Law Amending and Supplementing Certain Articles of the State Budget Law No. 06/1998/QH10

LAW

Amending and supplementing certain articles of the State Budget Law

Pursuant to the Constitution of the Socialist Republic of Vietnam in 1992;

This Law amends and supplements certain articles of the State Budget Law which was adopted at the ninth session of the Ninth National Assembly of the Socialist Republic of Vietnam on March 20, 1996,

Article 1

Amending and supplementing certain articles of the State Budget Law:

1. Clause 4 shall be amended and supplemented as follows:

"Article 4

The State budget includes the central budget and local budgets (local budgets) of various levels of local government. The relationship between budgets at different levels shall be implemented according to the following principles:

1. The central budget and the budget of each level of local government shall be allocated specific sources of revenue and expenditure responsibilities;

2. Supplementing from higher-level budgets to lower-level budgets shall be carried out to ensure fairness and balanced development among regions and localities. Such supplementary amounts shall be considered as revenues of the lower-level budgets;

3. In cases where a higher-level state management agency delegates a lower-level state management agency to perform its expenditure responsibilities, the former must transfer funds from the higher-level budget to the lower-level budget for such purposes;

4. Apart from the supplementary revenues and delegation of expenditure responsibilities stipulated in Clauses 2 and 3 of this Article, it is not allowed to use the budget of one level to fund the tasks of another level, except in special cases as prescribed by the Government."

2. Article 28 is amended and supplemented as follows:

"Article 28

Revenue sources of the central budget include:

1. Revenues of 100%:

a) Value-added tax on imported goods;

b) Export tax, import tax;

c) Special consumption tax, excluding special consumption tax collected on domestically produced goods such as cigarettes, paper money, paper offerings, and services related to nightclubs, massage parlors, karaoke bars; golf club membership sales and golf play tickets; casino operations; jackpot games; horse racing and car racing betting tickets;

d) Corporate income tax of units under full industry accounting;

d) Other taxes and revenues from oil and gas that must be paid into the central budget as prescribed by the Government;

e) Income from state capital contributions, recovery of state capital at economic establishments, recovery of state loans (both principal and interest), income from the state reserve fund;

g) Loans and non-repayable aid provided by foreign governments, organizations, and individuals to the Government as prescribed by law;

h) Various fees, charges, and other revenues paid into the central budget as prescribed by the Government;

i) Central budget surplus revenue;

k) Other revenues as prescribed by law.

2. The percentages of revenue allocation between the central budget and provincial budgets:

a) Value-added tax, excluding value-added tax prescribed in Point a Clause 1 of this Article;

b) Corporate income tax, excluding corporate income tax prescribed in Point d Clause 1 of this Article;

c) Income tax on high-income individuals;

d) Tax on income repatriation;

đ) Revenue from budget fund utilization;

3. Article 30 is amended and supplemented as follows:

"Article 30

Revenues of provincial budgets include:

1. Revenues of 100%:

a) Land rental fees;

b) Rent and sale proceeds from state-owned housing;

c) Stamp duty arising within district and urban districts; excluding stamp duty on houses and land;

d) Revenues from lottery activities;

đ) Non-repayable aid from organizations and individuals abroad directly provided to provinces as prescribed by law;

e) Various fees, charges, and other revenues paid into provincial budgets as prescribed by the Government;

g) Mobilization of funds from organizations and individuals for infrastructure construction as prescribed by the Government;

h) Voluntary contributions from organizations and individuals both domestically and abroad to the provincial budget;

i) Surplus revenues of provincial budgets;

k) Supplementary revenues from the central budget;

l) Other revenues as prescribed by law.

2. The percentages of revenue allocation between the central budget and provincial budgets as prescribed in Clause 2 of Article 28 of this Law. The specific decentralization of these revenues to local government budgets at various levels within the province shall be determined by the provincial level within the scope of its decentralization authority.

3. Revenues divided between the provincial budget, the district budget, and the commune and town budget according to percentages:

Land transfer tax;

Property tax;

Land use fee;

4. Revenues divided between the provincial budget, the district budget, and the commune, town, and ward budgets according to percentages:

a) Agricultural land use tax;

b) Resource tax;

c) Stamp duty on houses and land;

d) Special consumption tax on domestically produced goods such as cigarettes, paper money, paper offerings, and services related to nightclubs, massage parlors, karaoke bars; golf club membership sales and golf play tickets; casino operations; jackpot games; horse racing and car racing betting tickets.

