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Economy

Gov’t seeks to allow HCMC to retain 23% budget revenue, up from current 18%

Xuan Thinh Monday | 05/17/2021 11:02

Photo: Getty Images

PM Pham Minh Chinh is seeking National Assembly’s approval to allow Ho Chi Minh City to retain 23 percent of its budget revenues, up from 18 percent, to create conditions for development.

HCM City is the country’s economic powerhouse with a significant GDP contribution to the national budget, Vietnam News Agency cited PM Chinh.

Professor Tran Hoang Ngan, director of the HCM City Development Research Institute, expected that the decision would help resolve a number of challenges related to road infrastructure, social security, healthcare, and other issues in the city.

With 1 percent increase in retained revenue, the city would have an additional VND2 trillion ($86.7 million), and an increase of 5 percent would yield an additional VND10 trillion, the economist said.

At a recent meeting with the prime minister, Chairman of the city People’s Committee Nguyen Thanh Phong proposed that the government approve the budget retention rate of 23 percent instead of the current 18 percent over the next five years. 

HCM City has one of the lowest budget retention rate of all cities in the world, Phong said. The low budget retention rate has prevented the financial hub of HCM City from addressing traffic jams and school shortages.

Budget retention ratios for Hanoi, Hai Phong, Da Nang and Can Tho for the 2016-2020 period are 35, 78, 68, and 91 percent, respectively, far above HCM City. 

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