JOINT CIRCULAR No. 07/2002/TTLT/BTM-UBDTMN-BTC-BKÐHT Circular guiding the implementation of Decree No. 02/2002/NĐ-CP dated January 3, 2002, and Decree No. 20/1998/NĐ-CP dated March 31, 1998 of the Government on the development of trade in mountainous areas, islands, and ethnic minority regions.

CIRCULAR 

JOINT CIRCULAR OF THE MINISTRIES OF TRADE, NATIONAL COMMITTEE FOR ETHNIC MINORITIES AND MOUNTAINOUS REGIONS, FINANCE, AND PLANNING AND INVESTMENT NO. 07/2002/TTLT/BTM-UBDTMN-BTC-BKHĐT DATED AUGUST 12, 2002 ON GUIDELINES FOR IMPLEMENTATION OF DECREE NO. 02/2002/ND-CP DATED JANUARY 3, 2002 AND DECREE
NO. 20/1998/ND-CP DATED MARCH 31, 1998 OF THE GOVERNMENT ON DEVELOPMENT OF MOUNTAINOUS, ISLAND, AND ETHNIC MINORITY AREAS' COMMERCE

Pursuant to Decree No. 20/1998/ND-CP dated March 31, 1998 of the Government on "development of commerce in mountainous, island, and ethnic minority areas" and Decree No. 02/2002/ND-CP dated January 3, 2002 of the Government amending and supplementing certain articles of Decree No. 20/1998/ND-CP.

The Ministries of Trade, National Committee for Ethnic Minorities and Mountainous Regions, Finance, and Planning and Investment hereby provide guidance as follows:

I. ON MOUNTAINOUS, ISLAND, AND ETHNIC MINORITY AREAS
Mountainous, island, and ethnic minority areas are areas recognized and classified into three zones based on their level of development (I, II, III) by the National Committee for Ethnic Minorities and Mountainous Regions pursuant to decisions: Decision No. 42/UB-QĐ dated May 23, 1997; Decision No. 26/1998/QĐ-UB dated March 18, 1998; Decision No. 21/1998/QĐ-UB dated March 18, 1998; Decision No. 21/1998/QĐ-UBDTMN dated February 25, 1998 of the National Committee for Ethnic Minorities and Mountainous Regions.

The National Committee for Ethnic Minorities and Mountainous Regions decides and guides implementation in cases where there are changes in administrative units and boundaries of communes, districts, and provinces within mountainous, island, and ethnic minority areas.

The Committee for Ethnic Minorities and Mountainous Areas decides and guides the implementation in cases where there are changes in administrative units and boundaries of communes, districts, and provinces within mountainous areas, islands, and ethnic minority regions.

II. CONSTRUCTION OF MARKETS AND STATE OR COOPERATIVE COMMERCIAL SERVICES AT THE CENTERS OF GROUPS OF VILLAGES IN EACH ZONE

1. For Zone III: Construction of markets and state commercial services or cooperative commercial service enterprises at locations within the program for building village group centers in mountainous and highland areas according to Decision No. 35/TTg dated January 13, 1997 of the Prime Minister (now part of Program 135) shall be carried out in accordance with Joint Circular No. 666/2001/ITLT/BKH-UBDTMN-BXD-BTC dated August 23, 2001 guiding management of investment and construction of infrastructure under Program 135.

2. For Zone II: Construction of markets and state commercial services or cooperative commercial service enterprises at locations not included in the program for building village group centers shall be decided by the Chairman of the Provincial People's Committee for investment and construction from local budget funds upon consideration of the following conditions:

- The market and store must be within the planning scheme.

- There is an urgent need to form a market to promote commodity exchange, stabilize living standards, and develop commodity production.

3. For Zone I: Construction of markets and commercial stores shall follow the principle of "State and traders working together": - The State will support part of the budget for infrastructure construction of the market such as leveling the ground, electricity, water supply and drainage, sanitation systems...

- Traders contribute capital to build architectural structures for selling goods: stalls, counters, market pavilions, and can use the business area in the market according to the terms stipulated in the capital contribution contract between the trader and the market management agency.

- Mobilize medium- or long-term credit funds with preferential interest rates. - Encourage other forms of investment in accordance with the law.

4. The Department of Trade and Tourism (hereinafter referred to as the Department of Trade) shall base its plans for developing markets and state commercial stores or cooperative commercial service enterprises on the development plan for markets and other relevant conditions, coordinating with relevant sectors to submit these plans to the Provincial People's Committee for decision.

The Department of Trade shall perform specialized management functions over market activities in accordance with Circular No. 15-TM/CSTTTN dated October 16, 1996 of the Ministry of Trade. Administrative management of markets shall be carried out in accordance with the provisions on market administration levels set forth in Section II of Circular No. 15/TM-CSTNTN dated October 16, 1996 of the Ministry of Trade.

