Circular No. 100/2005/TT-BTC guiding certain points on the organization and implementation of the state budget estimate for 2006

CIRCULAR

Guidelines on certain aspects regarding the organization and implementation of the budget estimate ngân sách nhà nước năm 2006

Pursuant to Resolution No. 47/NQ-QHXI dated November 1, 2005 of the National Assembly, Session VIII, Term XI on the state budget estimate for 2006;

Pursuant to Resolution No. 48/NQ-QHXI dated November 3, 2005 of the National Assembly, Session VIII, Term XI on the allocation of the central state budget estimate for 2006;

Pursuant to Decision No. 1194/QĐ-TTg dated November 9, 2005 of the Prime Minister on the allocation of the state budget estimate for 2006;

The Ministry of Finance issues guidelines on certain aspects regarding the organization and implementation of the state budget estimate for 2006 as follows:

A. On the allocation and assignment of the state budget estimate for 2006:

I. On the classification of revenue sources and expenditure responsibilities for local budgets:

1. Year 2006 is the final year of the period for stabilizing the budget between the central budget and local budgets (2004 - 2006), implementing the stabilization of the percentage share of revenue between the central budget and each local budget according to Resolution No. 423/2003/NQ-UBTVQH dated November 12, 2003 of the Standing Committee of the National Assembly; stabilizing the amount of supplementary balance from the central budget to each local budget at the level assigned by the Prime Minister for each province and centrally-administered city under Decision No. 194/2004/QĐ-TTg dated November 7, 2004.

2. The classification of revenue sources and expenditure responsibilities between local government budgets at various levels, the ratio of revenue distribution among local government budgets at different levels, and the amount of supplementary balance from higher-level budgets to lower-level budgets shall be implemented stably in accordance with the resolutions of People's Councils and decisions of People's Committees during the stabilization period.

3. Continue to implement the mechanism for balancing land use fee revenues in the local budget to invest in building economic and social infrastructure guaranteed by the state budget. Management and accounting of revenues and expenditures from the state budget sourced from land auction fees shall be carried out strictly in accordance with the provisions of the State Budget Law and guiding documents of the Law from the stage of preparing the budget estimate, organizing its implementation, and settling accounts into the state budget, paying attention to the following main points:

- Based on the local land use plan, the potential for land use fee revenues from auctions, and the needs for compensation and support for people whose land has been expropriated and the needs for investment in infrastructure projects funded by the state budget as stipulated by law, the People's Committee directs the finance department to consolidate these revenue and expenditure tasks into the annual budget estimate to be submitted to the same-level People's Council for decision.

- Based on the annual budget estimate decided by the People's Council, the People's Committee assigns the finance department to coordinate with relevant units to organize the collection and expenditure from land use fee revenues and settle accounts into the state budget in accordance with the prescribed regulations.

In cases where organizations or individuals advance funds for compensation and support for people whose land has been expropriated to invest in infrastructure projects funded by the state budget, then subsequently conduct land auctions to collect land use fees, the land use fee revenues used to repay the advanced funds must be fully accounted for in the state budget (record land use fee revenues corresponding to the advanced funds; record basic construction expenditures).

In 2006, when submitting the local budget expenditure estimate to the People's Council for decision and allocation, provincial and centrally-administered municipal People's Committees should pay attention to the following points:

4.1. Funding for the Preferential Treatment Ordinance for those who have made contributions to the revolution, including funding for the regime for those who participated in the resistance war and their children affected by toxic chemicals, is guaranteed by the central budget and allocated through the provincial finance departments to implement payments to the beneficiaries according to the prescribed regime.

For the funding allocated in the balanced budget estimate for local budgets from 2004 onwards to implement the regime for those who participated in the resistance war and their children affected by toxic chemicals, which continues to be stable in 2006, the provincial People's Committee reports to the same-level People's Council to transfer this funding to other social security expenditure tasks within the locality (social assistance for social groups according to the prescribed regime, support for the elderly...).

4.2. In 2006, in accordance with the National Assembly Resolution, the central budget has increased targeted funding for local budgets to increase investment in educational and healthcare facilities corresponding to the entire or part of the lottery revenue of the locality according to the mechanism: localities with lottery revenue up to 50 billion VND are supplemented with targeted funding to increase investment by 100% of the revenue; localities with lottery revenue exceeding 50 billion VND are additionally invested by 50% of the excess revenue.

Based on the level of supplementation from the central budget in 2006 for this purpose, the provincial People's Committee submits to the same-level People's Council to allocate only for infrastructure projects for education, training, vocational training, and medical facilities in accordance with the prescribed regime, not for other purposes.

4.3. Implementing Circular No. 1561/TTg-KTTH dated October 22, 2005 of the Prime Minister on the mechanism for supporting local budgets from the central budget for localities facing difficulties to implement the allowance system for non-professional cadres at village, commune, and ward levels as stipulated in Decree No. 121/2003/NĐ-CP dated October 21, 2003 of the Government, as follows:

- The unified support level for positions specified in Clause 3 and 4, Article 2 of Decree No. 121/2003/NĐ-CP is 120,000 VND/person/month (excluding deputy military commanders implementing the Civil Defense Militia Law and deputy police officers and police officers implementing the Police Law No. 03/2003/NĐ-CP dated January 14, 2003 of the Government).

Specifically, for the position of village head, from 2005 onwards, the central budget has supported 40,000 VND/person/month, now adjusting the support level to 120,000 VND/person/month.

