Circular No. 06/2000/TT-BTC guiding the implementation of certain points on policies and measures for managing the state budget estimate in 2000.

CIRCULAR

Guidelines for implementing certain points on policy and measures,

 regulating the state budget estimate for the year 2000

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Pursuant to Resolution No. 24/1999/QH10 dated November 29, 1999 of the National Assembly, tenth session, sixth meeting, regarding the state budget estimate for 2000;

Pursuant to Decision No. 240/1999/QĐ-TTg dated December 29, 1999 of the Prime Minister on the allocation plan and state budget estimate for 2000;

Pursuant to Decision No. 03/2000/QĐ-TTg dated January 4, 2000 of the Prime Minister on the reward mechanism and regranting of excess revenue from tax collection in 2000 to local budgets;

Pursuant to Directive No. 17/1999/CT-TTg dated June 30, 1999 of the Prime Minister on the construction of development plans and state budget estimates for 2000;

The Ministry of Finance provides guidelines for certain points on policy and measures for managing the state budget in 2000 as follows:

I. ON THE GRADING OF REVENUE AND EXPENDITURE TASKS:

1- In addition to the expenditure tasks already decentralized to localities in 1999, from 2000 onwards, the following expenditure tasks will be transferred from the central budget to the local budget:

1.1- Expenditure to ensure the operation of state management bodies of:

- Local settlement machinery;

- Financial enterprise management units and capital investment development management units under the provincial Department of Finance and Prices;

- Machinery for managing industrial zones and export processing zones (excluding the Management Board of the Dung Quat Industrial Zone, the Management Board of export processing and industrial zones in Ho Chi Minh City).

1.2- Expenditure for land survey level I and II; mapping of cadastral maps in areas without aerial photographs; detailed mapping of cadastral maps after having aerial cadastral maps.

1.3- Investment expenditure for infrastructure and projects aimed at stabilizing production and living conditions in lake areas from water resource taxes collected from provinces such as Yen Bai, Kon Tum, Gia Lai, Dak Lak, Lam Dong, Binh Phuoc.

2- Balancing sources within the local budget expenditure estimate:

2.1- Investment and capital support for state-owned enterprises in the locality.

2.2- Subsidies for health workers at commune and village levels in mountainous, highland, and island areas.

3- Continue to implement mechanisms for using certain revenues to invest in building infrastructure and developing the economy and society of the locality:

3.1- All revenues from land use fees and land lease fees, including land lease fees from foreign-invested enterprises (except land lease fees from oil exploration and exploitation activities managed by the central government) shall be used for infrastructure investment, cadastral surveys, land inventory, land transfer, adjustment of land changes, etc.

3.2- All revenues from the sale of state-owned housing shall be used for developing the housing fund and constructing infrastructure facilities in residential areas such as water supply and drainage systems, street lighting, public sanitation facilities, etc.

3.3- Using lottery revenues to invest in new, upgrade, and repair educational, healthcare, and social welfare facilities according to the principles applied in 1999.

3.4- Agricultural land use tax shall be used for agricultural and rural development and land management, including investments in building, repairing, and cementing irrigation works, field channels, embankments, fishery stations, agricultural extension services, introducing advanced science and technology into production and processing of agricultural and forest products, adjusting crop and livestock structures, land surveys, land inventories, issuing land use rights certificates, supporting hydropower enterprises, etc.

3.5- Forest resource tax, including standing tree sales revenue (if any), shall be fully used for investment, encirclement protection, forest conservation, afforestation, forest improvement, forestry promotion, scattered planting, forest area measurement, forest inventory, issuance of forest land use rights certificates, etc.

3.6- Advertising revenue from television: Shall be fully used according to the decentralization regulations to invest in upgrading, improving, repairing, and purchasing equipment for television stations as stipulated in Circular No. 81 TC/HCSN dated December 23, 1996 of the Ministry of Finance.

The classification, management, and reporting of the use of these revenues shall be carried out in accordance with Point 2 - Part I - Circular No. 190/1998/TT-BTC dated December 31, 1998 of the Ministry of Finance.

