Circular No. 10/TC-V1 guiding the use of financial resources under Directive No. 426/TTg of the Prime Minister on strengthening the construction of customs forces.

CIRCULAR

MINISTRY OF FINANCE DECREE NO. 10/TC-V1 JANUARY 24, 1995 GUIDELINES FOR THE USE OF FUNDS IN THE DIRECTIVE NO. 426/TTG OF THE PRIME MINISTER ON STRENGTHENING THE CUSTOMS FORCE REGARDING THE ENHANCEMENT OF CUSTOMS FORCE CONSTRUCTION

Implementing Directive No. 426/TTg dated August 16, 1994 of the Prime Minister on strengthening customs force construction.

To ensure timely, strict allocation, management, and use of funds for the Customs sector in accordance with the purpose and effectiveness stipulated in the Prime Minister's Directive, the Ministry of Finance provides guidelines for the allocation and use of funds as follows:

I. OBJECTIVES OF USE:

All funds allocated and spent for the Customs sector must be carried out strictly in accordance with the content of Directive No. 426/TTg dated August 16, 1994 of the Prime Minister.

1. Source 1: 150 billion VND extracted from import and export tax revenue.

To be used for investment in infrastructure development and procurement of equipment to modernize customs operations, serving the collection of import and export taxes and combating smuggling.

2. Source 2: 0.5% (five thousandths) of total import and export tax revenue from formal trade.

To supplement allowances for staff to motivate and encourage the Customs sector to fulfill its tax collection tasks, enhance equipment, and modernize customs operations; care for the material and spiritual life of staff; allocate part of it for rewarding agencies and units outside the sector that cooperate with Customs in fulfilling tax collection tasks and combating smuggling.

3. Source 3: 2% (two percent) of total import and export tax revenue from informal trade.

To serve the collection of import and export taxes from informal trade: allowances for staff directly involved in collecting such taxes; procurement of equipment and other expenses incurred during the tax collection process; rewards for external forces contributing to accurate and full tax collection and preventing revenue loss.

II. BASIS FOR ALLOCATION:

1. Source 1: 150 billion VND extracted from import and export tax revenue.

The 150 billion VND source is extracted from the total import and export tax revenue collected in the two years 1994 and 1995, and is included in the State Budget plan for the years 1994 and 1995.

2. Source 2: 0.5% of total import and export tax revenue from formal trade.

The amount extracted is 0.5% (five thousandths) of the total import and export tax revenue collected and managed by the Customs sector and deposited into the National Treasury (confirmed by the Treasury). It does not include amounts collected under Decision No. 180/TTg dated December 22, 1992 of the Prime Minister regarding the establishment of a fund to combat illegal business activities and Decision No. 151/TTg dated March 12, 1993 of the Prime Minister regarding the formation, use, and management of a price stabilization fund.

3. Source 3: 2% of total import and export tax revenue from informal trade.

The amount extracted is 2% (two percent) of the total import and export tax revenue collected and managed by the Customs sector and deposited into the National Treasury (confirmed by the Treasury). It does not include amounts collected under Decision No. 180/TTg dated December 22, 1992 and Decision No. 151/TTg dated April 12, 1993 of the Prime Minister.

From 1995 onwards, the 2% extracted from informal trade tax revenue retained by localities will be sourced from the local budget, while the portion remitted to the central government budget will be extracted from the central government budget.

III. DISTRIBUTION AND USE:

1. Source 1: 150 billion VND extracted from import and export tax revenue.

To be used entirely for investment in infrastructure and procurement of equipment to support the collection of import and export taxes and the fight against smuggling for the entire Customs sector.

2. Source 2: 0.5% (five thousandths) of total import and export tax revenue from formal trade.

- Allocate a portion of the extracted funds to provide responsibility allowances for the Customs sector, supplementary allowances for units and individuals performing duties in difficult, hazardous, remote, border, and island areas to ensure reasonable income for Customs staff. The total amount of these allowances, when added to existing allowances (as stipulated in Decree No. 25/CP dated May 23, 1993 of the Government on the temporary regulations of new salary systems for civil servants, administrative officials, and armed forces), shall not exceed 70% (seventy percent) of the basic salary fund of the entire sector.

