Circular No. 06/2002/TT-BTC guides the implementation of certain points on policy and measures for managing the state budget estimate for 2002.

CIRCULAR

Guidelines for implementing certain points on policies and measures
Article to manage the state budget for the year 2002

Based on Resolution No. 50/2001/QH10 dated December 27, 2001 of the National Assembly, Session 10, regarding the state budget for the year 2002;

Based on Decision No. 196/2001/QĐ-TTg dated December 27, 2001 of the Prime Minister concerning the allocation and state budget for the year 2002;

The Ministry of Finance guides certain points regarding the policy and measures to manage the state budget for the year 2002 as follows:

I. Allocation and assignment of revenue and expenditure budgets of the state budget

Based on the state budget revenue and expenditure plan assigned by the Prime Minister, ministries, central agencies, provinces, centrally governed cities, and the General Department of Customs need to promptly implement the work of assigning revenue and expenditure tasks to subordinate units and lower levels; to be completed at the latest by January 2002. In cases where the People's Council of the province has not yet approved the state budget, the People's Committee of the province needs to have a temporary budget allocation plan for units to implement.

To increase autonomy for lower-level authorities, in 2002, the central government will only assign a number of key revenue and expenditure indicators including:

Total state budget revenue in the locality, including detailed items related to bonus revenue;

Total local state budget expenditure, including detailed tasks such as investment construction capital (domestic and foreign funds), education and vocational training expenses, science and technology and environmental expenses, local budget reserves;ofAdditional funding from the central budget to balance the local budget;

Expenditure to achieve national goals; expenditure to implement the five million hectare forestation project and other specific tasks and objectives.

The remaining indicators and the specific allocation of expenditure tasks (including national program objectives)

shall be decided by the provincial People's Council. At the same time, there should be guidance and mechanisms for monitoring and controlling to ensure that lower-level budget allocations are consistent with the orientation and objectives determined by the higher-level People's Council.At the same time, there shall be guidelines and mechanisms for monitoring and supervision to ensure that the budget allocation at lower levels is in line with the directions and objectives determined by the People's Council at the higher level.

1. Regarding state budget revenue

The state budget revenue target assigned by the Prime Minister is the minimum level; ministries, central agencies, and localities need to set targets for subordinates and units not lower than those achieved in 2001 and increase by at least 3% compared to the government's assigned level.

In 2002, agricultural land use tax exemption will be implemented for poor households (as defined in Decision No. 1143/2000/QĐ-LĐTBXH dated November 1, 2000 of the Ministry of Labor, Invalids, and Social Affairs), households with agricultural production land in communes under the Government's Program 135; For the remaining households, a 50% reduction in the agricultural land use tax payable in the following year after deducting the exempted tax according to policy (if applicable).

The implementation of agricultural land use tax exemptions as stipulated above shall only apply to the area of agricultural production land within the limit (land limit as prescribed by the Land Law), the excess area of agricultural production households still must pay taxes according to current regulations. Specifically, agricultural production households identified as poor households (as defined in Decision No. 1143/2000/QĐ-LĐTBXH dated November 1, 2000 of the Ministry of Labor, Invalids, and Social Affairs) shall be exempted from agricultural land use tax on all land they use.

No collection of capital usage at state-owned enterprises; these enterprises must use this capital for development investment, technological innovation, reducing product costs, and enhancing market competitiveness.

2. Regarding state budget expenditure

Based on the assigned sources of revenue and expenditure tasks, on the basis of tapping into revenue sources and preventing revenue loss, ministries, central agencies, and localities need to reasonably arrange expenditure tasks, prioritizing investment for development, ensuring counterpart funds for ODA projects, investment preparation funds, disaster prevention and mitigation projects; economic public service expenditures, focusing on seed projects, agricultural extension services, forestry, fishery, and salt industry; planning and land use map creation and issuance of land use right certificates; tasks related to tourism development, trade promotion, encouraging financial and real estate market development; education, training, and scientific research investments; investments in areas with many difficulties;...

