ECONOMYNEXT – Vietnam’s National Assembly has given the nod for a supplementary estimate of 44 trillion dongs (about 1.7 billion dollars) to be used to pay state workers who are laid off to trim the public sector, a media report said.
Vietnam is planning to reduce one fifth of the public sector workers at all levels of government and re-deploy the funds for free education and other priority areas.
The resolution was passed with 436 out of 438 deputies voting for on May 17, Vietnam’s Touitre newspaper reported.
The supplementary fund policies and benefits for officials, civil servants, public employees, and workers who are affected by restructuring of state agencies.
https://tuoitre.vn/quoc-hoi-chot-chi-hang-chuc-ngan-ti-cho-can-bo-cong-chuc-nghi-viec-khi-tinh-gon-20250517113755456.htm
Vietnam is planning to slash its public sector by 20 percent, after raising salaries last year.
In March Vietnam reduced the number of ministries to 14, and the the Government Office, the Government Inspectorate and State Bank of Vietnam which are cabinet level entities, taking the total to 17.
There are seven deputy ministers.
Vietnam has lower levels of taxation and a generally frugal government.
Corporate tax is 20 percent and value added tax is 10 percent in Vietnam.
Sri Lanka however is operating a revenue based fiscal consolidation involving taxing the public and productive sectors and expanding the public sector with new hires, after defaulting with salaries climbing over 80 percent of tax revenues.
Since 2015 after spending based consolidation – cost cutting – was abandoned under an IMF program, government spending went up from around 17 percent of GDP to close to 20 percent.
Part of the epensves came from back to back stabilization crises triggered by targeting potential output. (Colombo/May18/2025)