Vietnam sets bigger 2027 deficit, plans tougher tax collection and more borrowing

Bigger gap, bigger asks for revenue

Vietnam's National Assembly signed off on a 2027 budget shortfall of 739.6 trillion dong, pegged at 4.5% of GDP and higher than this year's 4.2% goal. To help meet targets, legislators aim for a 9.1% rise in state revenue in 2027 versus this year.

The plan leans on tougher tax enforcement and a broader base. The government was instructed to crack down on transfer pricing and evasion, recover overdue tax debts, and strengthen intake from online commerce, digital-platform businesses, and mining.

Funding mix, risks and strain on banks

Next year, Hanoi plans to intensify revenue enforcement and increase government borrowing, aiming to lean less on banks as it funds major infrastructure for its push for at least 10% GDP growth. Officials have also cautioned about rising inflation pressures and growing needs for capital and energy as ambitions scale up.

A separate parliamentary document projects government borrowing rising by about three tenths next year to 1,280 trillion dong, without detailing the sources. The Finance Ministry is discussing with global lenders the possibility of a sovereign dollar bond of up to $1 billion - the first since 2014 - while no schedule has been set.

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Pressure points for businesses

Higher revenue goals could translate into larger tax bills, higher compliance costs, and tighter enforcement for small firms and households, which could weigh on private activity and spending. The strain is already visible: state media counted about 56,300 business closures from January through October, more than double the tally in the same period last year.

Tax administration is a persistent headache. In an April survey of 1,001 household businesses by the Vietnam Chamber of Commerce, 93% said tax procedures were difficult, 92% flagged accounting requirements, and roughly the same proportion said they were worried about increased taxes and fees this year.

The bottom line for investors

The combination of a wider 2027 deficit and higher planned borrowing underscores the push to raise state revenue while still supporting businesses. According to the ministry's news website, Finance Minister Ngo Van Tuan estimates tax exemptions and reductions in 2026 at about 240 trillion dong, and puts payment extensions at around 120 trillion dong. For your portfolio, expect continued funding for big projects alongside stricter tax collection - a setup that can benefit infrastructure plays even as smaller, domestically focused operators face tighter margins.

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