Vietnam slashes purchase of public cars, overseas business trips

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The Ministry of Finance has ordered authorities nationwide not to buy any more cars with public funds and not to pay for any more overseas trips in order to help cut public spending.

The ministry issued a note that said local authorities must halt the planning of all new expenditures that have not been allocated funds for the second half of the year.

As for allocated funds, authorities must revise them and approve only what is absolutely necessary, according to the note.

The note also ordered local authorities to halt projects whose funding has been allocated but not implemented so far.

Late last month, the government urged the National Assembly, Vietnam's legislature, to increase the debt ceiling from 4.8 percent of gross domestic product this year to 5.3 percent next year, saying it needs money for public spending.

It made the proposal at a meeting organized by the parliamentary Economic Committee, and lawmakers are expected to vote on it this month.

The Ministry of Finance estimates public spending to be at VND196 trillion (US$9.29 billion) this year, but this is not enough to achieve a GDP growth target of even 5.2 percent.

So, next year, when the target is raised to 5.5 percent, the allocation needs to be raised to around VND224 trillion ($10.6 billion), according to the note.

Meanwhile, the government is set to lose VND59 trillion ($2.79 billion) in tax revenues this year due to recent income and corporate tax breaks, it said.

Therefore, the ministry put forward a series of measures to cut off regular public spending, including postponing the purchase of public cars, reducing the use of electricity, water and stationery at state offices and limiting the organization of meetings and conferences.

It also banned state officials from taking advantage of overseas business trips to travel, adding that local authorities should only assign officials to go abroad when it is really urgent.

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