National Assembly finalizes salary reform, pension increase from July 1, 2024

On the morning of November 10, the National Assembly voted to approve the 2024 State budget estimate.

According to the resolution, from July 1, 2024, comprehensive reform of wage policy will be implemented according to Resolution No. 27 dated May 21, 2018 of the 12th Central Committee. Funding for wage reform is guaranteed from the accumulated wage reform fund of the central budget, local budgets and a part arranged in the State budget balance expenditure estimate.

Along with salary reform, the National Assembly's resolution clearly states that pensions, social insurance benefits, monthly allowances, preferential allowances for meritorious people and a number of social security policies are currently linked to the basic salary.

For central state administrative agencies and units implementing specific financial and income management mechanisms, from January 1, 2024 to June 30, 2024, monthly salary and additional income will be calculated based on the basic salary of VND 1.8 million/month, ensuring that it does not exceed the salary and additional income received in December 2023.

The benefits under this special mechanism do not include the salary and additional income due to the adjustment of the salary coefficient of the salary scale and grade when upgrading the grade and level in 2024.

The National Assembly Resolution clearly states that, based on the above principle, if the salary and income increase in 2024 according to the special mechanism is lower than the salary according to general regulations, only the salary regime according to general regulations will be implemented to ensure the rights of employees.

From July 1, 2024, all financial management and special income mechanisms of state administrative agencies and units will be abolished, and a unified salary, allowance and income regime will be applied. The current special mechanism for regular expenses under the special financial management mechanism (operating expenses, capacity building, modernization, ensuring professional activities...) of state administrative agencies and units will no longer be applied.

The Government is assigned to organize the implementation and report to the National Assembly at the 8th session. The National Assembly requests ministries, central and local agencies to continue implementing solutions to create sources for reforming salary policies according to regulations.

Ministries, branches and localities are allowed to continue to exclude some revenue items when calculating the increase in local budget revenue for salary reform as prescribed in Clause 2, Article 3 of Resolution No. 34 dated November 13, 2021 of the National Assembly.

In 2024, the State budget revenue will be more than 1.7 million billion VND. The National Assembly also agreed to transfer 19,040 billion VND of salary reform from local budgets until the end of 2023, remaining in some localities, to the 2024 budget to implement the basic salary of 1.8 million VND/month.

Regarding budget expenditure, the National Assembly agreed to spend more than VND 2.1 million billion in 2024. The budget deficit is VND 399,400 billion, equivalent to 3.6% of gross domestic product (GDP); of which, the central budget deficit is VND 372,900 billion (equivalent to 3.4% of GDP); the local budget deficit is VND 26,500 billion (equivalent to 0.2% of GDP). The total borrowing of the state budget is VND 690,553 billion.

In the resolution, the National Assembly assigned the Government to focus on operating fiscal policies proactively, reasonably, flexibly and effectively; coordinate synchronously, closely and smoothly with monetary policies and other policies, maintain macroeconomic stability, control inflation, promote growth, and ensure major balances of the economy.

“In particular, there must be solutions to overcome the decline in indicators on the ratio of State budget mobilization to GDP and the ratio of tax and fee mobilization to the budget.” To strengthen revenue management and restructure revenue sources to ensure sustainability, the Government must soon submit to the National Assembly projects to amend and supplement tax laws.

At the same time, resolutely and effectively implement solutions to combat revenue loss, transfer pricing, tax evasion, and trade fraud, especially in commercial activities based on digital platforms.

In the management and use of finance and budget, it is necessary to tighten discipline and order, enhance the responsibility of leaders; thoroughly save regular expenditures and expenditures that are not really necessary to ensure resources for preventing and fighting natural disasters and epidemics, supplementing development investment capital and supporting economic recovery.

The Government strictly directs the practice of thrift and the fight against waste; strengthens inspection, examination, and handling of responsibilities of organizations and individuals in complying with regulations on practicing thrift and fighting waste, ensuring effective use of the State budget, as required by the National Assembly.