Adequate resources must be allocated to repay maturing debts (infrastructure construction debts, loans for solidifying irrigation channels,...); while implementing measures to correct, closely monitor, and control borrowing and loan usage in units and lower levels, ensuring that all loans are used for their intended purposes and repaid on schedule.

3. Regarding local budget balancing

3.1. Regarding the division of revenue sources and expenditure tasks:

In 2002, continue to stabilize revenue sources, the proportion of revenue redistribution, and expenditure tasks between the central budget and local budgets as in 2001. Specifically, for infrastructure investment programs in sports and aquaculture development in 2001 which were balanced in the local budget, in 2002, they will be arranged in the central budget and supplemented with targeted funding from the central budget to the local budget.

3.2. In 2002, continue to implement the mechanism of reinvestment by localities from certain revenue sources (agricultural land use tax, land use fees, land rental fees, lottery proceeds,...) for infrastructure construction and socio-economic development in the locality as in 2001.

The division, management, and reporting of the use of these revenue sources shall be carried out in accordance with Point 3, Part I of Circular No. 06/2000/TT-BTC dated January 18, 2000 of the Ministry of Finance.

3.3. The revenue of local government budgets in 2002 is determined based on:

The percentage (%) distribution of revenue sources between the central budget and local budgets remains stable according to the decision of the Prime Minister assigned in 2000 and 2001.

Any additional funding from the central budget to balance the local budget (if any) shall be increased by 3% compared to the balancing supplementary amount in 2001 (after excluding the entire or part of the supplementary amount for certain specific tasks and policies).

3.4. Additionally, in 2002, the central government will also provide support to localities to implement certain tasks, systems, and policies. Specifically, as follows:

a) Support for public affairs capital:

Support for implementing certain tasks to develop the economy and society of mountainous provinces and the Central Highlands according to Decisions No. 168/2001/QĐ-TTg dated October 30, 2001 and No. 186/2001/QĐ-TTg dated December 7, 2001 of the Prime Minister.

Support for policies towards teachers and educational management staff working at specialized schools in areas with particularly difficult economic and social conditions according to Decree No. 35/2001/NĐ-CP dated July 9, 2001 of the Government.

Support for regional allowances and special allowances in difficult areas according to Circular Joint No. 03/2001/TTLT-BLĐTBXH-BTC-UBDTMN dated January 18, 2001 of the Ministry of Labor, Invalids and Social Affairs - Ministry of Finance - Committee for Ethnic Minorities and Mountainous Areas and Circular Joint No. 04/2001/TTLT-BLĐTBXH-BTC dated January 18, 2001 of the Ministry of Labor, Invalids and Social Affairs - Ministry of Finance.

Support for seed projects aimed at quickly restructuring agriculture and developing rural areas.

For the above support items, the central government does not organize individual reviews for each subject or specific task. Localities base their decisions on central government regulations, policies, support levels, and local conditions for specific tasks. For the support related to seed programs, localities must develop project proposals. The central government will only provide support to localities after receiving registered lists of approved project proposals to ensure objectives are met and implementation is effective.

Support for the development and broadcasting coverage of radio and television in underdeveloped regions.

Support for households in particularly difficult ethnic minority areas according to Decision No. 138/2000/QĐ-TTg dated November 29, 2000 of the Prime Minister.

Support for salt production areas. To ensure implementation according to objectives and effectiveness, the Ministry of Finance will only distribute funds after localities have registered specific project lists approved by competent authorities.

b) Support for investment capital for basic construction:

In addition to the tasks already supplemented in 2001 (investment in border gate areas, reservoirs, and some tasks decided by the Prime Minister), in 2002 additional tasks were added to achieve new goals and responsibilities:

Investment in tourism infrastructure;

Investment in ship anchorage facilities to avoid storms;

Investment in flood control zones of the Day River and delayed flooding;

Support for salt production development according to Decision No. 153/1999/QĐ-TTg dated July 15, 1999 of the Prime Minister;

Investment in building residential clusters in flood-prone areas of the Mekong Delta according to Decision No. 1548/QĐ-TTg dated December 5, 2001 of the Prime Minister.

