CIRCULAR

Guidelines for Implementing Resolution No. 1181 TVQH/K6

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 December 1, 1980 of the Standing Committee of the National Assembly and Directive No. 14-TTg dated January 16, 1981 of the Prime Minister on slaughter tax.

To implement Resolution No. 1181 TVQH/K6 dated December 1, 1980 of the Standing Committee of the National Assembly amending Article 4 of the Ordinance dated June 23, 1980 of the Standing Committee of the National Assembly on slaughter tax and Directive No. 14-TTg dated January 16, 1981 of the Prime Minister, the Ministry of Finance provides specific guidelines as follows:

1. IT IS NECESSARY TO GRASP THE MEANING OF THE NEW AMENDMENTS ON SLAUGHTER TAX:

Slaughter tax is a type of tax levied on the slaughtering of livestock with the aim of contributing to the encouragement of livestock development, promoting the fulfillment of obligations to sell products to the State, strengthening market management, managing slaughtering activities, and ensuring food hygiene.

In accordance with Directive No. 202-TTg dated June 25, 1980 of the Prime Minister, Circular No. 07 dated June 30, 1980 of the Ministry has guided the principles for determining weight and price for calculating tax as the basis for setting tax rates per head of pig, buffalo, cattle, and slaughtered meat.

After a period of implementation, it was observed that setting five levels of pig weight had the effect of encouraging livestock breeding and releasing animals with higher weights; however, under current conditions, the value of livestock products is implemented at various prices (direct purchase prices, negotiated prices for the State, free market prices), and there are significant differences between them. Relying solely on direct purchase prices for determining tax rates makes contributions when slaughtering livestock for consumption or selling on the free market unfair, and does not effectively encourage selling products to the State and conserving consumption.

To enhance the effectiveness of the slaughter tax, redistribute income, and support procurement work, increase market management, the resolution of the Standing Committee of the National Assembly dated December 1, 1980 amended as follows: "the slaughter tax on buffalo, cattle, and pigs is levied at a rate of 10% of the value of the animal based on current prices"; therefore, from now on, the price for calculating the slaughter tax on livestock killed by producers, traders, or consumers is the average price on the free market and determined by the People's Committee of provinces and cities during each period.

The reduction of 25% of the slaughter tax for livestock breeders from now on will be calculated based on the total tax of all slaughtered animals, not just on the portion of meat left for personal use as previously stipulated in Directive No. 202-TTg dated June 25, 1980.

2. SOME POINTS REGARDING POLICY IMPLEMENTATION:

To implement these supplements and amendments, the Ministry provides specific guidance as follows:

a) Except for state-owned commercial enterprises engaged in food trade which are exempt from paying the slaughter tax, all individuals or organizations (enterprises, administrative units, military units, cooperatives, groups...) must pay the slaughter tax to the State when slaughtering livestock (pigs, buffalo, cattle).

b) Regarding the determination of tax rates for individual or organizational self-slaughtered livestock:

Tax rates are still calculated per head based on weight and specified prices.

For pigs: Based on the five weight levels specified in Circular No. 07 dated June 30, 1980 of the Ministry multiplied by the tax calculation price. The People's Committee of provinces and cities determine the tax calculation price for each three-month or six-month period based on the average price of live pigs per kilogram on the free market; generally, only one price is set for the entire province or city; if there are significant price differences between regions within a province or city, up to two prices can be set. When prices fluctuate by more than 30% above or below the specified tax calculation price, the tax calculation price and tax rates must be adjusted.

For buffalo and cattle: To protect the buffalo and cattle draft and breeding herds, strengthen management and control over buffalo and cattle slaughtering, and simplify tax calculations while aligning with actual circumstances (many areas lack a free market for buffalo and cattle meat), the Ministry adjusts the three slaughter tax rates for buffalo and cattle specified in Circular No. 07 dated June 30, 1980 to 100 dong, 110 dong, and 120 dong per head of slaughtered livestock. Provincial and municipal People's Committees base their announcements of tax rates for local buffalo and cattle breeds on local livestock breeding conditions; the setting of tax rates should encourage buffalo and cattle breeding and limit the slaughtering of breeding and draft buffalo and cattle and calves.

c) Regarding the 25% tax reduction for individuals and units breeding and slaughtering livestock:

- The 25% reduction in slaughter tax for individuals and units breeding and slaughtering livestock applies to both pigs, buffalo, and cattle and is calculated based on the total tax of all animals.

- If these are cooperative groups or households with the obligation to sell livestock to the State, they must fulfill this obligation before being eligible for the tax reduction. Determination of fulfillment of this obligation is conducted by the People's Committee of communes when deciding to allow the slaughtering of livestock.