III. ON EXEMPTION AND REDUCTION OF ENTERPRISE INCOME TAX, INTEREST RATE REDUCTION FOR LOANS TO TRADERS IN MOUNTAINOUS, ISLAND, AND ETHNIC MINORITY AREAS

1. Applicability.

The objects eligible for exemption and reduction of enterprise income tax are traders belonging to various economic sectors engaged in commerce in mountainous, island, and ethnic minority areas, including:
- State-owned enterprises;
- Enterprises of political organizations, political-social organizations, social organizations, social-professional organizations, people's armed forces units, administrative and public service agencies;

- Foreign-invested enterprises operating in Vietnam in accordance with the Law on Foreign Investment;

- Enterprises operating in accordance with the Law on Enterprises;

- Cooperatives, households, individuals who have registered for business and operate in accordance with Decree No. 02/2000/ND-CP dated February 3, 2000 of the Government on Business Registration.

These objects are only eligible for exemption and reduction of enterprise income tax in accordance with the guidelines provided in this Circular when:

- They register for business and operate in accordance with the industry they have registered for business in.

- Individuals, household business owners, independent business groups, and other business entities;

- They register for tax and declare taxes in accordance with the law.

- They maintain accounting books, record, and retain accounting books, invoices, and related documents for commercial activities in accordance with the law.

2. Areas of applicability.

Mountainous, island, and ethnic minority areas eligible for tax exemption and reduction shall be implemented in accordance with the provisions of Section I of this Circular.

3. Content of exemption and reduction of enterprise income tax.

Traders engaged in commerce in mountainous, island, and ethnic minority areas are entitled to tax exemption and reduction of enterprise income tax as follows:

a. Level of exemption and reduction and duration of exemption and reduction of enterprise income tax.

a.1. For traders operating in Zone III within mountainous, island, and ethnic minority areas.

- For those currently exempted or reduced from profit tax in accordance with Decree 20/1998/ND-CP: continue to be exempted or reduced from enterprise income tax for the same period and at the same rate as currently enjoyed.

Business operators conducting trade activities in mountainous areas, islands, and ethnic minority regions shall be exempted from tax or have their corporate income tax reduced as follows:

a. The level of exemption, reduction, and the duration of exemption and reduction of corporate income tax.

a.1. For business operators engaged in business in Zone III within mountainous areas, islands, and ethnic minority regions.

- For entities currently enjoying tax exemption or reduction according to the provisions of Decree 20/1998/NĐ-CP: continue to enjoy exemption or reduction of corporate income tax for the duration and at the level of exemption or reduction they are currently receiving.

- For subjects not exempted or reduced from tax: Implement exemption from corporate income tax for a period of 4 years starting from when taxable income begins to be generated, and reduce 50% of the corporate income tax payable for the following 7 years, if the average number of employees used annually is 20 or more, then further reduce 50% of the corporate income tax payable for an additional 2 years.

a.2. For merchants operating in Zone II within mountainous areas, islands, ethnic minority regions selling social policy goods and agricultural and forestry products eligible for transportation subsidies:

- For entities currently enjoying tax exemption or reduction according to the provisions of Decree 20/1998/NĐ-CP: continue to enjoy exemption or reduction of corporate income tax for the duration and at the level of exemption or reduction they are currently receiving.

- Subjects not exempted or reduced from tax: Are exempted from corporate income tax for a period of 2 years starting from when taxable income begins to be generated, and have their corporate income tax payable reduced by 50% for the following 5 years, if the average number of employees used annually is 20 or more, then further reduce 50% of the corporate income tax payable for an additional 2 years.

a.3. For merchants operating in Zone I directly selling social policy goods and merchants directly engaging in business activities in Zone I and Zone II within mountainous areas, islands, ethnic minority regions when selling other goods (excluding those mentioned in sub-item a.2, Clause a, Subpoint 3 of Section III of this Circular):

- For entities currently enjoying tax exemption or reduction according to the provisions of Decree 20/1998/NĐ-CP: continue to enjoy exemption or reduction of corporate income tax for the duration and at the level of exemption or reduction they are currently receiving.

- Subjects not exempted or reduced from tax: Are exempted from corporate income tax for 2 years starting from when taxable income begins to be generated, and have their corporate income tax payable reduced by 50% for the following 4 years, if the average number of employees used annually is 20 or more, then further reduce 50% of the corporate income tax payable for an additional 2 years.

To be exempted or reduced from tax according to sub-items a, b, c of Point 3.1, Section 3, Part III of this Circular, merchants must separately account for the revenue and taxable income from commercial activities occurring in mountainous areas, islands, ethnic minority regions as the basis for the tax authority to determine and implement tax exemptions and reductions.

b. Authority, procedure, and formalities for considering tax exemptions and reductions on corporate income tax.

The tax exemption and reduction for merchants as stipulated in Decree No. 02/2002/NĐ-CP and detailed in this Circular shall be carried out by the tax authority directly managing the tax payment of the merchant at the time of annual tax settlement.

Quarterly, merchants may temporarily declare and pay taxes at the rate of tax exemption and reduction specified in Point 3, Section III of this Circular. At year-end, during the tax settlement, the tax authority will officially review the tax declaration form and issue a tax notice indicating the amount of tax due, the amount of tax exempted, and the amount of tax reduced. If the tax paid temporarily throughout the year is less than the tax due as indicated in the tax notice, the merchant must pay the remaining tax due according to the deadline stated in the notice; if the tax paid temporarily exceeds the tax due as indicated in the notice, the excess can be deducted from the tax due in the following year.

