal obstacles related to social housing and houses for workers; to formulate breakthrough policies promoting innovation, digital transformation, digital economy, green economy and circular economy in association with sustainable development.

8. To study the plan under which enterprises are permitted to make pro rata additional deductions on the basis of actual expenses upon calculation of enterprise income tax, applicable to fixed asset-creating expenses and labor expenses; the plan to increase tax on securities and real estate transactions, and report them to the National Assembly Standing Committee for consideration and decision.

9. To intensify internal inspection and examination and provide early guidance in order to avoid mistakes, corruption, waste, and negative practices and strictly handle violations, particularly when large resources are allocated during a short time.

10. To attach importance to information and communication activities, contributing to create social consensus, inspiring and promoting the strength of national unity and the political system.

Article 7. Organization of implementation

1. The Government, ministries, central agencies and localities shall heighten their responsibility, especially the responsibility of the heads, in leading and directing the organization of implementation of the contents and policies mentioned in this Resolution, ensuring the strict compliance with viewpoints and objectives, publicity, transparency, efficiency, feasibility and schedule, and not letting the occurrence of policy profiteering, loss and waste.

2. The National Assembly Standing Committee, Ethnic Council and Committees of the National Assembly, National Assembly deputies’ delegations, National Assembly deputies, provincial-level People’s Councils, and Vietnam Fatherland Front and its member organizations, shall, within the ambit of their respective tasks and  powers, oversee the implementation of this Resolution.

3. The State Audit Office of Vietnam shall annually audit the implementation of the Program, ensuring the promptness, efficiency, publicity and transparency, combating negative practices, corruption, group interests, and present a report thereon before the National Assembly at year-end sessions of 2022 and 2023 and at the mid-2024 session.

Article 8. Implementation provisions

1. This Resolution takes effect from January 11, 2022 to December 31, 2023; particularly, the fiscal policies mentioned at Points 1.2 and 1.3, Clause 1, Article 3 of this Resolution shall apply to the budgetary years of 2022 and 2023.

2. The Government shall guide and organize the implementation of this Resolution; and present a report thereon before the National Assembly at the year-end sessions of 2022 and 2023, and present a final-review report thereon at the mid-2024 session.

This Resolution was adopted on January 11, 2022, by the XV^th National Assembly of the Socialist Republic of Vietnam at its first irregular session.-

Chairman of the National Assembly
VUONG DINH HUE