Tax Justice

Fiscal policy – the collection of government revenue (mainly through taxes) and spending of the government budget – is at the heart of efforts to reduce poverty and address inequality. Fair and effective tax policies are essential for any government to be able to finance and provide high-quality public services, including health care and education, on which poor people rely the most.

There is currently little information available on the effect of various tax policies in Vietnam and how these either disadvantage or benefit the country and the public services the government provides. Although many pro-poor policies and programmes are in place, the budget allocation and expenditures for these are often unresponsive to the needs of the target populations.

In the health sector, for example, the budget for health services as a percentage of the total state budget was 9.5 percent in 2012, close to the level needed to ensure that essential health services can be provided to all citizens. However, nearly 60 percent of health financing still comes from private sources, in the form of out-of-pocket payments by citizens. This affects poor people the most, as they have less money available to spend on health care.

Strengthening public financial management is a government priority, and a series of reforms in this area have taken place since 2000. However, government efforts are hampered by the lack of reliable tax policy information. At the same time, most citizens are unaware of their rights as tax payers and have few opportunities to be involved in decision-making on tax issues and government spending. 

Increasing government revenue and providing better health services

A unique new Oxfam project is working to introduce a more fair fiscal policy in Vietnam. The project is based on the understanding that reforming tax policies, for example by reducing harmful tax exemptions and incentives, will contribute to an increase in government revenue. This can be used for greater public expenditure, such as for quality health care services.

Oxfam aims to empower civil society to effectively advocate for a fair taxation regime that increases domestic resource mobilisation, as well as to promote more sufficient, transparent and accountable budget allocation and spending for health services. In particular, the project will help to strengthen the capacity of the People’s Alliance for Health Equity (PAHE+), a multi-stakeholder coalition, and Live & Learn, a Vietnamese NGO working with youth on governance issues.

Working with civil society, citizens and youth

The PAHE+ coalition will, in turn, promote tax literacy and an understanding of health budgets among civil society and local citizens, focusing in particular on poor people, women and ethnic minorities. The aim is to ensure that these groups, and the public in general, are aware of their rights as tax payers and are able to speak up about the need for budget transparency and accountability in health services, monitor the local health budget, and influence tax policies.

Oxfam and our partners will conduct research on the effects of a number of potentially harmful tax policies and inequitable health financing policies. Based on this research, a series of policy changes and recommendations will be proposed.

Throughout the project, Oxfam and local partners are working closely with young people and the media to stimulate debate on the topic and raise awareness of the general public. 

The project in Vietnam is part of a global project, providing opportunities for exchange and learning at the regional and international level. Data and information from research in Vietnam will also serve as input to the Even It Up campaign, Oxfam’s global campaign on inequality.

Details

Project: Mobilising Progressive Domestic Resources for Quality Public Services

Location: Nationwide

Time frame: Jan 2015 – Dec 2018

Funding: Ministry for Foreign Affairs of Finland, Ministry of Foreign Affairs of the Netherlands