The tax authority can only implement tax exemptions and reductions according to the guidance in this Circular for merchants declaring and paying corporate income tax to the tax authority directly managing the area where the commercial activities occur in mountainous areas, islands, ethnic minority regions.

During the same period, if a merchant is simultaneously exempted or reduced from corporate income tax according to Clause 1, Article 1 of Decree No. 02/2002/NĐ-CP, and exempted or reduced from corporate income tax according to the Corporate Income Tax Law and Decree No. 30/1998/NĐ-CP dated May 13, 1998 of the Government detailing the implementation of the Corporate Income Tax Law, the tax exemption and reduction will be implemented according to the regulation with the highest level of exemption and reduction among these regulations.

4. Responsibilities of merchants and tax authorities.

a. Merchants engaged in business in mountainous areas, islands, ethnic minority regions subject to this Circular are responsible for:

- Presenting the establishment permit and business registration certificate to the tax authority managing the area.

- Declaring revenue and taxable income fully and regularly as guided by the tax authority.

Merchants violating the registration and declaration system for taxes; the bookkeeping and accounting records system will not be eligible for tax exemptions and reductions under this Circular and will be subject to penalties according to the law based on the severity of the violation.

b. Tax authorities at all levels are responsible for:

- Guiding and inspecting merchants in implementing this Circular.

- During regular inspections of tax obligations and final tax settlements, if merchants are found to have misrepresented or evaded taxes, in addition to not implementing tax exemptions and reductions according to this Circular, the tax authority will be responsible for collecting the full amount of tax owed according to the law, assessing the degree of violation, and imposing penalties according to the law on administrative violations in the tax field.

- The tax authority must clearly reflect the amount of tax due, the amount of tax exempted and reduced, the remaining tax due, and other indicators on tax collection receipts, tax declarations, tax ledgers, and tax accounting books. At year-end, provincial tax bureaus must comprehensively summarize the implementation of tax exemptions and reductions according to this Circular and report to the Ministry of Finance (General Department of Taxation).

5. Regarding interest rates for loans under Clause 2, Article 1 of Decree No. 02/2002/NĐ-CP: Implementation shall follow the guidance of the State Bank of Vietnam and the Ministry of Finance.

IV. TRAINING AND IMPROVEMENT OF BUSINESS SKILLS FOR STATE ENTERPRISE MANAGEMENT STAFF OPERATING IN MOUNTAINOUS AREAS
FOR PUBLIC SERVANTS AND ENTERPRISE MANAGERS
Annually, the Ministry of Trade prepares plans and budget estimates for training and improving business skills for state enterprise management staff operating in mountainous areas, islands, and ethnic minority regions within the ministry's training budget, and implements according to the allocated budget estimate.

V. SUBSIDIES FOR THE SALE OF SOCIAL POLICY GOODS,

 PURCHASE OF CERTAIN PRODUCTS PRODUCED IN MOUNTAINOUS AREAS, ISLANDS AND ETHNIC MINORITY REGIONS.

 PURCHASE CERTAIN PRODUCTS PRODUCED IN THE MOUNTAINOUS REGIONS, ISLANDS, AND ETHNIC MINORITY AREAS

1. Selling social policy goods (essential items eligible for price and transportation subsidies) in mountainous areas, islands, and ethnic minority regions. 

1. Selling social welfare goods (essential items subsidized with price support or transportation cost subsidies) in mountainous areas, islands, and ethnic minority regions.

a. Subjects entitled to enjoy subsidy and freight rate policies for certain goods sold in mountainous areas, islands, and ethnic minority regions:

Goods with subsidies and freight rate reductions shall be sold to all subjects residing in the areas specified in Section I, Clause 1 of this Circular, at sales points as prescribed by the Provincial People's Committee.

All subsidized and freight rate reduced goods must be strictly managed, particularly paying attention to items such as crop seeds, aquaculture seeds, and iodized salt. The Provincial People's Committee shall specify the implementation methods and management measures to ensure that goods reach the intended beneficiaries in sufficient quantity, of appropriate quality, at the stipulated time, location, and price.

b. The list of social policy goods sold in mountainous areas, islands, and ethnic minority regions shall be determined by the Ethnic Minorities and Mountainous Areas Committee for each period.

The Minister, Head of the Ethnic Minorities and Mountainous Areas Committee, based on requirements and policies to encourage economic and social development in mountainous areas, islands, and ethnic minority regions, consulting opinions from relevant Ministries, sectors, and Provincial People's Committees in these regions, shall decide on adjusting the list of subsidized and freight rate reduced goods for each period as appropriate.

c. The distance for freight rate subsidies, delivery and receipt locations for subsidized and freight rate reduced goods, and the items eligible for price subsidies for subsidized and freight rate reduced goods sold in mountainous areas, islands, and ethnic minority regions shall be implemented according to the Appendix attached to this Circular.

In cases where it is necessary to adjust the regulations regarding the distance for freight rate subsidies, delivery and receipt locations for subsidized and freight rate reduced goods, and the items eligible for price subsidies for each type of goods, the Ministry of Trade shall take the lead in re-evaluating and issuing guidance documents for implementation.

d. Method for determining the subsidized price and freight rate:

- The freight rate subsidy price is calculated using the following formula:

Freight rate subsidy price for item A = ∑ (freight rate for item A according to road category (i) × distance of road category (i)) + loading and unloading costs + bridge, road, ferry fees + allowable transportation loss (if applicable).