For the revenues prescribed in Points a, b, c, and d of this Clause, local budgets shall enjoy 100%. The specific decentralization of these revenues to local government budgets at various levels within the province shall be determined by the provincial level; specifically, the percentage of agricultural land use tax allocated to village, town, and ward budgets shall be at least 20%."

4. Article 32 is amended and supplemented as follows:

"Article 32

Revenues of county budgets include:

1. Revenues of 100%:

a) Business license tax, excluding business license tax collected from individuals and small groups operating in communes and towns;

b) Slaughter tax collected from slaughterhouses in wards;

c) Fees and charges from activities managed by agencies under the county level;

d) Revenue from public service activities of units managed by the district;

đ) Non-repayable aid from organizations and individuals abroad directly to the district as prescribed by law;

e) Contributions from organizations and individuals for the construction of infrastructure projects as prescribed by the Government;

g) Voluntary contributions from organizations and individuals both domestically and internationally to the district budget;

h) Surplus of the district budget;

i) Supplement from the provincial budget;

k) Other revenues as prescribed by law.

2. The percentages of revenue allocation between provincial budgets, county budgets, and commune, town, and ward budgets as prescribed in Clauses 2, 3, and 4 of Article 30 of this Law.

3. Additionally, for cities directly under provinces, the allocation of stamp duty revenues, excluding stamp duty on houses and land arising within their territories, shall be made according to a percentage and they may establish investment funds as prescribed by the Government."

5. Article 33 is amended and supplemented as follows:

"Article 33

Expenditure responsibilities of county budgets include:

1. Recurrent expenditure on:

a) Economic, cultural, information, physical education and sports, social, and other public service activities managed by county-level agencies; separately, education, training, and health care according to provincial decentralization;

b) National defense, security, and public order and safety, assigned to the county level;

c) Activities of state agencies, Communist Party of Vietnam agencies, and political-social organizations at the county level;

d) Subsidies to social and social-professional organizations at the county level as prescribed by law;

đ) Other expenditures as prescribed by law;

e) In addition to the expenditure responsibilities prescribed in Points a, b, c, d, and đ of Clause 1 of this Article, cities directly under provinces also undertake additional expenditure responsibilities for managing, maintaining, and preserving public facilities and municipal services.

2. Development investment expenditure:

Investment in construction of economic and social infrastructure projects according to provincial decentralization. In the case of cities directly under provinces, there must be expenditure responsibilities for constructing national schools at all levels and public welfare facilities, street lighting, water supply and drainage, urban transportation, traffic safety, and urban sanitation.

3. Supplementary expenditure for lower-level budgets."

6. Article 34 is amended and supplemented as follows:

"Article 34

Revenues of commune and town budgets include:

1. Revenues of 100%:

a) Business license tax collected from individuals and small business groups;

b) Livestock slaughter tax;

c) Various fees, charges, and contributions to commune and town budgets as prescribed by law;

d) Revenue from the use of public land funds and other state asset profits;

đ) Funds from activities managed by commune-level administrative units;

e) Voluntary contributions to villages and towns;

g) Non-reimbursable aid from foreign organizations and individuals directly to villages and towns as stipulated by law;

h) Surplus revenue of commune-level and town-level budgets;

i) Supplement from higher-level budgets;

k) Other revenues as prescribed by law.

2. The percentages for dividing revenues among provincial budget, district budget, and commune/town/p ward budget shall be as specified in Clauses 2, 3, and 4 of Article 30 of this Law.

7. Clause 37 shall be amended and supplemented as follows:

"Article 37

Sources of revenue for ward-level budget include:

1. Revenues of 100%:

a) Various fees, charges, and contributions to community-level budgets as stipulated by law;

b) Livestock slaughter tax, excluding livestock slaughter tax collected from animal slaughtering enterprises;

c) Voluntary contributions from organizations and individuals to wards;

d) Non-reimbursable aid from foreign organizations and individuals directly to communities as stipulated by law;

đ) Surplus income of community-level budgets;

e) Supplement from higher-level budgets;

g) Other revenues as stipulated by law.

2. The percentages for dividing revenues among provincial budget, district budget, and commune/town/ward budget shall be as specified in Clauses 2 and 4 of Article 30 of this Law.

8. Clause 39 shall be amended and supplemented as follows:

"Article 39

The Government shall specify in detail the percentage for dividing revenues as stipulated in Clause 2 of Article 28 of this Law between the central budget and each provincial and centrally-administered city budget.

