In late 2014, Vietnam’s National Assembly passed Resolution No. 78/2014/QH13 passing the State budget targets for 2015.
Accordingly, the 2015 total budget revenue is VND911,100 billion (equivalent to USD42 billion). Compared with the
annual budget revenue of 2014 (VND782,700 billion), budget revenue for 2015 is increased by 16.4%.
In the context of the recent dramatic fall in world oil prices, the above target revenue of Vietnam may be affected. The 2015 estimated revenue from crude oil is VND93,000 billion (equivalent to USD4.3 billion) on the assumption of crude oil price at 100 USD per barrel. The Ministry of Planning and Investment (MPI) estimates, if the oil price drops from 100 USD/barrel in 2014 to an average 70 USD/barrel in 2015, the budget under-collection will reach almost VND30,000 billion (USD1.3 billion). If oil price falls to average 60 USD/barrel, the budget revenue may decrease further. According to the Ministry of Finance and Resolution 78, the proportion of revenue from crude oil for the 2014-2015 period accounts for around 10.2% of the total budget (compared with a region of 20-25% in the past). The Ministry of Finance has recently confirmed that even in the case of crude oil price being USD 70-75/barrel, Vietnam should still maintain the fiscal balance without a need for fiscal adjustment.
Falling global oil prices are said to have two-way impacts on Vietnam’s economy and even the tax revenue. Besides the adverse impacts on revenue from crude oil exports and other revenue from oil, reduced costs on fuel will benefit manufacturers and consumers. Other things equal, higher business profits and consumption from fuel cost saving increases the income tax revenue.