Comissioning Party		Partner

Context

Since the introduction of economic reform policies in 1990s, Viet Nam has shown impressive growth rates over the last two decades. Consequently, Viet Nam has reached the status of a middle-income country. This economic growth, however, has been fueled by extensive use of labor, natural resources and capital in the past. Aiming to sustain growth at current rates, the productivity of use of all kind of resources needs to be improved and increase the quality and sustainability of growth in the long-run.

In this regard, the Government of Viet Nam approved the Green Growth Strategy (GGS) to orientate national policy-making towards sustainable growth. Fiscal policies and instruments, especially with regards to public expenditure, taxation and pricing, do insufficiently support the green transformation process. As capacities for implementation need improvement, the project supports the Ministry of Planning and Investment (MPI) and the Ministry of Finance (MoF) within the Programme Macroeconomic Growth / Green Growth.

Objective

The overall objective is to support a green fiscal policy reform aiming to sustain the economic transformation process towards sustainable growth in Viet Nam.

Approach

The project's advisory services aim at institutions that are responsible for the reform of green fiscal policies, namely the Ministry of Finance (MoF). Through strategic and technical advisory as well as capacity development, the partners are enabled to incorporate environment-friendly fiscal policies contributing to the successful overall implementation of the green growth strategy.

In this regard, advisory takes place on three different levels of intervention:

1.    Adaptation of the legal-regulatory and policy framework according to the Vietnamese Green Growth Strategy:

·    Development of a national action plan for a green fiscal policy reform

·    Development of a fiscal policy framework for green growth

·    Analyzing the budgetary process from a green growth perspective

2.    Support of the review and adjustment of policy instruments strengthening incentives for green investments in Viet Nam:

·      Adjusting the ecological tax and environment-related taxes and levies fostering environmentally responsible behaviors, incorporating environmental considerations and harmful substances

·      Introducing  standards and criterion for green public expenditure and procurement

3.    In-house trainings for staff of the Ministry of Finance (MoF) to improve competencies in analyzing and adopting fiscal policies and instruments

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