Increase in revenue for Ho Chi Minh City is justified

SGI

In my opinion, it is acceptable for Ho Chi Minh City to ask for an increase in the percentage of revenue it can keep, from 18% for the 2018-2020 period, to 24% for the 2021-2025 period, and 33% for the 2026-2030 period, similar to that in 2003.

Illustrative photo.

Illustrative photo.

The current revenue amount of 18% is the lowest among sixteen cities and provinces that submit revenue to the Central Government. For instance, Hanoi is allowed to hold back 35%, Binh Duong 36%, Da Nang 68% and Hai Phong 78%. Hence an increase would enable Ho Chi Minh City to cope with problems better, which it now fails to tackle or has to overlook, such as floods and traffic congestion.

Financial shortage can cause impediments in development plans. This does not only hinder the growth of Ho Chi Minh City, but also results in serious losses for the country as a whole, because Ho Chi Minh City is the country’s economic hub that plays a pivotal role in driving the economy of the entire nation.

This matter of Ho Chi Minh City keeping back a significant percentage of the revenue has been attracting a lot of attention recently as there have been varied opinions concerning it. Some people believe that Ho Chi Minh City should share its revenue with other provinces, especially poorer provinces, because some of these provinces cannot make ends meet.

However, the matter of how the “cake” is shared must be made very clear. I believe that creating favorable conditions for a strong growth for Ho Chi Minh City also paves the way for development in the entire country. A paltry percentage of the revenue kept back for Ho Chi Minh City would only serve to demotivate it, and excessive distribution to the poorer provinces might be beneficial for them in the short term but it would mean that the whole country would have to face an unreasonable burden.

Admitting that sharing the difficulties of poorer provinces is also essential, it is also vital to weigh the limits so that the national revenue can be distributed in an effective way to ensure sustainable development throughout the country.

People must not think that a high percentage of the revenue held back would be more beneficial to Ho Chi Minh City than other provinces, but it should be understood that a high percentage would enable the city to overcome hindrances, make major breakthroughs and create a positive effect for driving the entire country forward.

We have long been bearing a thought that Ho Chi Minh City is like other cities and provinces, and it should share its revenue with other regions because it is more wealthy. Such a mindset is totally partial and reflects a narrow mindset. I believe that Ho Chi Minh City has great potential as the country’s economic hub, and, if relieved of financial setbacks, it will make significant breakthrough to facilitate remarkable growth for the country and for the economy.

This is why it is reasonable for Ho Chi Minh City to propose an increase in revenue from 18% to 33%. This proposed percentage should be acceptable to all, not because Ho Chi Minh City makes huge contributions to the national economy, but more importantly, sufficient funds can only drive this metropolis to run more effectively, which is absolutely in line with the resolution of the Politburo.

Additionally, it would give the city greater autonomy so that it can develop creative measures to satisfactorily cope with its own problems. The rules for financial support for Ho Chi Minh City are too strict and once in a while, the City has to turn to the Central Government for additional funds to fulfill its various financial needs, which also leaves much decision making to others.

Hence, the story here is to not only seek benefits from the revenue, but also revise regulations and amendments to upgrade the relevant laws that make it possible for local officials to operate more efficiently.

The National Assembly issued Resolution No.54 for providing pilot policies and regulations for Ho Chi Minh City two years ago, but there have been many hurdles preventing the resolution from being put into practice. I think an increase in revenue for Ho Chi Minh City at this time will be the best way to makes it possible to better manage the City in accordance with the resolutions set by the Politburo and the National Assembly.

It is essential, because the development of Ho Chi Minh City would be greatly beneficial to the growth of the whole country. People should do away with the idea that an affluent city should share its riches with other cities and provinces or that the national revenue should be equally shared among cities and provinces as this would absolutely demotivate Ho Chi Minh City.

Translated by Nguyễn Gia

Dr. Tran Dinh Thien, Member of PM’s committee of economic advisers

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