Minister of Finance Dinh Tien Dung said in an interview on VTV on Sunday that one of the key tasks that his ministry will fulfill this year is to balance the state budget.

An oil-rig in the Bach Ho oil field of Vietsovpetro, a joint venture between PetroVietnam and Russia's Zarubezhneft. Minister of Finance Dinh Tien Dung said it was projected that in 2016 the crude oil price would keep falling. The ministry has developed various scenarios on the crude oil to calculate the 2016 State budget. — Photo: VNA/VNS

Dung said it was projected that in 2016 the crude oil price would keep falling. The price might drop to under US$35 per barrel. In addition, under Viet Nam's international commitments, a cut of about VND10 trillion ($444 million) in the reduction of tariffs of trade would have serious effects in the 2016 Central State budget collection.

"As a result, the MOF has developed various scenarios on the crude oil price of $55, 50, 45, 40, 35 and 30 per barrel to calculate the 2016 State budget," Dung added.

"Right from the onset of 2015, the MOF focused efforts on the implementation of the five laws on taxation which came into effect during the year, including the Tax on Natural Resources, Tax on Environmental Protection and Tax on Special Consumption," said Dung.

Based on the five taxation laws, the MOF adjusted domestic revenue from tax collection while reducing the export and import taxes from crude oil, Dung added.

In 2015, the MOF also focused its efforts to improve administrative procedures, particularly in the areas of tax collection and customs procedures. By late 2015, the MOF was able to collect VND40 trillion ($1.8 billion) in tax debts from 2014.

Dung said in the context of the steep drop of the crude oil price internationally, the MOF had worked closely with other ministries, sectors and localities to monitor closely inputs while reducing public spending so that Viet Nam could have more money to invest in business production, to speed up economic development and to increase state budget revenue.

"Thanks to our synchronous policies, by the end of 2015, our national budget collection surpassed 8 per cent of the target set by the National Assembly. What's more important, the MOF didn't have to use the VND10 trillion ($444 million) earned from the equitisation of State-owned Enterprises to fill the gap in the Central State budget due to the sharp reduction of crude oil earning," Dung said.

Referring the complaints of many people about the MOF's slow adjustment of the petrol price when the international crude oil dropped 40 per cent but the petrol price in Viet Nam reduced only by 12 per cent and diesel by 30 per cent, Dung said, "The price of crude oil and the retail prices of petrol and diesel are the two concepts having close relationship with each other. But they are quite different in the price ratio. As the retail price of petrol/diesel depends on many factors, including processing, circulation, storage and tariffs," Dung added.

He said the expenditure cost of crude oil extraction accounted just 40 per cent of the price while that of the retail price of petrol accounted for 50 per cent.

However, he argued that the retail price of Viet Nam's petrol/diesel was still cheaper than those of China, Laos or Cambodia.

Dung promised that in 2016, the price of petrol/diesel in Viet Nam would continue to follow the market price as written in the Government Decree 83/2014.

"In its management, the MOF upholds the transparency in its management and accountability in line with what's written in the Government Decree," said Dung.

In 2016, Viet Nam will adopt various policies to mobilise resources from inside and outside the country to help Vietnamese enterprises to integrate internationally.

To facilitate the development and sustainability of our market, in 2016, the MOF will issue various measures, including encouraging the flow of investment capital from foreign investors, particularly the Government's Decision to open "wider rooms" for them in the stock exchange. At the same time, Viet Nam will simplify its administrative procedures to enable more foreign investors to operate in the Vietnamese market, particularly in buying shares from the equitised State-owned enterprises.