Where:

+ Freight rate for transport by automobile: on central government-managed routes, based on the freight rate for transporting goods by automobile as stipulated in Decision No. 89/2000/QĐ-BVGCP dated November 13, 2000 of the Government Price Board; on locally-managed routes, based on the regulations of the Provincial People's Committee.

+ Freight rate for transport by primitive means (ox carts, horse-drawn carriages, hand carts, farm trucks...): calculated as follows:

. From 25,000 VND to 30,000 VND/ton/km for Lai Châu, Ha Giang, Cao Bang, Lao Cai, Son La provinces.

. From 20,000 VND to 25,000 VND/ton/km for Yen Bai, Tuyen Quang, Thanh Hoa, Nghe An, Quang Binh, Quang Tri, Thua Thien Hue, Quang Nam, Da Nang, Quang Ngai, Gia Lai, Kon Tum provinces.

. From 15,000 VND to 20,000 VND/ton/km for Bac Kan, Thai Nguyen, Quang Ninh, Hoa Binh, Lang Son, Dak Lak provinces.

. From 10,000 VND to 15,000 VND/ton/km for Vinh Phuc, Phu Tho, Bac Giang, Ha Tinh, Lam Dong, Binh Dinh, Phu Yen, Khanh Hoa, Ninh Thuan, Binh Thuan, Binh Phuoc provinces.

If the freight rate for transport by primitive means exceeds the above prices, the Department of Finance and Prices shall report to the Provincial People's Committee for consideration and decision.

+ Freight rate for transport by other means (railway, inland waterway) shall be calculated based on the freight rate set by the competent authority. If there is no set freight rate, it shall be calculated based on the actual reasonable freight rate for each type of means of transport.

- Bridge, road, ferry fees; loading and unloading costs, and allowable transportation losses during the process (if applicable) shall be included in the freight rate subsidy price. These fees and costs shall be implemented according to the regulations of the competent authority. In cases where there are no regulations, they shall be implemented based on actual reasonable conditions at the local level at the time of transportation.

- Seed subsidy amount: the difference between the cost price and the selling price to buyers at village cluster centers:

Seed subsidy = Cost price - Selling price to people at village cluster centers.

Wherein:

+ Cost price: the purchase price of seeds at the warehouse and reasonable circulation costs excluding transportation costs already included in the freight rate subsidy price.

+ The selling price to people at village cluster centers shall be specified by the Provincial People's Committee..

- Iodized salt subsidy amount includes labor costs for mixing iodized salt and polyethylene bag costs (excluding the value of bags provided as aid, if any), as specified by the Government Price Board.

e. Principles for determining retail prices or price ranges for subsidized and freight rate reduced goods:

- For goods for which the State has set prices, price ranges, or maximum retail prices, the Provincial People's Committee shall specify specific prices within the permitted range.

- For goods for which the State has not set prices, price ranges, or maximum retail prices, the Provincial People's Committee shall base its determination of unified retail prices or price ranges for subsidized and freight rate reduced goods in the areas benefiting from the policy on supply and demand conditions, market prices, and purchasing power of the people. The prices or price ranges must be equivalent to the selling prices of similar goods in cities and provincial capitals.

- Specifically, for crop seeds, the Provincial People's Committee shall determine seed selling prices based on supply and demand conditions, purchasing power of ethnic groups, and considering the retail prices of crop seeds in adjacent regions of other provinces to set appropriate prices.

g. For extremely difficult areas (Zone III), if the people cannot afford to buy goods, the Chairman of the Provincial People's Committee shall, based on the allocated subsidy and freight rate funds for the year and the provincial budget, decide to provide free goods (excluding those already covered by the Decision 135/1998/QĐ-TTg dated July 31, 1998, Decision 168/2001/QĐ-TTg dated October 30, 2001, and Circular No. 941/CP-KTTH dated October 19, 2001 of the Prime Minister), according to the principle:

- The subjects to be considered for issuance without payment: Only households in dire poverty or extreme poverty in Zone III, who genuinely lack funds to purchase goods, will be considered, upon recommendation by the People's Committee of the commune. Attention should be given to policy beneficiary households and ensuring ethnic unity, stabilizing living conditions, and promoting production development.

- The cost price for issuing goods without payment shall not exceed the subsidized retail price of similar goods at the same time and location as stipulated by the Provincial People's Committee.

2. Subsidies for transportation costs to facilitate the consumption of certain products manufactured in particularly difficult communes in mountainous areas, islands, and ethnic minority regions.

a. Recipients of the policy for subsidies on transportation costs for product consumption:

Producers in particularly difficult communes may sell products (listed for subsidized consumption) to traders (assigned to purchase subsidized products) at designated purchasing points as determined by the Provincial People's Committee.

The purchasing locations, product list, and purchase prices for subsidized consumption products are decided by the Provincial People's Committee.

