HCMC – The National Assembly on June 25 approved amendments to the State Budget Law, allowing HCMC to retain 80% of its revenue from land use and land lease fees.
The revised law applies to localities that do not receive balancing transfers from the central Government. These areas, including HCMC, will keep 80% of land-related revenue and send the remaining 20% to the central budget.
Localities that do receive central budget support will retain 85% of the revenue and remit 15%.
Hanoi remains an exception. Under the Capital Law, the city will continue to keep 100% of its land-related revenue.
The central Government turned down a proposal by HCMC to retain all land-related revenue for five years to support infrastructure development. The Government cited the need to balance overall national interests, noting land is a national resource and HCMC accounts for about one-third of the country’s total budget revenue.
Finance Minister Nguyen Van Thang said the revised law aims to increase local budget autonomy and accelerate key infrastructure projects. It allows local governments to use up to 50% of their Financial Reserve Fund at the start of the year to finance provincial infrastructure, provided the funds are repaid within 36 months.
The law also grants the prime minister additional authority in budget allocation and expands local government powers to adjust budget plans and spending.
The revised law includes 79 articles and takes effect from the 2026 fiscal year. Provisions on science, technology, innovation, and digital transformation will take effect on July 1, 2025.
The 2024 budget settlement and the 2026 budget planning will continue under the 2015 law.