Based on the financial support provided by the central government for the above tasks, localities should proactively increase their own budgets to meet the specified goals, ensuring the correct purpose and effectiveness, without using it for other purposes;

3.5 Regarding rewards for exceeding budget revenue targets for local state budgets:

a) For revenues eligible for rewards as stipulated by the State Budget Law:

Special consumption tax on domestically produced goods (excluding the portion of local budget revenue already received through tiered distribution): reward 100% of the excess revenue over the budget target.

Export tax, import tax, special consumption tax on imported goods: rewards will be given to localities based on the excess revenue after deducting central government allocations back to localities (such as investments in border gate areas, etc.). The reward rate is 100% for excess revenue up to 20 billion VND, and an additional 50% for revenue exceeding 20 billion VND, but the total reward cannot exceed 50 billion VND.

b) For revenues shared between the central budget and local government budgets, local budgets will be rewarded 20% of the amount actually paid into the central budget in 2002 that exceeds the amount in 2001 (excluding revenue from budget spending).

c) Specifically for Hanoi City, rewards for exceeding revenue will be implemented according to the Capital Law No. 29/2000/PL-UBTVQH10 dated December 28, 2000 of the Standing Committee of the National Assembly and guiding documents.

d) To serve as a basis for rewarding, localities are responsible for compiling and reporting revenue collection results to the Ministry of Finance as stipulated in Point 6.3 Clause 6 Part IV of Circular No. 103/1998/TT-BTC dated July 18, 1998 of the Ministry of Finance.

e) The rewards and allocations mentioned above shall be used for investment in infrastructure, implementation of important and urgent tasks arising locally, and shall not be used to supplement administrative, Party, and mass organization expenses, and shall be accounted for and settled within the 2003 fiscal year.

II. Organization and Management of the State Budget

1. Focus on directing measures to address difficulties in production and product sales:

Effectively implement demand-stimulating measures of the Government; accelerate the restructuring and shareholding reform of state-owned enterprises; promote production, sales, and exports of products, especially those competitive in the market and key commodities.

Continue and expand the export incentive system to all markets and for all traders across all economic sectors for the following products: rice, coffee, tea, roasted peanuts, livestock and poultry meat, canned fruits and vegetables, fresh fruits and vegetables, dried fruits and vegetables, pepper, cashew nuts, ceramics, woodcrafts, rattan and bamboo products (excluding goods exported under government agreements and debt repayment exports) according to Directive No. 31/2001/CT-TTg dated December 13, 2001 of the Prime Minister.

Strictly implement national tax exemption and reduction policies to encourage production and stabilize people's lives, especially tax exemptions and reductions for agricultural land use by poor households and those in particularly difficult rural areas, and tax exemptions and reductions due to natural disasters and floods.

Ministries, central agencies, and localities should direct state-owned enterprises to use accumulated funds from not collecting budget usage fees to develop production and business activities. Based on financial guidance, enterprises are responsible for using these funds correctly and effectively; misuse, loss, and waste are strictly prohibited.

2. Strengthen revenue collection management and prevent revenue losses:

Strengthen management work, closely coordinate among agencies in organizing and directing collection, preventing loss of revenue, tax evasion, smuggling, commercial fraud. Review and grasp the objects of collection, production and business conditions to ensure correct and full collection of revenues as prescribed by Law, especially for the non-state economic sector, it is necessary to determine reasonable collection levels and adjust promptly to suit the production and business situation of entities in this area.

