PSU-FIN 271

Money and Banking 1

Chapter 8 – Public Finance

2 hours

M. Fin. Dang Le Vu
Email: danglevu@dtu.edu.vn
Review question

________are financial intermediaries that do not accept

deposits from individuals and institutions and make loan.
a. Depository institutions
b. Nondepository institutions
c. Financial intermediaries
d. All of the above
Review question

Which of the following is not a depository institution?

a. Commercial Bank.
b. Saving and loan associations.
c. Securities firms.
d. Credit Union.
Review question

Consumer loans, Business loans and Sales loans are the

types of
a. Securities Firms.
b. Saving and loan associations.
c. Pension Funds.
d. Finance companies.
Learning Objectives

1. To understand what State budget is.

2. To understand the roles of State budget

3. To understand what Revenues and Expenditures is
 Outline

1. State Budget

2. The roles of State Budget

3. Revenues and Expenditures

State Budget

The State budget comprises all revenues and

expenditures of the State, which have been decided
by the competent State agencies and implemented
within one year in order to ensure the performance
of the functions and tasks of the State.
The nature of these economic relations
1 2
• Capital
contribution Business and • Provides
to the Enterprises administrative operating
business units funds
• Pay taxes
Sate
Budget
• Pay taxes
• Receive Populatio Financial
• Issue bonds
subsidies n class market
from State
Budget
3 4
The roles of State Budget

o Resource Mobilization
o Macroeconomic Regulation and Control
• Stimulate economic growth and development
• Regulate the market, stabilize prices and
incomes of all classes in society
Revenues
The State budget revenues include
revenues from
- Taxes
- Charges and fees
- Revenues from economic activities of the State
- Domestic and External borrowings
- Aids
Discussion
Revenue in the budget Revenue to cover the
balance deficit of the Budget
- Taxes
- Charges and fees - Domestic and External
- Revenues from borrowings
economic activities of - Aids
the State
Revenues
Taxes
Tax is a compulsory financial charge by a governmental
organization in order to fund government spending and
various public expenditures
Revenues
Taxes classification
• Taxes on business activities.
• Taxes on products.
• Taxes on income.
• Taxes on assets.
• Taxes on state-owned properties.
Revenues
Charges and fees
• Charge is a fixed amount of money that an
organization or individual must pay when a state
agency carries out certain administrative
• procedures.
Fees: is a revenue that partially offsets the costs of
public services or offsets costs for maintenance and
repair activities of socio-economic infrastructure
works.
Expenditures

The State budget expenditures include spendings on socio-

economic development, on ensuring national defense,
security and operations of the State apparatus; on aids and
other spendings as stipulated by law.
Regular Development investment
1 2
expenditures expenditure
Expenditures
Regular expenditures
• Expenditures on economic, sociocultura,
education, medical, sports…
• State management expenditures
• National security expenditures
Expenditures
Development investment expenditures
• Construction of socio-economic infrastructure
• Capital investment for state-owned enterprises
• Joint venture capital contribution
• Development investment fund capital contribution
• State reserve
Key Terms
1. State Budget
2. Resource Mobilization
3. Macroeconomic Regulation and Control
4. Revenues
5. Expenditures
6. Development investment expenditure
7. Regular expenditures
 Quiz
The roles of State budget:
a. Resource Mobilization and Macroeconomic
Regulation and Control
b. Efficient allocation of resources and
Macroeconomic stabilization
c. Distribute and Monitor
d. Macroeconomic stabilization and
Macroeconomic Regulation and Control
 Quiz
The State budget revenues include revenues
from:
a. Taxes; Charges and fees
b. Taxes, Aids, National defense, Activities of the
State agencies, the agencies of the Communist
Party of Vietnam,
c. Taxes; Charges and fees, Revenues from
economic activities of the State, National defense,
Aids
d. Taxes, Charges and fees, Revenues from