With the implementation of various economic policies, participation in many bilateral as well as multilateral agreements, the need for the existence of a healthy fiscal policy reform in Vietnam was strongly felt by the Vietnamese government. The multilateral as well as bilateral agreements were mainly related to finance, investment and trade.
Due to the introduction of these various economic policies, inflation and budget deficit were brought under control in Vietnam. As part of the fiscal policy reform in Vietnam, it was felt that the budget revenue of the state pertaining to exports as well as imports should be able to render enough protection at the time of crisis.
The WTO or the World Trade Organization, urges Vietnam to put into force the following. It was felt by the World Trade Organization that tariff related to imports ought to be reduced. The reason being that import tariff is the only means of protecting domestic production and should therefore not be used as a device for raising revenues.
With regard to fiscal policy reform in Vietnam, the charges as well as the fees imposed on export activities and import activities, should be in a position to retrieve costs related to only services .
There were certain criteria that needed to be fulfilled before Vietnam could be a member of the WTO. It was suggested that direct budget expenses, which include export related subsidies, subsidies related to the state owned enterprises or the SOEs be removed. The other requirements stated that equal commitment ought to be shown by the country towards foreign as well as domestic financial services rendered by various firms. The fiscal policy reform in Vietnam should be able to promote and accelerate access to the market pertaining to trade.
There were few other spheres in the economy of Vietnam, which needed attention. It was also felt that various economic institutions especially private enterprises as well as the state owned enterprises, firms, which take care of auditing and accounting, insurance companies are not so efficient. Therefore, these areas ought to be attended to for the smooth functioning of the economy especially the trading sector. Reduction of tariff as per commitment of WTO, BTA, AFTA, ASEAN would impact the government’s budget revenue directly. Therefore, restructuring of fiscal policy reform in Vietnam is urgently required. It should be ensured that administration of taxes are done in a more effective manner.
Last Updated on : 26th June 2013