Vigorously promote post-tax refund inspection work. In cases where the amount of value-added tax refund application is large, thorough verification must be conducted before refunding to the entity; enhance coordination between revenue collection agencies and functional agencies combating fraud and abuse to appropriate state funds and assets.

For fees and charges, implement strictly according to the provisions of the Ordinance on Fees and Charges, while awaiting guiding documents, implement the contents as per Circular No. 12628/TC-CSTC dated December 26, 2001 of the Ministry of Finance.

3. On budget management and operation:

Stimulate the initiative of all levels and units in managing and operating the budget. Ensure expenditure within the approved budget, in accordance with the approved objectives.

For local budgets, during implementation, if additional revenue is obtained, allocate it to increase expenditure for important tasks without increasing administrative expenditure; in case of reduced revenue, arrange and reduce expenditure accordingly, focusing on cutting or postponing non-critical tasks,...

Proactively balance the budget to address unexpected expenditure tasks, ensuring that central government does not meet the needs of lower-level budgets outside the approved plan, except in cases of force majeure such as widespread natural disasters causing significant damage. New policies and regulations issued by the Central Government that reduce revenue (if any) or increase expenditure, local budgets must proactively arrange to address them, with the Central Government providing partial support.

Local government reserve budgets can only be used to address unexpected expenditure tasks, particularly disaster recovery, famine relief, economic development, debt resolution; they cannot be used to cover administrative expenditures.

The central government has supported part of the reduction in revenue from using state capital at enterprises and the entire reduction in revenue from exempting agricultural land taxes for farmers in the 2002 local budget to ensure investment and development of agriculture and rural areas; localities have the responsibility to manage and use these funds for their intended purpose effectively. People's Committees at provincial and city levels need to direct counties, communes, tax and finance agencies to implement this policy well, ensuring that policies reach the people, guaranteeing transparency and fairness.

On management of construction expenditure, target programs, Ministries, sectors, and People's Committees at all levels need to implement measures to overcome existing shortcomings:

Review the list of investment projects, allocate capital only to those with complete procedures, prioritizing capital allocation for important projects, especially transportation, water resources,... Financial agencies at all levels should prioritize advance payment and immediate capital disbursement at the beginning of the year for essential tasks, particularly construction and repair of dike and water resource works, flood prevention, crop and livestock supply, and other essential materials for production, ensuring timely for the season.

During budget management, closely monitor progress to allocate capital. Projects not proceeding according to schedule need to reallocate capital to those with faster progress and potential for completion but lacking sufficient capital, aiming to complete and put the project into use early, ending prolonged capital settlement periods. Do not provide additional capital for projects exceeding the budget or additional construction tasks outside the plan.

On allocation of operating funds:

For funds implementing programs and targets:

The management mechanism and method of allocating national target programs and the five million hectare forest planting project continue as in 2001.

Reserve funds and subsidies for policy goods, East Sea and island program expenses will be allocated through delegation to localities as in 2001. For book and newspaper price subsidies, continue to implement through the Vietnam Book Publishing Corporation as in 2001.

For social organizations and occupational social organizations supported by the budget, funding is allocated once a year according to the approved budget as stipulated in Circular No. 26/2001/TT-BTC dated April 19, 2001 of the Ministry of Finance.

For scientific topics and projects under national science and technology and social science programs, based on the approved budget for the programs decided by the Prime Minister, the Ministry of Finance will directly allocate the budget to the Program Steering Committees to organize implementation according to the prescribed regulations (with separate circulars for guidance).

Regarding supplementary allocations from the central budget to local budgets, the Ministry of Finance will implement quarterly supplementary budget balancing allocations to localities twice a quarter as in 2001.