4- Stabilizing revenue sources and rewarding excess revenue for local budgets:

4.1- Based on the state budget estimate for 2000 assigned by the Prime Minister, stabilize revenue sources and the distribution ratio between the central budget and each province's and centrally-administered city's budget.

4.2- To encourage localities to strengthen revenue guidance and management, continue to implement the reward mechanism for exceeding the assigned budget estimate in 2000 to provide additional funding for localities to increase investment in building economic and social infrastructure, fulfill important and urgent tasks arising locally. Specifically:

- For revenues eligible for rewards under the State Budget Law:

+ For domestic special consumption tax (excluding the portion allocated to local budgets according to decentralization): Reward 100% of the excess revenue over the assigned estimate by the Prime Minister.

+ For export tax, import tax, and special consumption tax on imported goods: For excess revenue over the assigned estimate up to 20 billion VND, reward 100%; for excess revenue above 20 billion VND, reward an additional 50% of the excess amount but the total reward shall not exceed 50 billion VND.

The conditions and principles for awarding bonuses shall be implemented in accordance with the provisions of Circular No. 105/1999/TT-BTC dated August 30, 1999 of the Ministry of Finance, Clause 6 Part IV of Circular No. 103/1998/TT-BTC dated July 18, 1998 of the Ministry of Finance.

- For revenues divided between the central budget and local government budgets:

In addition to revenues eligible for bonus consideration under Circular No. 105/1999/TT-BTC dated August 30, 1999 of the Ministry of Finance, the value-added tax on domestic production and business activities (excluding value-added tax from television advertising and lottery activities) shall also be considered for bonus.

The bonus rate: fifty percent of the amount exceeding the revenue target assigned by the Prime Minister of the total revenues divided between the central budget and local government budgets actually submitted to the central budget.

The conditions and principles for awarding bonuses shall be implemented in accordance with the provisions of Circular No. 105/1999/TT-BTC dated August 30, 1999 of the Ministry of Finance.

- The above bonuses shall be used for investment in economic and social infrastructure, implementation of important and urgent tasks arising at the local level, prioritizing the construction of infrastructure in areas with many difficulties, water conservancy, agriculture, education and training, science and technology, and the environment, etc.

The reporting and proposal for bonus extraction shall be carried out as prescribed in Point 6.3 Clause 6 Part IV - Circular No. 103/1998/TT-BTC dated July 18, 1998 of the Ministry of Finance. Excess bonuses shall be accounted for and settled into the State Budget for the year 2001.

II/ ON REVENUE:

Based on the revenue targets assigned by the Prime Minister, ministries, central agencies, provinces, centrally-administered cities, and the General Department of Customs need to promptly perform well the work of assigning revenue budgets to subordinate units. The minimum assignment level must equal the target assigned by the Prime Minister and should aim to increase revenue targets by at least three percent compared to the Prime Minister's assigned target.

To achieve and exceed revenue targets, within their scope and authority, all levels and sectors need to take practical measures:

1- Focus on directing revenue collection work right from the beginning of the year. Actively resolve difficulties and obstacles to stabilize production and business operations. Effectively implement government stimulus measures to boost product sales and stimulate business development. Implement comprehensive tax management measures to prevent tax evasion, smuggling, and trade fraud, reasonably protect domestic production and business operations.

2- Conduct mid-year reviews and evaluations of the implementation of new tax laws, particularly value-added tax. On this basis, propose timely solutions to difficulties and obstacles to create favorable conditions for business development. Complete tax refunds for enterprises, exempt and reduce certain taxes, and refund corporate income tax for non-state institutions when implementing socialized educational, health, cultural, etc., activities according to regulations without hindering production and business activities, creating favorable conditions for educational, health, cultural, etc., undertakings to develop.

