ACCA expert weighs in on Vietnam's proposed Budget Law reforms

ACCA expert weighs in on Vietnam's proposed Budget Law reforms

The draft amendment to the State Budget Law currently under parliamentary discussion promises to streamline budget allocation and settlement processes. Mike Suffield, director of Policy and Insights, ACCA spoke to VIR’s Vy Vy to give his view.

How would you assess Vietnam’s public financial governance on transparency, accountability, and fiscal discipline?

Mike Suffield, director of Policy and Insights, ACCA

Vietnam has made commendable strides in strengthening its public financial governance over the past decade, particularly in improving fiscal discipline and enhancing macroeconomic stability. The country’s efforts to institutionalise budget transparency and adopt international best practices, such as publishing budget documents and initiating audits of state-owned enterprises, are positive signals of intent.

However, there remains room to deepen accountability and transparency across all layers of government. Independent oversight, open data standards, and citizen engagement in budgeting are areas where more consistent application would drive further trust in public finance. Fragmentation of reporting systems and limited interoperability between agencies can still obscure the full picture of fiscal performance and risk.

From my perspective, one of Vietnam’s key strengths lies in its willingness to reform. But as with many emerging economies, sustaining momentum requires investment in institutional capacity and a culture of continuous improvement. Transparency is not only a technical exercise, it must be embedded in values and leadership at every level.

What are the institutional challenges hindering effective implementation of reforms?

Vietnam’s reform agenda is ambitious and well-targeted. Digitalisation, performance-based budgeting, and fiscal risk management are critical pillars of modern public financial management. But implementation often faces familiar roadblocks; siloed information systems, limited coordination across ministries, and uneven technical capacity at subnational levels.

Digitalisation, for instance, is not just about software or hardware. It’s about integration, interoperability, and change management. Building a centralised fiscal data architecture that supports real-time decision-making will require breaking down institutional silos and standardising data practices.

Capacity is another constraint. Medium-term expenditure frameworks and results-based budgeting demand analytical skills, forecasting capabilities, and an understanding of policy trade-offs. These competencies need to be built and retained across the public sector.

To address these bottlenecks, Vietnam could benefit from a whole-of-government approach, where reforms are not implemented in isolation, but as part of a coherent fiscal governance strategy. Drawing on international benchmarks, investing in human capital, and engaging professional bodies like ACCA to support upskilling could help accelerate reform outcomes.

What key reforms should be prioritised to ensure efficient allocation of resources and value for money in public spending?

Public financial management (PFM) is not a back-office function. It’s a strategic enabler of national development. For Vietnam to meet its 2045 vision, it must ensure that every bit of public expenditure contributes effectively to inclusive growth, resilience, and productivity.

Efficient PFM underpins everything from infrastructure delivery to education outcomes. It builds investor confidence, mitigates fiscal risks, and enhances the state’s ability to respond to shocks, be they economic, environmental, or geopolitical.

The key reforms that Vietnam should prioritise to ensure effective public financial management revolve around several critical areas. First and foremost, there must be a concerted effort to strengthen the connection between strategic planning and budgeting processes. This alignment is essential to guarantee that policy priorities are not only clearly defined but also thoroughly costed and adequately funded. By integrating these two functions more closely, the government can ensure that resources are allocated efficiently and in direct support of national development goals, reducing waste and enhancing fiscal discipline.

Secondly, it is imperative to enhance the mechanisms for value-for-money auditing and to refine procurement systems. These improvements would promote greater transparency and accountability in the execution of capital projects, ensuring that public funds are used in the most efficient and effective manner possible. By rigorously evaluating expenditures against outcomes, the government can prevent inefficiencies, curb corruption, and maximise the impact of investments on socioeconomic development.

Thirdly, institutionalising green public finance must become a cornerstone of the reform agenda. This approach involves systematically incorporating environmental and social considerations into all public spending decisions. By embedding sustainability principles into financial management, Vietnam can foster long-term resilience, support the transition to a low-carbon economy, and address pressing challenges such as climate change and social inequality. Green public finance is not merely an ethical imperative but also a strategic necessity for sustainable growth.

Finally, modernising both internal and external audit functions is crucial for strengthening real-time oversight and safeguarding public resources against leakages. Upgrading audit practices and capabilities will provide more timely and accurate information on fiscal performance, enabling corrective actions before problems escalate. Enhanced auditing supports a culture of accountability, builds public trust, and ensures that government agencies adhere to the highest standards of financial integrity.

Together, these reforms form an integrated framework that will enable Vietnam to better manage its public finances, encourage sustainable development, and realise its ambitions for inclusive and resilient growth.

Ultimately, PFM reform is not just a technical agenda. It’s a governance imperative. It requires capable institutions, committed leadership, and a professionalised finance workforce. At ACCA, we believe the finance profession has a critical role to play in shaping the future of public sector performance, and we stand ready to support that journey.

VIR