- If these are breeding units that have signed bilateral contracts with the State (buying feed, goods, materials from the State and selling livestock products according to contract prices), they must fully comply with the contract to be eligible for the tax reduction.

- For breeding units without the obligation to sell livestock to the State (non-agricultural households in urban or rural areas, individuals or collectives of cadres, workers, and officials in agencies, farms, factories, and military units) who have utilized available resources to engage in breeding, no condition of fulfilling the obligation to sell products to the State is required to be eligible for the tax reduction.

- It must be livestock raised for four months or longer, and with a necessary consumption requirement for slaughtering approved by the People's Committee of communes or wards to be eligible for the tax reduction.

d) Regarding the allocation of tax revenue to commune budgets:

Commune budgets will receive 15% of the tax revenue from slaughtering meat and immediately allocate this amount from the collected taxes, while 85% is remitted to the State budget. The People's Committee of communes will allocate part of the 15% allocated to the commune budget to compensate those entrusted with collecting the slaughter tax (if applicable). The level of compensation is determined by the People's Committee of communes based on the effort contributed by the person entrusted with collecting the tax.

e) Regarding state-owned commercial enterprises engaged in food trade:

Directive 14/TTg dated January 16, 1981 of the Prime Minister amended Directive 202/TTg dated June 25, 1980 as follows:

"State-owned commerce is exempt from slaughter tax.

To encourage localities to actively purchase and deliver pork, beef, and buffalo meat to the central government, the local budget shall benefit from an incentive revenue equal to 10% of the state-guided purchase price for products delivered to the central government."

Regarding the implementation format of this amended provision, the Ministry will issue a circular to provide specific guidance.

3. ON ORGANIZATION AND IMPLEMENTATION:

Implementing well the amendments on slaughter tax will enhance the effectiveness of support taxes for purchasing and distributing income fairly and reasonably; however, there are also complex difficulties, therefore requiring the People's Committees of provinces, cities, and special zones to pay attention.

a) Organize price monitoring in the local market to accurately determine the taxable price and tax rate per head for each period; implement the regulations on reduced tax for livestock farmers who slaughter animals; direct all levels and sectors to uniformly implement the new amendments.

It is necessary to do a good job of publicizing and disseminating the slaughter tax policy in conjunction with the development of animal husbandry policies, stabilizing the obligation to sell products to the state, managing slaughtering activities, and regulating the market.

Special emphasis should be placed on explaining the policy, making all levels and sectors clearly understand the significance of the newly amended points in the slaughter tax as being reasonable and appropriate, thereby encouraging enthusiastic implementation, closely combining with efforts to promote the development of animal husbandry, stabilize the obligation to sell products to the state, intensify purchasing to secure sources of goods, and regulate the food market.

b) Direct the commerce sector to reorganize the distribution network for food products in accordance with the spirit of Article 5 of Decision 311-CP of the Council of Ministers, ensuring that state-owned commerce and cooperative commerce hold the overwhelming majority of the business in pork and beef, managing slaughterhouses; in cities, towns, and market towns, the business of pork and beef and management of slaughterhouses shall be handled by state-owned commerce; in villages, the business of pork and beef shall be handled by cooperative trade, under the supervision of the Village People's Committee. In places where state-owned commerce and cooperative trade have not yet met consumer needs, the Provincial or City People's Committee may allow traders to engage in slaughtering and selling meat. Meat sellers must be subject to state management, must have a business registration permit, pay taxes fully, and prevent tax evasion and smuggling.

c) Direct the finance-tax sector to take practical measures to address the significant loss of revenue in the three areas of rural, urban, and forestry-rural-industrial enterprises, and military units. In rural areas, it is necessary to rely on grassroots authorities, focusing on publicity and education, combining the permission to slaughter with tax collection and implementing tax exemptions and reductions according to policy for livestock farmers. In cities and towns, it is necessary to closely combine with measures to manage slaughterhouses, ensure veterinary hygiene procedures for food safety, issue business registration permits to individuals (in places where state-owned commerce has not met social needs), manage the market to control slaughter taxes and other types of turnover taxes. For forestry-rural-industrial enterprises and military units, it is necessary to focus on widely publicizing the policy, ensuring that responsible officials in these units understand and rely on grassroots authorities in their respective locations to collect sufficient slaughter taxes and record slaughtered animals.

Alongside the dissemination and organization of policy implementation, it is necessary to strictly enforce inspections and controls to promptly identify violations such as slaughtering animals without complying with veterinary hygiene standards, selling food without business registration, arbitrarily slaughtering animals, and evading or smuggling slaughter taxes, so as to appropriately handle these issues, bring animal slaughtering under strict management, and fully leverage the effectiveness of the newly amended slaughter tax./.