3- Based on the results of state-owned enterprise inventory, understand the financial situation of enterprises, promote the restructuring of state-owned enterprises, firmly implement shareholding reforms to raise additional capital for production and business development, address employment and income issues for workers, focus capital on effective enterprises operating in export and agricultural product processing fields, etc. Implement various forms of enterprise conversion according to the Government Decree No. 103/1999/NĐ-CP dated September 10, 1999 to enhance internal strength, generate economic benefits, and increase revenue for the budget.

4- For small-scale production and business households, re-determine reasonable tax rates, announce stable and publicize tax rates every six months to one year; simultaneously control and penalize those who deliberately evade taxes.

5- Provincial People's Committees need to promptly implement:

- Properly implement policies of tax exemption and reduction for land use in agriculture for policy beneficiaries, poor households, extremely difficult poor communes, and farmers affected by natural disasters and floods according to the National Assembly and Government's guidelines.

- For Central provinces affected by natural disasters and floods, based on the extent of damage, provincial People's Committees decide specifically on tax exemptions and reductions for aquaculture, salt-making activities for farmers and fishermen in disaster-stricken areas. Tax exemptions and reductions must ensure fairness and reasonableness among different groups and regions.

Provinces and cities need to proactively balance sources to ensure that districts and communes are not affected financially due to implementing tax exemptions and reductions according to policy, ensuring that the regular expenditure level (excluding new policies) of districts and communes does not fall below the budget target for 1999 assigned by the competent authority.

6- Strengthen management over special revenue, fees, and charges, following the guidance provided in Government Decree No. 04/1999/NĐ-CP dated January 30, 1999 on fees and charges under the state budget and Circular No. 54/1999/TT-BTC dated May 10, 1999 of the Ministry of Finance guiding the implementation of Government Decree No. 04/1999/NĐ-CP. For fees and charges not covered by the aforementioned Decree No. 04/1999/NĐ-CP, the Chairman of the Provincial People's Committee shall guide the implementation according to their authority based on the actual situation of the locality.

III/ ON EXPENDITURE FROM THE BUDGET AND ECONOMY IN EXPENDITURE:

1- Regarding budget expenditure:

1.1- Pursuant to the targets set forth in the Government's Ordinance, the Ministries, central agencies, and People's Committees of provinces and centrally-administered cities shall implement the allocation of the 2000 state budget expenditure plan for subordinate units in accordance with the provisions of the State Budget Law and guiding documents. In cases where the People's Council has not decided on the budget, the People's Committees of provinces and centrally-administered cities shall report to the Ministry of Finance before February 29, 2000, the proposed detailed distribution plan to be submitted to the People's Council.

1.2- For Ministries and central agencies with subordinate units located in areas affected by floods, priority should be given to funding sources to address flood aftermaths. Ensure the effective implementation of important tasks assigned, those with established policies and decisions of the Prime Minister; minimize conference expenses, avoid unnecessary purchases of expensive work equipment, and only allocate travel funds according to authorized decisions.

1.3- When deciding on local budgets, localities need to allocate the expenditure budget at the level assigned by the Prime Minister; do not allocate expenditures based on revenue targets, so that if revenues increase during the management process, additional resources can be used to address unexpected expenditure tasks such as natural disasters, famine relief, etc.

The allocation of the budget needs to focus on prioritizing funding for key areas, tasks, and critical objectives as follows:

- In addition to the central government's allocated resources, localities must mobilize local resources, aid, etc., to address the aftermath of natural disasters and floods, such as constructing and repairing water conservancy, agricultural, school, and hospital facilities, ensuring sufficient seeds and livestock to restore production and support the livelihood and business operations of people in disaster-stricken areas.

- Concentrate capital on developing agriculture and rural economies, tasks such as building commune centers, Program 135, etc., in mountainous, highland, border, island, and particularly difficult regions.

- In regular spending, prioritize education and training, science and technology, and environmental protection as per the Central Resolution II, ensuring they are not lower than the targets announced by the Ministry of Finance.

- Proactively arrange and settle budget debts (both principal and interest) due for repayment within the year to maintain fiscal health.