- Allocate 25% (twenty-five percent) of the extracted funds to establish a collective welfare fund and a sector-wide reward and incentive fund. The average expenditure per person for both funds shall not exceed six months' basic salary.

- Allocate 10% (ten percent) of the extracted funds to cover training and capacity building for Customs staff; implementing promotional activities; organizing seminars to gather experiences; providing information to facilitate the modernization of Customs operations.

- Allocate 3% (three percent) of the extracted funds to reward agencies and units outside the sector that have cooperated with Customs in fulfilling tax collection tasks and combating smuggling.

- The remaining funds after allocating for the above purposes shall be used to establish a procurement fund and a small-scale construction fund, and to set aside funds for the beginning of the next year. The procurement fund is only to be used for purchasing machinery and equipment to support supervision, management, investigation, anti-smuggling, and tax collection operations. The small-scale construction fund is to be used for constructing and repairing ports, warehouses, and facilities to support the Customs sector's tax collection operations.

3. Source 3: 2% (two percent) of total import and export tax revenue from informal trade.

- Extract a portion of the funds to provide supplementary allowances for staff directly responsible for collecting informal trade taxes (in addition to the allowances stipulated in Point 2, Section III) up to a maximum of 30% of the basic salary.

- Extract 10% (ten percent) of the funds to reward external forces cooperating in the collection of informal trade taxes.

- The remaining funds after allocating for the above purposes shall be used for direct expenses and the procurement of equipment to support the collection of informal trade taxes.

IV. MANAGEMENT AND ALLOCATION:

1. Source 1: 150 billion VND extracted from import and export tax revenue.

The General Customs Department shall prepare detailed plans for using the capital (150 billion VND) over the two-year period of 1994 and 1995, and submit these plans quarter-by-quarter to the Ministry of Finance. Based on the unified plan agreed upon by the relevant ministries, the Ministry of Finance will allocate funds to the General Customs Department according to the progress of each spending item.

Allocation for basic construction, repair, and upgrading of projects must be carried out in accordance with Decree No. 177/CP dated October 20, 1994 of the Government on the issuance of regulations on investment management and construction; and current state policies.

Allocation for purchasing machinery, equipment, and business tools must be made through contracts and price notifications, with payment and settlement of signed contracts. In cases of purchases from abroad, foreign import contracts must be established, and if foreign currency is required, plans must be submitted to the Ministry of Finance.

2/ Source of 0.5% import and export tax on formal trade and 2% import and export tax on informal trade:

Based on the annual import and export tax collection plan for formal trade and informal trade approved, divided quarterly, the General Department of Customs prepares a budget estimate of the total amount to be allocated, and sends it to the Ministry of Finance. On the basis of the unified plan by the inter-ministerial committee, the Ministry of Finance will provide provisional funding of approximately 80% of the planned revenue and according to the progress of each specific task.

At year-end, the General Department of Customs compiles the total actual revenue collected throughout the year from formal trade import and export taxes and informal trade import and export taxes deposited into the State Treasury (with confirmation from the State Treasury) for the Ministry of Finance to approve the official allocation for the year.

The entire source of 0.5% import and export tax on formal trade and 2% import and export tax on informal trade shall be centrally regulated within the industry and used for their intended purposes.

V/ SETTLEMENT:

At year-end, the General Department of Customs compiles all expenditures from the above sources to report detailed settlement to the Ministry of Finance.

VI/ IMPLEMENTATION TIMEFRAME:

- The source of 150 billion VND is to be spent over the two years 1994 and 1995.

- The source of 0.5% of the total import and export tax revenue on formal trade begins implementation from January 1, 1994.

- The source of 2% of the total import and export tax revenue on informal trade begins implementation from May 1, 1994.

All previous documents that contradict this Circular are hereby abolished.

The General Department of Customs provides detailed guidance on the use of expenditure items in this Circular throughout the industry for uniformity and is responsible for using the aforementioned funds for their intended purposes, contents, and effectiveness./.