CIRCULAR

Guidelines for Implementing Directive No. 14/TTg dated January 16, 1981 of the Prime Minister on Local Budgets Receiving Encouragement Revenue from the Transfer of Pork and Beef Products to the Central Government

Point 1 of Directive No. 14/TTg dated January 16, 1981 of the Prime Minister stipulates:

"... State-owned commerce is exempt from slaughter tax.

- To encourage localities to actively purchase and transfer pork and beef products to the central government, the local budget shall receive encouragement revenue from the transfer of products to the central government at 10% based on the directed purchase price set by the state."

The Ministry of Finance provides guidelines for submitting encouragement revenue to the local budget as follows:

I. Basis for Calculating Encouragement Revenue for the Local Budget:

Currently, localities transfer pork and beef products to the central government at various prices (directed price, bilateral contract price, negotiated price, etc.). According to Directive No. 14/TTg, the local budget receives 10% of the total quantity of products (including those sold at higher prices) transferred to the central government based on the directed purchase price set by the state.

Example: A locality transfers 1,000 tons of pork to the central government, including 300 tons at the average directed price of 4,000 dong per ton and 700 tons at the negotiated price of 15,000 dong per ton. The encouragement revenue of 10% for the local budget is calculated as follows:

The directed price is 4,000 dong per ton of live pig.

10% of 4,000 dong is 400 dong.

The total encouragement revenue that the local budget enjoys for live pork is 400 dong x 1,000 tons = 400,000 dong. For live cattle and buffalo, it is calculated similarly.

Formula for calculating encouragement revenue from transferring pork and beef products:

Total encouragement revenue from transferring products = Quantity of products transferred to the Central Government x Directed price x 10%

For simplicity, it is now stipulated that for each ton of live pork (不分等级) transferred to the central government, the local budget enjoys an encouragement revenue of 400 dong, and for each ton of live cattle and buffalo, the local budget enjoys an encouragement revenue of 250 dong.

II. Entities Submitting Encouragement Revenue to the Local Budget:

a) State-owned economic organizations at the central level: When the first-level purchasing companies under the Ministry of Domestic Trade and Foreign Trade purchase pork and beef products from localities, they must submit an encouragement revenue of 10% based on the directed purchase price to the local budget where the product is transferred.

Two cases are distinguished:

- In the case where central economic organizations directly purchase from units or individuals (state-owned domestic local farms, cooperatives, and farmers), these central economic organizations must directly submit the encouragement revenue to the local budget when paying the purchase price to the unit or individual. The State Bank will base its deduction from the account of the central economic organization's deposit to submit the encouragement revenue from transferring products to the local budget according to the payment receipt.

- In the case where central economic organizations purchase products through local purchasing organizations (second-level purchasing companies), the local purchasing organizations must submit the encouragement revenue from transferring products to the local budget when receiving payment from the central economic organizations according to the following formula:

Example: In the case of purchasing at the directed price:

4,000 dong + 640 dong (16% profit margin) + 400 dong = 5,040 dong per ton

In the case of purchasing at the negotiated price:

15,000 dong + 700 dong + 400 dong = 16,100 dong per ton

(700 dong is the 16% profit margin calculated on the directed price and additional expenses).

b) Localities (provinces, cities) consuming and directly organizing the receipt of pork and beef products produced locally according to the distribution plan of the Ministry of Domestic Trade must also pay 10% based on the directed purchase price to the provincial or city budget where the production takes place, and apply the provisions as stated in point a above.

c) In the case where military units under the People's Armed Forces directly receive pork and beef products from local production areas according to the directed price and distribution plan of the Ministry of Domestic Trade (within the quota allocated to the central government at the directed price), the Provincial Financial Departments will base their submission of the encouragement revenue of 10% to the local budget on the certificates provided by the trading companies distributing pork and beef products to the military and confirmed by the military units having received the full quantity, sent to the Ministry of Finance.

d) Central state-owned entities such as central state-owned farms, central breeding farms, etc., when transferring products to the central government (pork and beef) do not need to submit the encouragement revenue of 10%.

e) All agencies, enterprises, schools, etc., slaughtering pigs and cattle for the improvement of cadres' and workers' living standards, and cooperatives operating meat businesses must pay the slaughter tax according to Circular No. 03-TC/CTN dated February 16, 1981 of the Ministry of Finance.

All entities mentioned in points a, b, and c above must submit the encouragement revenue to item 75 of category 1 "Encouragement Revenue from Localities Transferring Livestock to the Central Government".

To encourage counties and communes to fulfill their obligations in transferring products to the central government, the provincial or city budget may allocate a portion of this encouragement revenue to the county or commune budgets where the pork and beef products are transferred to the central government. The ratio is determined by the Provincial People's Committee.

This circular takes effect from June 1, 1981.