VietNamNet Bridge  – The Ministry of Finance (MOF) is trying to keep expenditures for investment projects at the lowest possible level next year, but the Ministry of Planning and Investment (MPI) wants a higher level of spending.

MOF has estimated that the state budget can spend no more than VND180 trillion on investment and development projects, which is equal to 16 percent of the total state budget’s expenditure in the year, estimated at VND1,127.1 trillion.

The ratio of spending on investment and development of the total revenue of the state’s coffers in 2015 would be the lowest in many years.

The ratios were 23 percent in 2011, 27.5 percent in 2012, and 21.4 percent in 2013, while it is expected to reach 20 percent in 2014.

Explaining the lower budget for investment and development, MOF said the revenue of the state’s coffers in 2015 would be modest, estimated at VND901.1 trillion, of which VND562.6 trillion would be collected from domestic sources, or the land-use rights fee.

As such, the domestic source, the most important source of revenue, would see a slight increase of 12 percent in the year, lower than the 14-16 percent increase that the Prime Minister has requested for the 2015 budget estimates.

MPI has disagreed with the budget planned by MOF.

In a dispatch to the government recently, MPI Minister Bui Quang Vinh said that the spending on investment and development in 2015 must be VND242 trillion at minimum.

The ministry has proposed that the government restructure regular spending and debt payments to ensure the spending level.

The government’s Report No 283 to the National Assembly showed that the total investment and development capital in 2013-2015 must be VND646 trillion. Meanwhile, only VND338 trillion was spent in 2013 and 2014, or 78.5 percent of the estimates. This means that Vietnam still needs to spend VND208 trillion more to be sure it can obtain the targeted GDP growth rate.

The proposals by MOF and MPI will be considered by the government before it presents the budget expenditures in the upcoming National Assembly session, slated for October.

Thoi bao Kinh te Saigon has quoted the State Budget Law as saying that the spending on investment and development must be higher than the budget over-expenditure.

However, this principle has been violated in the last few years. The spending on investment and development has been cut because of various reasons, including the economic decline and the increasingly high spending needed to feed the state apparatus.

The ratio of regular spending on the total expenditure increased from 61.5 percent in 2011 to 70 percent in 2014, according to MPI.

The two ministries have also disagreed on the figure about the total state budget revenue in 2014.

MOF estimated that the figure would be VND835.5 trillion, or 6.7 percent higher than the estimates. Meanwhile, MPI thinks the figure must be VND867 trillion, or 10.8 percent higher than the estimates.

As such, there exists a big gap of VND32 trillion between the MOF and MPI figures.

US$1 = VND21,000