Transportation subsidy funds are provided to traders directly purchasing certain agricultural and forestry products or processed products from these raw materials (collectively referred to as agricultural and forestry products) from organizations and individuals (collectively referred to as producers) in particularly difficult communes, based on the results of purchases made, according to the approved plan by the Provincial People's Committee.

b. The list of products eligible for transportation subsidies for consumption is determined annually by the Provincial People's Committee within the framework set by the Committee for Ethnic Minorities and Mountainous Areas.

c. Maximum distance for transportation subsidies for product consumption:

- For mountainous provinces, it is calculated from the center of the commune cluster in Zone III to the nearest city or town in the plains region.

- For provinces with mountainous areas, islands, and ethnic minority regions, it is calculated from the center of the commune cluster in Zone III to the provincial capital city.

- If the actual consumption location falls within the subsidized transportation distance range, the transportation subsidy amount is calculated based on the actual transportation distance.

d. The method for determining the transportation subsidy amount for product consumption follows the guidelines for subsidizing transportation costs for products sold in mountainous, island, and ethnic minority regions (Section V, Clause 1, Point d of this Circular).

e. Principles for determining the minimum purchase price (floor price) of products eligible for transportation subsidies:

- Agricultural and forestry products must be included in the list of products determined by the Provincial People's Committee for subsidized consumption. Such products must be included in the list of products determined by the Provincial People's Committee that are eligible for transportation cost subsidies.

- The minimum purchase price (floor price) = the selling price of the product in cities or provincial capital towns minus (-) reasonable circulation costs. Reasonable circulation costs do not include transportation costs, which have been supported.

The Department of Finance and Prices must regularly monitor and supervise market price fluctuations, implement measures to manage the purchase price of subsidized transportation products, prevent price suppression against producers, and advise the Provincial People's Committee to determine appropriate floor prices for each type of product.

When the market price of subsidized transportation products drops below the established floor price, causing disadvantage to both producers and assigned traders responsible for purchasing, transporting, and consuming the products, the Department of Finance and Prices, along with relevant departments, will report to the Provincial People's Committee and propose solutions to address difficulties faced by producers and units tasked with product consumption.

3. Funding for price and transportation subsidies for social policy items and transportation subsidies for product consumption:

a. Central budget funds are primarily allocated to support provinces in mountainous, island, and ethnic minority regions with significant difficulties, mainly in Zones II and III. For regions with fewer difficulties, the Provincial People's Committee decides on the implementation of policies and the use of local budget funds.

The establishment, allocation, and assignment of budgets for price and transportation subsidies for policy items and transportation subsidies for product consumption are carried out in accordance with the State Budget Law and its guiding documents. Subsidy funds are drawn from the central budget and allocated to the Provincial People's Committees under the form of "delegated funding." "right".

b. Implementation at the local level:

Based on centrally allocated subsidy funds and additional local budget contributions, the Provincial People's Committee determines plans and allocates funds for each item according to the province's specific needs. Priority is given to essential items and particularly difficult regions.

4. The Provincial People's Committee selects traders to execute the purchase and sale of subsidized goods through competitive bidding or designation of qualified traders with adequate networks, facilities, staff, etc., and assigns them the task of selling subsidized items and purchasing subsidized consumption products.

5. The Chairman of the Provincial People's Committee is responsible for directing the implementation and organizing regular inspections of the execution of price and transportation subsidies at each sales point in accordance with Decree No. 02/2002/ND-CP and Decree No. 20/1998/ND-CP of the Government, ensuring that residents in mountainous, island, and ethnic minority regions can purchase policy items in the specified quantities, at regulated prices, and with guaranteed quality at designated locations, and selling products from difficult regions at reasonable prices. Strict penalties will be imposed on violations, especially fraudulent claims in subsidy payments and transportation costs; preventing wastage and loss of state funds, and being accountable to the Prime Minister for the outcomes.

VI. STATE ENTERPRISES ENGAGED IN COMMERCE

- Enterprises of political organizations, political-social organizations, social organizations, social-professional organizations, people's armed forces units, administrative and public service agencies;

1. Expand the state-owned enterprise network operating in commerce in mountainous areas, islands, and ethnic minority regions to be capable of controlling the market for selling social policy goods, production materials, and purchasing important products produced by ethnic minorities, prioritizing particularly difficult communes. State-owned enterprises engaged in commerce must have stores at the center of commune clusters. Suitable forms should be adopted to utilize cooperative trade service enterprises, other state-owned enterprises (factories, forestry and farm enterprises), schools, health stations, teachers, and trusted individuals in villages as agents or to entrust them with buying and selling goods. Establish connections between central state-owned enterprises and local ones, among enterprises on the same territory, and among different economic sectors according to the principle of mutual benefit to create a smooth system of channels from production to consumption, linking mountainous areas, islands, and ethnic minority regions with other regions... act as agents or accept mandates to buy and sell goods. Establish linkages between state-owned enterprises at the central level and localities, among enterprises within the same region, and among different economic sectors in a spirit of mutual benefit to create a smooth system of channels from production to consumption, between mountainous areas, islands, and ethnic minority regions and other regions.

The Department of Commerce shall take the lead and coordinate with the Department of Planning and Investment and relevant departments in the province to develop a plan for the development of the commercial network (including markets, state-owned enterprise stores, cooperative trade service enterprises, non-state-owned trade enterprises, etc.) and organize its implementation after approval. The plan must be consistent with the socio-economic conditions in the area, integrate commercial activities with residential planning and production zones, gradually covering all "white spots" in the commercial network.

