The Ministry of Finance (MoF) recently presented a proposal to the government on a comprehensive overhaul of the Law on State Budget, aiming to foster transparency and encourage public involvement. The new approach would allow citizens to contribute their opinions and actively monitor the allocation and use of public funds at all levels.

In its proposal, the MoF highlighted that after more than eight years of implementation, from 2017 to 2025, the Law on State Budget has achieved notable results. During its execution, however, several challenges and limitations have emerged that call for a thorough review and adjustments to ensure it aligns more closely with the country’s evolving needs.

Five key objectives

To enhance the effectiveness of the Law on State Budget, the MoF proposes a comprehensive revision focused on achieving five key goals.

The first is to reform the revenue-sharing mechanism between the central and local budgets, ensuring fairness, transparency, and public accountability. This will not only strengthen the central budget’s leadership role but also empower local budgets to take on more autonomy and responsibility. In its proposal, the MoF outlines these five goals while also opening the door for public participation. Citizens will have the opportunity to provide feedback and actively monitor how the State budget is allocated, managed, and used.

The second goal is to further clarify the roles and responsibilities of central and local governments. Budgetary tasks will be more closely tied to the rights and duties of each level, with the most capable and efficient levels entrusted with responsibility for execution.

The third is to overhaul the budget allocation process for agencies and units, ensuring full transparency. By decentralizing the creation of fiscal policies, the proposal aims to eliminate outdated “request and approval” practices that often lead to inefficiencies and corruption, streamlining budget management.

The fourth focuses on enhancing oversight by the National Assembly, city and provincial People’s Councils, inspection bodies, audit agencies, the Vietnam Fatherland Front, political and social organizations, and the public. The proposal aims to delegate more powers to the government and local authorities in executing State budgets, ensuring accountability and effective governance.

The fifth and final goal is to drive a major restructuring of the State budget. By cutting down on routine expenditures and boosting investment for development, the goal is to ensure savings, efficiency, transparency, and heightened accountability among all budgetary units.

Enhancing transparency

In the draft amended Law on State Budget, the MoF proposes more detailed regulations on the entities responsible for publicizing the State budget and the content that should be disclosed.

Entities required to disclose the State budget under the proposal include budgetary units, organizations receiving State budget support, and, additionally, State financial funds outside the budget.

The proposal clearly defines the disclosure content for each entity responsible for transparency. It also includes new regulations requiring the disclosure of conclusions from audit agencies as well as the results of the implementation of audit findings on the State budget, except for content that is legally exempt from disclosure.

The MoF said its proposal aims to align with international standards on budget transparency and accountability, helping citizens access comprehensive and timely information on the State budget while enabling them to contribute their feedback and oversee the allocation, management, and use of State funds.

To facilitate easier and more effective access to information by organizations and individuals overseeing the budget, the draft proposes that agencies and units with electronic portals publicly disclose the State budget on their official websites.

The draft also removes the regulation on the timeframe for budget disclosure and recommends that the government issue specific regulations to ensure flexibility in implementation.