Ho Chi Minh City, the economic powerhouse of Vietnam, is set to achieve a historic milestone in 2024 by exceeding VND500,000 billion (US$19.65 billion) in budget revenue for the first time. This significant achievement positions the city to lock in 10 percent economic growth for the following years, further bolstering the national economy.
Analyzing the revenue structure, Director of the Ho Chi Minh City Statistics Office Nguyen Khac Hoang said that domestic revenue this year accounted for 71 percent and increased by 17.6 percent compared to last year. Some taxes with high revenue growth include corporate income tax, which increased by 19.4 percent, concentrated in some real estate, commercial, banking and finance businesses.
Furthermore, the value-added tax (VAT) rose by 12.2 percent as a result of the economic recovery within various industries. Personal income tax represented 12.9 percent of the overall revenue, experiencing a growth of 15.6 percent, with income derived from real estate transfer activities surging by 59.2 percent.
Concurrently, revenue from real estate activities doubled in comparison to the previous period, with land and water surface rental income increasing by 14.5 percent, attributed to entities making advance land rent payments and settling one-time land rent obligations.
In 2024, a 12 percent increase in budget revenue over the previous year was driven by the city's economic recovery, coupled with positive shifts in real estate policies. This revitalized market, alongside the booming tourism sector, significantly contributed to this growth.
Chairman Pham Huy Binh of the Board of Directors of Saigon Tourist Corporation (Saigontourist Group) indicated that while 2024 presents significant challenges, it also offers numerous opportunities for the tourism sector in Vietnam. For the year 2024, Saigontourist Group is projected to achieve total revenue of VND16,900 billion, reflecting a 15.4 percent increase compared to the previous year, alongside a total gross profit of VND4,353 billion, which marks a 16.5 percent rise over the same period last year.
To cater to the spending preferences of tourists, Ho Chi Minh City is committed to ongoing investments and enhancements in its tourist attractions.
According to Deputy Director Le Truong Hien Hoa of the HCMC Department of Tourism, tourism is a comprehensive economic sector that promotes the development of other sectors, so the city has directed the tourism industry to take care of each tourism product, improve service quality, especially green and sustainable tourism.
The southern largest city experienced a surge in international tourism in 2024, welcoming approximately 6 million visitors, a nearly 20 percent increase from the previous year. This influx generated substantial revenue, reaching approximately VND190,000 billion, an 18.8 percent increase compared to 2023.
As the most crowded city in the nation, Ho Chi Minh City's trade sector is thriving in 2024. Director Bui Ta Hoang Vu of the Ho Chi Minh City Department of Industry and Trade stated that the city has tasked the department with enhancing domestic consumption, viewing it as a key pillar to drive economic growth. Through various proactive initiatives, the trade, wholesale, and retail sectors in Ho Chi Minh City have reported significant achievements.
Ho Chi Minh City's 2024 successes have paved the way for a 10 percent growth target in the coming year.
Director Tran Phu Lu of the Ho Chi Minh City Trade and Investment Promotion Center shared that the city is making efforts to reform administrative procedures, create an open investment environment and actively support investors in removing difficulties and bottlenecks.
Simultaneously, the southern metropolis is applying investment incentives such as tax exemption and 10 percent tax reduction for a period of 15 years, or no more than 30 years; import tax exemption on goods imported to create fixed assets, imported raw materials, supplies, components for production, land rent, land use tax.
Talking about the city's weaknesses, Deputy Head of the Management Board of Export Processing Zones and Industrial Parks of Ho Chi Minh City Tran Viet Ha said that the transport infrastructure has not kept up with the development speed of the industrial sector, resulting in occurrence of traffic congestion and difficulties in transporting goods.
He also pointed out the lack of clean and large industrial land for giant investors as well as high costs for land rental and investment are reducing the city’s competitiveness.
On the other hand, the connection within the value chain between manufacturing and distribution companies, as well as between domestic and international firms, remains restricted, and the supporting industry is progressing at a sluggish pace.
Furthermore, there are significant obstacles in investment, the business environment, and administrative procedure reforms. Consequently, it is essential for the city to expedite the implementation of the Can Gio international transit port project, the Ho Chi Minh City - Moc Bai expressway, and to enhance gateways and metro lines to foster robust development in the city.
According to Deputy Director Pham Binh An of the Ho Chi Minh City Institute for Development Studies, the city should prioritize industrial transformation, specifically focusing on sectors with high scientific and technological value and fostering the growth of supporting industries.
The city promotes digital transformation, green transformation, and reduces labor intensity in industries; especially focuses on attracting investment in high-tech industries, chip manufacturing, and semiconductors. The key issue for success is to promote training of high-quality human resources, suitable for new industries and fields.