2. Regarding state-owned enterprises engaged in public welfare in commerce: implement according to the provisions of the law on public welfare enterprises.

The Department of Commerce shall take the lead and coordinate with the Department of Planning and Investment to examine enterprises that meet the conditions and have the need to convert to public welfare enterprises, prepare plans to submit to the Provincial People's Committee for decision, following the procedures and formalities for establishing public welfare enterprises.

3. Working capital of state-owned commercial enterprises in mountainous areas, islands, and ethnic minority regions.

a. The reasonable working capital needs of state-owned commercial enterprises in mountainous areas, islands, and ethnic minority regions are determined based on:

- The business tasks and results of the enterprise.

- The situation of working capital (including both self-owned and borrowed capital) of the enterprise over the past 2-3 years.

- Business conditions such as roads and transport distances, weather and climate affecting circulation, the seasonal nature of production and consumption, payment service and banking credit conditions, customs and consumption needs of the people, and other factors influencing the speed of working capital turnover.

- Requirements for essential goods reserves, especially those under social policy goods categories.

Enterprises prepare proposals to supplement working capital, report to the Department of Commerce, the State Capital and Asset Management Agency at the enterprise (for places where the agency has been established) or the Department of Finance (for places without such an organization), which will consolidate these into the annual budget estimate and submit to the Provincial People's Committee.

b. Supplementing working capital for state-owned commercial enterprises:

The procedure for preparing working capital plans for state-owned commercial enterprises in mountainous areas, islands, and ethnic minority regions follows the process and guidelines for implementing the State Budget Law.

The source for supplementing working capital for central state-owned enterprises is guaranteed by the central budget.

The source for supplementing working capital for local state-owned enterprises is guaranteed by the local budget. The Chairman of the Provincial People's Committee decides to supplement working capital for enterprises according to the allocated budget.

VII. MANAGEMENT OF WORKING CAPITAL FOR ESSENTIAL GOODS RESERVES IN MOUNTAINOUS AREAS, ISLANDS AND ETHNIC MINORITY REGIONS
MOUNTAINOUS REGIONS, ISLANDS, AND ETHNIC MINORITY AREAS

1. Essential goods subsidized for sale in mountainous areas, islands, and ethnic minority regions include:

(1) Salt: including regular salt (for iodine mixing) and finished iodized salt.

(2) Lighting oil.

Mainly, working capital is used for Zone III. Depending on the specific situation of each locality, the Provincial People's Committee may supplement essential goods that must be reserved in particularly difficult areas (Zone III).

2. State-owned trading enterprises responsible for supplying the essential goods specified in point 1 are provided with sufficient working capital for reserves from the local budget. The amount of capital provided is sufficient to meet the demand for circulating essential goods, equivalent to the consumption needs of the population in the served area for an average period of 2 to 3 months. Depending on the situation in each zone, the Provincial People's Committee stipulates the appropriate reserve period based on local realities. 3. The Provincial People's Committee specifies the quantity of goods and corresponding working capital for each type of goods and each zone (I, II, III), the timing of reserves, and the mobilization of working capital for essential goods reserves for business needs at suitable times.

4. Enterprises provided with capital are responsible for using it to reserve essential goods for circulation. Organizing reserves for circulation must meet requirements for each type of goods, in each area, and at each time. Enterprises can proactively organize reserves for circulation in accordance with the specific conditions of each zone (I, II, III) and the characteristics of the goods and consumption needs.

During periods such as the rainy season, festivals, and in areas with particularly difficult transportation, actual requirements demand higher levels of reserves than the average reserve level, enterprises are responsible for mobilizing other sources of capital for reserves. Outside these periods and areas, enterprises may temporarily use part of the reserve capital for other goods and must promptly return it to ensure reserves for essential goods, ensuring adequate supply to meet the needs of the people.

5. Working capital for essential goods reserves is managed like working capital and preserved according to financial management and accounting regulations for state-owned enterprises.

5. Reserve funds for social welfare goods shall be managed as circulating capital and preserved according to financial management and business accounting regulations applicable to state-owned enterprises.

Every six months, enterprises that have been granted reserve capital must report to the Department of Finance and the Department of Trade on the situation regarding the use of reserve capital for policy goods. The Department of Finance will compile these reports and submit them to the Provincial People's Committee and the Ministry of Finance.

VIII. IMPLEMENTATION

1\. The Committee for Ethnic Minorities and Mountainous Areas shall take the lead and coordinate with relevant ministries and provincial people's committees in organizing the implementation of price subsidies and transport subsidies policies, monitoring the results, and reporting to the Prime Minister.

Continuously monitor, guide, and organize inspections and supervision of the implementation of price subsidies and transport subsidies policies by localities, ministries, and enterprises.  which use subsidy funds. Timely identify and address any difficulties and report proposals to the Government for necessary measures to ensure the correct and effective implementation of the policies according to management regulations.

2\. The Ministry of Trade shall take the lead in monitoring and reporting on the results of implementing policies encouraging and providing preferential treatment to traders; coordinate with the Committee for Ethnic Minorities and Mountainous Areas and relevant ministries and provincial people's committees to monitor and resolve difficulties in implementing transport and price subsidy policies; guide localities in implementing measures to expand markets and develop commodity circulation in mountainous areas, islands, and ethnic minority regions.