- Allocate budget reserves at each level of the budget as stipulated by the State Budget Law (from 3 to 5% of total budget spending) and reserve financial resources at the provincial level at a necessary level to proactively respond to potential sudden developments.

1.4- Ministries, central agencies, and People's Committees at all levels, and budget-using units must strictly implement the policy of financial and budget transparency as prescribed in Decision No. 225/1998/QĐ-TTg dated November 20, 1998, of the Prime Minister and guiding Circulars of the Ministry of Finance.

1.5- Based on the allocated expenditure budget, primary budget units must allocate and assign detailed budgets to secondary budget units (level III) according to the State Budget Structure. In case of difficulties, at least the following 11 main expenditure items must be detailed:

+ Salaries (Item 100).

+ Allowances (Item 102).

+ Scholarships for students (Item 103).

+ Bonuses (Item 104).

+ Contributions (Item 106).

+ Office supplies (Item 110).

+ Conferences (Item 112).

+ Regular maintenance of fixed assets serving professional work and maintenance of infrastructure projects (Item 117).

+ Major repairs of fixed assets serving professional work and infrastructure projects (Item 118).

+ Professional operation costs (Item 119).

+ Purchase of fixed assets for professional work (Item 145).

If primary budget units cannot directly allocate to tertiary budget units, they may authorize secondary budget units to allocate to tertiary budget units, but the primary budget unit remains responsible for summarizing the allocation results and submitting them to the same-level finance authority for review. Within 15 days, if the finance authority does not provide feedback, it will be considered accepted.

The issuance of budget limits is carried out according to approved budgets and the State Budget Structure. In the short term, if the finance authority and treasury have not issued detailed allocations according to all expenditure items, they must issue at least according to the 11 main expenditure items as stipulated in Clause 1.4 - Point 1 - Part III of this Circular. When announcing limits, in addition to the main items, other items are combined into Item 134 "other expenses." When spending, budget-using units can withdraw from Item 134 to cover other expenses and record and settle accounts according to the items in the State Budget Structure.

1.6- For the issuance of central budget delegation limits, when announcing, the Ministry of Finance may not detail all 11 main expenditure items, combining the remaining items into Item 134 "other expenses," but when distributing budget delegation limits, the Department of Finance and Prices must detail at least the 11 main expenditure items as stipulated in Clause 1.4 - Point 1 - Part III of this Circular.

1.7- Budget units need to actively spend according to approved budgets. Finance authorities and State treasuries at all levels are responsible for ensuring funding for expenditure tasks with adequate conditions for disbursement. For the fourth quarter budget, finance authorities and State treasuries will advance funds to allow budget units to spend promptly, avoiding capital chasing and limiting the transfer of funds to the next year.

1.8- In cases where budget units need to adjust detailed budgets (adjustments between expenditure items), they must follow the regulations in Point 8 - Part IV of Circular No. 103/1998/TT-BTC dated July 18, 1998, before November 15.

1.9- During the implementation and management of the budget:

- Ensure expenditure is directed towards the intended objectives, correct recipients, and in accordance with approved budgets. The State Treasury shall cooperate with financial authorities at the same level to strictly control expenditures in compliance with regulations. Heads of Ministries, agencies equivalent to Ministries, government agencies, central Party organs, mass organizations, Chairpersons of People's Committees at all levels, and heads of agencies and grassroots units are responsible for managing and using state budget funds effectively. Expenditures recorded in the budget and having guaranteed revenue sources may not be arbitrarily reduced by Ministries, sectors, and localities. Financial authorities at all levels are responsible for disbursing funds according to the progress of work implementation, avoiding concentration of disbursements at the end of quarters or years (including supplementary disbursements to lower-level budgets). In cases where revenues fall short of the budget, each level of budget must proactively rearrange expenditures, reduce them accordingly, prioritizing reductions in non-essential items first. If revenues increase, the additional revenues should be used to increase expenditures, prioritizing water resources, agriculture, education and training, science and technology, culture, and other essential spending areas.