Based on the percentage specified by the Government for each province and centrally-administered city, the People's Committee at the provincial level shall specify in detail the percentage for dividing revenues as stipulated in Clauses 2, 3, and 4 of Article 30, Clauses 2 and 3 of Article 32 of this Law between the provincial budget and each district, town, and city under the province, and each commune, ward, and town.

The percentage for dividing revenues assigned to each level shall be stable for three to five years.

9. Article 40 shall be amended and supplemented as follows:

"Article 40

Additional funding from higher-level budgets to lower-level budgets for balancing revenue and expenditure, ensuring the implementation of economic and social tasks assigned, shall be determined based on calculations of revenue sources and expenditure tasks as stipulated in Articles 28, 29, 30, 31, 32, 33, 34, 35, 37, and 38 of this Law according to criteria such as population, natural conditions, economic and social conditions of each region, with particular attention to remote areas, border regions, revolutionary bases, ethnic minority regions, and difficult regions. This additional funding shall be stable for three to five years. Annually, in cases of inflation, based on the additional funding decided by the Standing Committee of the National Assembly and the rate of economic growth, the Government shall decide on an adjustment increase according to the inflation rate and the rate of economic growth when calculating additional funding for lower-level budgets.

10. Article 44 is amended and supplemented as follows:

"Article 44

1. Agencies and units responsible for revenue and expenditure must organize the preparation of budget revenue and expenditure plans within their assigned tasks and submit them to the financial authorities at the same level.

2. Local financial authorities at all levels shall examine the budget revenue and expenditure plans of agencies and units at the same level and the budget revenue and expenditure plans of subordinate local governments, consolidate and prepare local budget plans and allocation schemes to be submitted to the People's Committee at the same level.

3. The Standing Committee of the People's Council or the Chairman, Vice-Chairman of the People's Council shall examine the local budget plan prepared by the People's Committee at the same level to report to the superior administrative agency for consolidation and submission to the National Assembly.

After the State budget plan is decided by the National Assembly, based on the assigned revenue and expenditure tasks, the People's Committee shall be responsible for preparing the local budget plan and allocation scheme to be decided by the People's Council at the same level and reported to the superior administrative agency and the higher-level financial authority.

11. Article 50 is amended and supplemented as follows:

"Article 50

1. The National Assembly decides the State budget plan for the following year before November 30 of the current year.

2. In case the State budget plan has not been decided by the National Assembly, the Government shall re-prepare the State budget plan to be submitted to the National Assembly at the time decided by the National Assembly.

3. The People's Council shall base its decision on the local budget plan assigned by superiors, taking into account the revenue sources, expenditure tasks allocated to the locality, and existing policies and regulations, to decide on the local budget plan according to the time frame set by the Government.

12. Article 62 is amended and supplemented as follows:

"Article 62

During the process of executing the state budget, if there are changes in revenue and expenditure, the following shall apply:

1. Any surplus revenue and savings compared to the approved budget may be used to reduce the deficit, increase debt repayment, or to supplement the financial reserve fund and increase spending on necessary items as prescribed by the Government;

2. In case actual revenue does not meet the approved budget, the Prime Minister and the Chairperson of the People's Committee may adjust certain expenditure items accordingly, while reporting to the Standing Committee of the National Assembly and the National Assembly, and the People's Council at the same level during the nearest session;

3. In case there is an urgent need for expenditure outside the approved budget that cannot be delayed and the contingency fund is insufficient, the Prime Minister and the Chairperson of the People's Committee must rearrange the expenditures within the approved budget to have sufficient funds for the urgent need;

4. Annually, in case there is an increase in revenue from export taxes, import taxes, and special consumption taxes compared to the assigned revenue tasks, excluding the special consumption tax as stipulated in Clause 4 of Article 30 of this Law, the Government shall decide to allocate a portion of the increased revenue to the provincial budget for infrastructure construction projects and report to the Standing Committee of the National Assembly;

5. In case the State budget fund is temporarily short, the financial reserve fund must be used to address it. For the central budget, if the financial reserve fund is insufficient, the State Bank shall provide a temporary loan to the central budget according to the Prime Minister's decision.

Temporary loans from the financial reserve fund of various levels of budget and temporary loans from the State Bank for the central budget must be repaid within the fiscal year, except in special cases decided by the Prime Minister.

Article 2

This Law takes effect from the 1999 fiscal year.

Article 3

The Government shall amend and supplement detailed implementing regulations of the State Budget Law to be consistent with this Law./.

This Law was passed by the National Assembly of the Socialist Republic of Vietnam, the tenth session, third meeting, on May 20, 1998.