3\. The Ministry of Planning and Investment, the Ministry of Finance, the State Price Control Board, and related agencies shall cooperate with the Committee for Ethnic Minorities and Mountainous Areas and the Ministry of Trade to monitor the implementation and resolve difficulties in organizing the implementation of policies stipulated in Decree No. 20/1998/NĐ-CP and Decree No. 02/2002/NĐ-CP of the Government..

4\. Provincial People's Committees shall be responsible for directing, organizing the implementation, monitoring, and inspecting the implementation of policies within their jurisdictions. Promptly identify and address any difficulties during the implementation process and propose solutions to the Government and relevant ministries.

5\. This Circular replaces the following consolidated documents:

- Joint Circular No. 11/1998/TTLT/BTM-UBDTMN-BTC-BKHĐT dated July 31, 1998, issued by the Ministry of Trade, the Committee for Ethnic Minorities and Mountainous Areas, the Ministry of Finance, and the Ministry of Planning and Investment guiding the implementation of Decree No. 20/1998/NĐ-CP;

- Circular No. 112/1998/TT-BTC dated August 4, 1998, issued by the Ministry of Finance guiding the implementation of tax exemptions and reductions as provided for in Article 9 of Decree No. 20/1998/NĐ-CP dated March 31, 1998, of the Government on developing trade in mountainous areas, islands, and ethnic minority regions;

- Circular No. 06/1998/TT-BVGCP dated August 22, 1998, issued by the State Price Control Board guiding the principles for determining subsidized prices and transport rates and the retail prices of policy goods subsidized in mountainous areas, islands, and ethnic minority regions; and it becomes effective upon the effectiveness of Decree No. 02/2002/NĐ-CP dated January 3, 2002, of the Government.

During the implementation, if there are any difficulties, please promptly reflect them to the relevant ministries and agencies for research and supplementary guidance.

ANNEX I
SUBSIDIZED PRICES AND TRANSPORT COSTS FOR POLICY GOODS TO MOUNTAINOUS AREAS, ISLANDS, AND ETHNIC MINORITY REGIONS

(Pursuant to Joint Circular No. 07/2002/TTLT/BTM-UBDTMN-BTC-BKHĐT dated August 12, 2002, issued by the Ministry of Trade, the Committee for Ethnic Minorities and Mountainous Areas, the Ministry of Finance, and the Ministry of Planning and Investment)
(Passed on August 12, 2002, by the Ministry of Trade - Committee for Ethnic Minorities and Mountainous Areas - Ministry of Finance - Planning and Investment)

The transportation distance eligible for transport subsidies for policy goods sold in mountainous areas, islands, and ethnic minority regions, starting from the origin point specified in the annex, ends at the center of the commune cluster for iodized salt, firewood, crop seeds, fishery seeds, and fertilizers; and for book distribution, it is calculated from the origin point to the county center.

Localities may purchase goods from other places if they meet the same quality and price standards, but the maximum transport subsidy distance can only be calculated based on the distance from the origin point as specified.

 Origin point (starting point) for calculating transport subsidies:

+ For provinces in mountainous areas, the starting point for calculating transport subsidies for goods is the nearest central warehouse of enterprises under central management.

+ For provinces with only mountainous, island, and ethnic minority districts and communes, the starting point for calculating transport subsidies is the provincial center.

1\. Salt:

a\. Iodized salt:

+ Provinces of Cao Bằng, Hà Giang, Lai Châu, Lạng Sơn, Bắc Cạn, Tuyên Quang, Hà Tây are calculated from Hanoi.

+ Province of Hải Phòng is calculated from Hải Phòng.

+ Province of Quảng Nam is calculated from Đà Nẵng.

+ Provinces of Phú Yên, Bình Định, Kontum are calculated from Qui Nhơn.

+ Province of Bình Thuận is calculated from Phan Thiết.

+ Province of Bà Rịa - Vũng Tàu is calculated from Bà Rịa - Vũng Tàu.

+ Provinces of Bình Phước, An Giang are calculated from Hồ Chí Minh City.

b\. White salt:

+ Provinces of Lai Châu, Sơn La, Lào Cai, Yên Bái, Hòa Bình, Phú Thọ, Vĩnh Phúc, Thái Nguyên, Bắc Giang are calculated from Hanoi.

+ Province of Quảng Ninh is calculated from Thái Bình.

+ Province of Hà Nam is calculated from Nam Định.

+ Province of Thanh Hóa is calculated from Thanh Hóa Salt Field.

+ Province of Ninh Bình is calculated from Nam Định.

+ Province of Nghệ An is calculated from Diễn Châu.

 + Provinces of Quảng Bình, Quảng Trị, Thừa Thiên Huế, Hà Tĩnh are calculated from Hà Tĩnh Salt Field. .

+ Provinces of Đà Nẵng, Gia Lai are calculated from Bình Định Salt Field.

+ Province of Quảng Ngãi is calculated from Sa Huỳnh.

+ Provinces of Lâm Đồng, Ninh Thuận are calculated from Ninh Thuận Salt Field.

+ Provinces of Đắk Lắk, Khánh Hòa are calculated from Khánh Hòa Salt Field.