4. Implementation of the policy of thrift, anti-waste, and financial transparency of the state budget:

Strictly implement Directive No. 29/2001/CT-TTg dated November 30, 2001 of the Prime Minister on intensifying thrift and combating waste, and related guiding documents. Among other things, it is necessary to pay attention to propaganda and dissemination work to ensure that all sectors, levels, units fully understand these measures, while immediately reviewing all implemented thrift practices at ministries, agencies, and localities across all fields, especially in vehicle procurement, equipping, and usage for official purposes (applicable to certain specialized sectors and using dedicated vehicles), building headquarters, etc., from which appropriate measures should be taken to firmly recover funds for public coffers in cases where regulations have not been followed in order to implement the Law on Thrift and Combating Waste. The head of each unit shall bear personal responsibility for the lawful, effective, and thrifty use of state budget funds. The State Treasury must strengthen oversight over expenditures by units. In cases where the unit head approves expenditures contrary to policies and regulations, the State Treasury will firmly refuse payment and notify the unit concerned, copying the superior supervisory authority.

Seriously implement the system of publicizing the state budget at all sectors, levels, and units immediately after the 2002 state budget is allocated and the 2001 state budget is approved according to Decisions No. 225/1998/QĐ-TTg dated November 20, 2001 of the Prime Minister and guiding Circulars of the Ministry of Finance.

5.Regarding administrative reform in the financial sector, the state budget:

Continue implementing administrative reform in the financial sector, the state budget, focusing on:

Study and improve tax refund and tax rebate procedures to ensure they are quick and efficient; strengthen post-refund inspection work to prevent fraudulent activities causing revenue loss to the state budget; publicly disclose tax refund procedures and processes for tax exemptions and reductions.

Perfect the process and innovate the mechanism for allocating state budget funds.

Implement the expansion of personnel quota and management administrative funding for state administrative agencies according to Decision No. 192/2001/QĐ-TTg dated December 17, 2001 of the Prime Minister.

Establish procedures and methods for expenditure control under the conditions of administrative funding quotas and self-financing mechanisms in income-generating public institutions, and service leasing mechanisms in offices.

Improve reporting systems, reorganize information systems to enhance exchange and coordination in information provision.

6. On managing and utilizing funds for rural medium-voltage power grid payments:

In 2002, continue implementing payments for rural medium-voltage power grids to localities based on the guidance provided by the Joint Circular No. 06/2001/TTLT/BCN-BTC dated August 23, 2001 of the Ministry of Industry and the Ministry of Finance. Localities shall direct the management and use of the received funds in accordance with the prescribed regulations.

7. On finance and budget of communes:

Strengthen the management of financial and budgetary activities of communes; ensure that funds raised at commune level are used for their intended purposes and are effective; promote grassroots democracy.

Review sources of revenue at commune level, enhance the decentralization of revenue sources to communes as stipulated by the State Budget Law to increase local resources for communes. Pilot expanding authorization for commune-level collection of certain non-state-owned revenues such as construction activity revenues, fresh seafood sales revenues, etc.

Based on reviewing commune budget debts, localities should develop plans to resolve them decisively, firmly preventing new debts from arising.

8. On implementing programs for reinforcing irrigation canals, rural roads, infrastructure for aquaculture, village craft infrastructure in rural areas, and salt production infrastructure:

In 2002, the central government will continue to provide preferential credit loans (at zero interest rate) to provincial budgets to implement investment programs for reinforcing irrigation canals, rural roads, aquaculture infrastructure, village craft infrastructure in rural areas, and salt production infrastructure for regions with salt industries, according to Resolution No. 05/2001/NQ-CP dated May 24, 2001 of the Government. At the same time, additional support will be provided for constructing salt production infrastructure in regions with salt industries. Localities need to summarize and evaluate the results of previous years' implementation, develop plans for implementation in 2002 and subsequent years, proactively allocate budgets, mobilize people's contributions, and combine with central government loans to effectively carry out these tasks and plan repayment when due.

III. Implementation Organization

This Circular takes effect from January 1, 2002. Ministries, sectors, People's Committees of provinces and centrally-administered cities shall base themselves on this Circular to organize guidance for relevant agencies, units, and local authorities to implement accordingly./.