Brian Jeffrey
This data was revealed in the 2023 Audit Report on State Budget Settlement published by the State Audit Office of Vietnam.
Among the three highlighted initiatives, one pertains to the construction of Ho Chi Minh City’s Metro Line No. 2 (Ben Thanh – Tham Luong), which is financed through a KfW loan tied to the Small and Medium Enterprise Development Program established in 2011.
Nevertheless, on February 24, 2024, the People’s Committee of Ho Chi Minh City formally requested the Ministry of Finance to halt the loan’s utilization.
In another instance, the Ministry of Finance entered into a loan agreement prior to the required appraisal and approval for re-lending, which contravened existing regulations.
This issue was linked to the project named “Climate-resilient infrastructure development for ethnic minorities – Binh Dinh subproject” (Project Code: 19964100).
The State Audit Office indicated that this led to delays in finalizing re-lending contracts with local authorities, negatively impacting the disbursement timeline.
The audit further identified procedural mistakes in the cancellation of funds related to the Vietnam Urban Upgrading Project (Loan Agreement No. 6055-VN, financed by IDA).
Specifically, errors in reallocating the canceled funds to new initiatives resulted in 4,190,020 Special Drawing Rights (SDR) not being renegotiated, which was against the Deputy Prime Minister’s directive.
In 2023, the State Audit also noted that the average balance of non-term deposits in the Foreign Debt Repayment Accumulation Fund was significantly high at VND 6,996.3 billion.
“Retaining non-term deposits within the State Treasury instead of transitioning them to fixed-term deposits at commercial banks does not optimize the fund’s efficiency,” stated the audit.
Consequently, the State Audit Office has advised the Government and the Prime Minister to instruct relevant agencies to examine and clarify accountability in line with regulations concerning the three long-stalled projects that incurred considerable commitment fees (notably the HCMC Metro Line No. 2 project) and the procedural inaccuracies that hindered the renegotiation of 4.19 million SDR.
The audit also identified weaknesses in tax revenue management, including inadequate oversight of individual enterprises, lack of collaboration in revoking business licenses for enterprises suspended for over six months, neglect of post-refund tax audits within the five-year risk-based timeline, and delays in VAT reimbursements to taxpayers.
Land management issues remain significant, with cases of land being used without official lease agreements, delays in land reclamation despite longstanding withdrawal decisions, absence of adjustments in lease prices post-rate stabilization periods, inaccuracies in lump-sum land lease payments, and unauthorized exemptions on land leases.
In the domain of mineral resource management, the audit found discrepancies in reporting production volumes for tax calculations that exceeded licensed limits, underreporting of environmental protection fees, and fees associated with mineral exploitation rights.
At customs, the audit revealed instances of incorrectly applying the 2% VAT reduction to specific goods, as well as a lack of consistency in classifying commodity codes.