+ Province of Đồng Nai is calculated from Đồng Nai Salt Field.

2\. Firewood: .

+ All provinces are calculated from the provincial center.

3\. Books (publications listed in the catalog of the Ministry of Culture and Information):

 + Provinces of Cao Bằng, Hà Giang, Lào Cai, Lạng Sơn, Bắc Cạn, Thái Nguyên, Tuyên Quang, Yên Bái, Sơn La, Lai Châu, Hòa Bình, Phú Thọ, Quảng Ninh, Bắc Giang are calculated from Hanoi.

+ Provinces from Gia Lai, Kontum, Đắk Lắk, Lâm Đồng, Bình Phước are calculated from Hồ Chí Minh City.

4\. Crop Seeds:

+ For seeds produced by the province itself, the calculation starts from the production site or the provincial seed company.

 + For locally imported seeds, the calculation starts from the customs port of entry.

+ For other types of seeds purchased from central seed companies, the calculation starts from the purchasing location.

5\. Fertilizers:

a\. Imported fertilizers:

+ The provinces of Ha Giang, Lao Cai, Tuyen Quang, Yen Bai, Phu Tho are calculated from Hai Phong Port, Hanoi, Viet Tri.

+ The provinces of Cao Bang, Lang Son, Bac Can, Thai Nguyen, Son La, Lai Chau, Hoa Binh, Bac Giang are calculated from  Hai Phong Port, Hanoi.

+ The province of Quang Ninh is calculated from Halong Port, Hai Phong Port.

+ The provinces of Gia Lai, Kon Tum are calculated from Qui Nhon Port, Da Nang Port.

+ The province of Dak Lak is calculated from Qui Nhon Port, Nha Trang Port, Sai Gon Port.

+ The provinces of Lam Dong, Binh Phuoc are calculated from Sai Gon Port.

b. Lam Thao Superphosphate:

+ The provinces of Cao Bang, Ha Giang, Lao Cai, Lang Son, Bac Can, Thai Nguyen, Tuyen Quang, Yen Bai, Son La, Lai Chau, Hoa Binh, Phu Tho, Quang Ninh, Bac Giang are calculated from the warehouse of Lam Thao Superphosphate Company.

+ The province of Dak Lak is calculated from Hoa Huynh Railway Station.

+ The provinces of Gia Lai, Kon Tum are calculated from Dieu Tri Railway Station.

+ The provinces of Lam Dong, Binh Phuoc are calculated from Song Than Railway Station, Sai Gon, Long Thanh Fertilizer Plant. c. Ninh Binh and Van Dien Molten Phosphate:

+ The provinces of Cao Bang, Ha Giang, Lao Cai, Lang Son, Bac Can, Thai Nguyen, Tuyen Quang, Yen Bai, Son La, Lai Chau, Hoa Binh, Phu Tho, Quang Ninh, Bac Giang are calculated from the warehouse of Ninh Binh or Van Dien Molten Phosphate Factory.

The provinces of Gia Lai, Kon Tum are calculated from Dieu Tri Railway Station.

 + The province of Dak Lak is calculated from Hoa Huynh Railway Station.

+ The provinces of Lam Dong, Binh Phuoc are calculated from Song Than Railway Station, Sai Gon.

+ d. Ha Bac Urea:

The provinces of Cao Bang, Ha Giang, Lao Cai, Lang Son, Bac Can, Thai Nguyen, Tuyen Quang, Yen Bai, Son La, Lai Chau, Hoa Binh, Phu Tho, Quang Ninh, Bac Giang are calculated from the Northern Fertilizer and Chemicals Corporation.

+ e. Domestic NPK Fertilizer:

The provinces are calculated for transportation subsidy from the nearest production location. Only subsidies are calculated for quantities purchased from central enterprises producing with nutrient content equal to or higher than 18%, registered with the National Quality Measurement Center.

+ g. Microbial Fertilizer:

The provinces are calculated for transportation subsidy from the nearest microbial fertilizer production factory managed by the Agricultural Extension Company.

+ ANNEX II: ALLOWED LOSS RATES TO BE ADDED TO THE TRANSPORTATION SUBSIDY UNIT PRICE

 

(Pursuant to Joint Circular No. 07/2002/TTLT-BTM-UBDTMN-BTC-BKHĐT dated August 12, 2002 of the Ministry of Trade - State Committee for Ethnic Minorities and Mountainous Areas - Ministry of Finance - Ministry of Planning and Investment)
Commodity

Loss Rate
1. Iodized Salt

2. White Salt                                              3. Lighting Kerosene

0.045%/km for Class 1 and Class 2 roads                                             0,5%

0.09%/km for Class 3 roads and above                                         1%

4. Books                  + 5. Crop Seeds As prescribed by the competent authority

                                                   + 6. Fertilizers

For imported fertilizers and Ha Bac urea, Decision No. 75 dated                                                   0%

September 5, 1991 of the State Planning Commission shall apply as follows:                    Waterway transport and handling charges are calculated at 0.4%.

Road transport and handling charges:                                            0,5%

 

- Under 50 km
- 50 to 100 km

+ - Over 100 km

+ Road transport and handling:

- Under 50 km                 = 0,25%

- 50 to 100 km            = 0,3%

- Over 100 km                = 0,35%