VietNamNet Bridge – The Ministry of Finance’s proposal to cut the minimum wage by VND100,000 per month from January 2014, has encountered disagreement from the prime minister as well as many other government officials.

The government's regular meeting in September.

At the government’s regular meeting on September 29, Finance Minister Dinh Tien Dung said by the end of September this year, total state budget revenues reached VND543.83 trillion (USD25.9 billion), equal to only 66.6% of the estimate.

He added that only 23 localities met the tax collection target, while the other 40 failed to do so, including many big cities like Hanoi, HCM City, Haiphong and Danang and Quang Ninh Province.

Therefore, to ensure the state budget revenue balance, the minister recommended some solutions, including the basic monthly salary reduction of VND100,000 from January 2014 to bring it back to the same level as it was before May 2013 VND 1.05 million.

However, Deputy Prime Minister Vu Van Ninh said, “By the end of this December, the basic salary rise will have been active for seven months. Thus, it is unreasonable to cut the salary. I totally disagree with this solution.”

Ninh suggested that the ministry should seek ways to increase revenues from other sources to balance the state budget and slash annual government spending by VND2 trillion (USD95.23 million).

Sharing the same opinion, Deputy PM Nguyen Thien Nhan said, “It is impossible to reduce the basic wage, particularly in the context of the GDP increase, as this would have a huge social impact.”  

PM Nguyen Tan Dung concluded that, “Over the past three years, despite the basic salary rise of 30-35%, goods and services prices have also been on the sharp increase, resulting in financial difficulties for almost everyone. Therefore, cutting the minimum wage is not a viable solution.”

Transport Minister Dinh La Thang said  low state budget revenues were attributed to cooperation between tax officials and enterprises and he cited the computer purchases of the Ministry of Transport as a typical example, saying that the seller asked the buyer whether he needed  advice about VAT appropriation through the one-price VAT invoice.

Thang also said that spending for holidays and overseas trips should be cut.

Deputy PM Nguyen Xuan Phuc said trade frauds and transfer pricing of FDI companies also affect the tax collection.

Source: DTriNews