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Ho Chi Minh City
Sunday, May 29, 2022

HCMC proposes higher budget retention rate to fuel growth

The Saigon Times

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HCMC – The HCMC government has proposed the National Assembly (NA) revise up its budget retention rate in the 2023-2026 period to address its huge capital needs for infrastructure development and economic growth.

The proposal was included in the city’s socioeconomic recovery and development program in the 2022-2025 period with two phases, the local media reported.

The city wants the retention rate at 23%-25%. If not, it should be kept unchanged at 21%.

The city assigned the HCMC Institute for Development Studies to coordinate with the Department of Finance to review the plan on the city’s budget retention rate in the 2022-2025 period with a vision to 2026-2030 to increase the ratio of revenue contribution to the State and support the city’s quick and sustainable development post pandemic.

In 2017-2021, the city’s budget retention rate was 18%, which was extremely low and failed to support the city’s development, as assessed by many economists.

According to NA deputy Tran Hoang Ngan, the city has many achievements and remains the leading economic hub of the country and an important driving force of the southern key economic zone. It contributed 27% of the State budget and 22% of the country’s gross domestic product.

However, the city has encountered multiple difficulties. Specifically, the city is facing an increasingly overwhelmed infrastructure system and other issues, such as traffic congestion, flooding, environmental pollution and overcrowded schools and hospitals, affecting the lives of locals.

In November last year, the NA approved the HCMC budget retention rate increase from 18% to 21% for 2022, compared to the 23% proposed by the city.

In 2021, the city’s budget revenue reached over VND381.5 trillion, exceeding the target, including VND263.8 trillion from domestic production and business activities and VND117.6 trillion from import-export activities. This year, the city has been assigned to collect over VND386.5 trillion, or nearly a quarter of the country’s estimated revenue.

Under the socioeconomic recovery and development, the city will focus on resuming production and business activities, stabilizing the lives of local residents and connecting the city with other localities in the first phase, which will last until the end of this year. From 2023 to 2025, the city will remove bottlenecks and promote its strengths to develop further.

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