Strong plea for decentralization: money flow in Ho Chi Minh City reorganized!

Strong plea for decentralization: money flow in Ho Chi Minh City reorganized!

An important exchange on decentralization and Vietnam's national budget took place in Ho Chi Minh City today. Phan Van Mai, chairman of the National Assembly's Economic and Financial Committee, highlighted the need for strong decentralization to solve tasks faster and more efficiently. This applies in particular to the proposed changes to the State Budget Act, which is intended to adapt seven relevant laws without endangering the fundamental principles and legal framework. The need for these reforms requires that tasks, powers and financial resources be redistributed to ensure more effective administration. Vietnam.vn reported that the National Assembly discussed in groups the law amending and supplementing the law on Vietnamese nationality, advocating a relaxation of the procedure for regaining nationality.

MP Tran Hoang Ngan expressed concerns about the revenue and expenditure of both the central and local budgets. Currently, 18 of 63 provinces and cities enjoy financial autonomy, while 45 localities remain under central budget control. Ngan suggested that regulation rates should no longer be divided into local circumstances, but rather be categorized into groups in order to achieve a more equitable distribution.

Financial sharing and development investments

The distribution of budget resources is carried out on the basis of five types of taxes: VAT, corporate tax, income tax, special consumption tax and environmental protection tax. In the new draft law, 70% of the income tax revenue from Ho Chi Minh City and Hanoi is earmarked for the central budget, while 80% of the special consumption tax also goes to the central budget. For land use fees, 30% goes to places without additional funding, while for places with additional funds, 20% goes to the central budget and 80% to the local budget. Ngan emphasized the importance of land use fees for development investments in Ho Chi Minh City.

Tran Anh Tuan also expressed concerns about revenue decentralization and called for a re-examination of the possible impact of these measures. At the same time, MP Do Duc Hien advocated preserving the National Assembly's decision-making authority over revenue and expenditure and not transferring it into the hands of the Prime Minister. Hien stressed the need for transparency and financial discipline in the implementation of the state budget, in line with international standards.

Relevance of international experiences

The discussion about decentralization in Vietnam takes place against the background of international trends. Germany plays an essential role in promoting decentralization processes and can draw on extensive experience from bilateral development cooperation. These processes not only lead to a new distribution of roles between different levels of government, but also change the relationship between citizens and the state. Consultations on decentralization processes take place at all levels involved and show the need to provide local self-governments with adequate financial and human resources in order to master the challenges of modern administration. BMZ highlights that reforms must be tailored sensitively and individually to each country.

Overall, today's discussion shows that Vietnam's path to effective decentralization is closely linked to providing sufficient resources and maintaining transparency and efficiency in the national budget.