- The surplus of the state budget for the year 1999 at all levels of local administrative authorities shall be handled in accordance with the provisions set out in Point 8 - Part V - Circular No. 103/1998/TT-BTC dated July 18, 1998, issued by the Ministry of Finance; of which the portion allocated to state budget revenue for the year 2000 shall not be immediately allocated to expenditure tasks but reserved to increase reserves to proactively address important and urgent tasks arising at the local level.

1.10- Agencies and units using state budget funds must prepare quarterly expenditure budgets (divided by month), submit final reports or usage status of funds to the same-level financial authority in accordance with the provisions of the Law Amending and Supplementing Certain Provisions of the State Budget Law; in cases where there is no report from the previous quarter, the financial authority has the right to suspend disbursement of the next quarter's budget (except for salary-related payments) until these units provide the report.

1.11- For unexpected tasks outside the plan, Ministries, sectors, localities, and units must proactively arrange expenditures within the scope of their revenue sources and total allocated funds, except in cases of severe natural disasters on a large scale.

1.12- Regarding investment expenditures for construction and development, management and disbursement of capital shall be carried out in accordance with Decree No. 52/1999/NĐ-CP dated July 8, 1999, issued by the Government. In allocating and disbursing capital, priority shall be given to projects in the fields of water resources, agriculture, education and training, etc. The entire portion of additional investment expenditures for construction and development concentrated domestically due to tax exemptions and reductions on agricultural land use shall be allocated for agricultural investment and rural development.

2- On target programs:

In addition to the central government budget transfer, localities need to proactively arrange their budgets to supplement resources to effectively fulfill economic and social development tasks in their respective areas.

The organization of fund management, allocation, and integration of program targets will be separately guided.

3- On cost savings:

Strictly implement the Decree on Thrift and Prevention of Waste, using state budget funds economically and efficiently; Decision No. 122/1999/QĐ-TTg dated May 10, 1999, issued by the Prime Minister, regarding vehicle standards and quotas for administrative and public service agencies and state-owned enterprises, and Decision No. 208/1999/QĐ-TTg dated October 26, 1999, issued by the Prime Minister, amending and supplementing Decision No. 122/1999/QĐ-TTg; Directive No. 32/1999/CT-TTg dated October 29, 1999, issued by the Prime Minister, on improving content, methods, enhancing effectiveness, and thoroughly practicing thrift in organizing meetings and conferences, and guiding documents of the Ministry of Finance.

3.1- Ministries, central agencies, and localities need to proactively arrange, allocate, and reasonably adjust existing office spaces and equipment to serve assigned tasks well. Minimize new office constructions. Purchasing small cars for work purposes must be based on vehicle standards and quotas and budget capacity, avoiding situations where car purchases lead to cuts in essential spending tasks.

3.2- Ministries, sectors, localities, and agencies have the responsibility to implement and supervise the correct application of state policies and expenditure regulations. Administrative and public service agencies are strictly prohibited from independently formulating and implementing expenditure systems outside state regulations.

3.3- Based on the announced support level from the state budget, General Corporations are responsible for reorganizing public services activities (training, healthcare, scientific research, economic services) and accounting for costs of these activities in production and business expenses according to prescribed regulations.

3.4- Ministries, sectors, localities, and units using state budget funds should proactively implement measures to save costs, creating favorable conditions for agencies and units to apply cost-sharing for certain items over several years to encourage reduction in staff numbers and efficient use of funds. Organize well the mobilization of non-budgetary resources and socialization of educational, health, cultural, and other activities to reduce burdens on the state budget while promoting the development of these public services.

3.5- Fully and promptly address recommendations from inspection, audit, and national audit agencies regarding financial and budgetary matters. For recommendations with differing opinions, Ministries, sectors, localities, and agencies should proactively coordinate with competent authorities to resolve them conclusively.

IV. IMPLEMENTATION:

This Circular takes effect from the date of issuance. Ministries, sectors, provincial and centrally-administered city People's Committees shall base this Circular to guide agencies, units, and local administrative authorities at all levels in its implementation.