State-owned economic groups have continued asking the government for financial support, putting more pressure on the state budget.
In a document recently sent to Finance Minister Vuong Dinh Hue, PetroVietnam said that it offered special terms and conditions for staff that had been sent abroad to work. These staff received financial assistance for accommodation, excess baggage and study fees for their children.
State-owned economic groups have continued asking the government for financial support, putting more pressure on the state budget.
PetroVietnam has proposed that the Ministry of Finance exempt personal income tax for these staff. If the recommendation was turned down, PetroVietnam would pay the taxes for the staff and the group would add the tax payment to its costs.
PetroVietnam said that by June 30 this year it had advanced VND2.9 trillion (USD138.1 million) for localities and agencies to implement their joint projects, with the group urging the Ministry of Finance to allocate capital so that the Ministry of Transport and localities could refund the outlay.
A recent statistics report showed that the monthly average salary of PetroVietnam employees topped VND17 million (USD809.5), the highest rate among state-owned economic groups in Vietnam.
By the end of October this year, the Vietnam Energy Association submitted to the Prime Minister a range of difficulties facing Vinacomin, EVN and PetroVietnam.
The association said coal export taxes which had been reduced to 10% were currently still too high compared to regional countries and continued posing difficulties for the coal sector. Therefore, it recommended the government to timely slash some taxes to help the sector.
It also noted that the coal sector would need at tens of billions of VND to build 28 coal mines and restore and expand 61 existing pits from now to 2015.
In 2007, EVN asked the Ministry of Finance’s approval for VND1 trillion (USD47.6 million) for it to offer its staff bonuses while it complained about a shortage of billions of VND for its power projects. The proposal was refused.
State subsidy mechanism still exists
Economist Pham Chi Lan said, "All of these moves show that groups still want to maintain the state subsidy mechanism,” adding that they do not share the government’s concern to ease difficulties for small and medium-sized enterprises which are on the verge of bankruptcy.
Currently, the state budget is very modest. The Ministry of Finance has even halted salary rises for state employees, meanwhile many groups offering high salaries have continued asking for financial support.
"The reason for this is prolonged monopoly. State-owned enterprises lack experience in facing competitive pressures, therefore, whenever they encounter difficulties, they seek the government’s support. If they faced real competition, they would not behave this way,” Lan commented.
Deputy Finance Minister Do Hoang Anh Tuan, said inequality exists among state-owned and private firms. When using the state budget, state-owned enterprises did not face capital cost pressures and received interest-free financial assistance every year.