- Based on the above support level, provinces and centrally governed cities shall determine the financial needs for supporting the implementation of allowances for non-professional cadres at commune and village levels to be included in their overall financial needs for implementing salary reform in 2006, and balance with local budget sources to ensure compliance with prescribed regulations; for those localities that cannot secure sufficient funds for salary reform, the central government budget will supplement the local government budget to implement such reforms.

II. Allocation and Budgeting of State Budget:

1. Allocation and Budgeting of State Revenue:

1.1. Ministries, central agencies, provincial People's Committees, and centrally governed city People's Committees shall assign revenue collection tasks for 2006 to subordinate units and lower-level authorities to ensure a higher target of at least 3-5% over the state revenue budget assigned by the Prime Minister and guided by the Ministry of Finance.

1.2. The allocation and budgeting of state revenue must be based on a comprehensive assessment of the results of state revenue collection in 2005 and the period from 2001 to 2005; taking into account tax laws, revenue policies, economic growth rates of each sector and field, specific business development capabilities of enterprises, organizations, and individual businesses; requirements to implement measures against revenue loss, trade fraud, and overdue taxes.

2. Allocation and Budgeting of State Expenditure:

2.1. Allocation and Budgeting of Development Expenditure:

2.1.1. Ministries and central agencies must allocate and budget development expenditure in accordance with investment management and construction regulations, while noting the following points:

(1) Allocate the budget for basic construction investment to repay all previously advanced budget funds that need to be recovered into the 2006 budget, counterpart funds for projects using ODA; settle outstanding construction debts of projects funded by the state budget according to prescribed regulations.

(2) Allocate funds to continue important ongoing projects to complete them according to the project schedule.

(3) After allocating funds for the aforementioned tasks, allocate funds for new projects that meet the conditions for funding according to prescribed regulations.

2.1.2. Provinces and centrally governed cities must allocate and budget development expenditure in accordance with investment management and construction regulations, while ensuring the following main requirements:

(1) Allocate the budget for basic construction investment to settle outstanding construction debts of projects funded by the state budget according to prescribed regulations; fully repay (both principal and interest) loans and advances due: funds raised as stipulated in Clause 3, Article 8 of the State Budget Law; preferential loans for implementing programs to reinforce irrigation canals, rural roads, village infrastructure, and aquaculture infrastructure; central government advanced funds that need to be recovered into the 2006 budget...

(2) Ensure sufficient counterpart funds for projects using ODA.

(3) Allocate funds to implement programs and projects to mitigate the consequences of natural disasters...

(4) For important programs, projects, and tasks of localities, pay attention to the following points:

+ Allocate sufficient local government budget funds according to prescribed regulations for programs and tasks decided by the Government, such as: The Program to Support Production Land, Housing Land, Housing, and Drinking Water for Poor Ethnic Minority Households with Difficult Livelihoods under Decision No. 134/2004/QĐ-TTg dated July 20, 2004 of the Prime Minister; The Project to Upgrade District Hospitals and Regional General Hospitals for the period 2005-2008 under Decision No. 225/2005/QĐ-TTg dated September 15, 2005 of the Prime Minister and guidance in document No. 14049/BTC-NSNN dated November 7, 2005 of the Ministry of Finance...

+ For programs, projects, and tasks implemented from supplementary targeted funds from the central government budget, they must be allocated strictly according to the assigned objectives and budgets.

(5) Allocate funds to continue important ongoing projects to complete them according to the project schedule;

(6) Allocate and budget development expenditure for subordinate agencies and lower-level authorities in the fields of education, training, and vocational training; science and technology fields must not be lower than the development expenditure budget for these fields assigned by the Prime Minister.

(7) After allocating funds for the aforementioned tasks, allocate funds for new projects that meet the conditions for funding according to prescribed regulations.

2.2. Allocation and Budgeting of Expenditure for Economic and Social Services, National Defense, Security, Administrative Management, Party, and Mass Organizations (including salary reform expenditure under Decree No. 204/2004/NĐ-CP dated December 14, 2004 of the Government):

2.2.1. Ministries and central agencies must allocate and budget state expenditure for economic and social services, national defense, security, administrative management, the Party, and mass organizations (including salary reform expenditure under Decree No. 204/2004/NĐ-CP dated December 14, 2004 of the Government) to subordinate agencies and units in accordance with the total and detailed budgets assigned by the Prime Minister and guided by the Ministry of Finance; ensure funds for important tasks prescribed by law and decided by the Prime Minister; allocate budgets in accordance with prescribed standards and norms.

2.2.2. Provinces and centrally governed cities must allocate and budget state expenditure for economic and social services, national defense, security, state management, the Party, and mass organizations (including salary reform expenditure under Decree No. 204/2004/NĐ-CP dated December 14, 2004 of the Government) for 2006 to subordinate agencies and units and lower-level authorities in accordance with the State Budget Law; while noting the following points:

- The allocation and budget for education and training, vocational training, science and technology sectors in the State budget for 2006 for subordinate agencies and units, lower-level authorities shall not be lower than the level allocated by the Prime Minister; ensure the level guided by the Ministry of Finance for national defense, security, public health services, cultural information services, and environmental services.

- The upper-level budget unit allocating and assigning the State budget to lower-level units must match the detailed budget assigned by the People's Committee in terms of total amount and specific items.

- Ensure funding to implement the systems, policies, and tasks decided by the Government and the Prime Minister from the central budget support funds for localities and local budget sources according to the provisions (attached Appendix to this Circular), noting the following points:

+ Implement Circular No. 5490/VPCP-KTTH dated September 26, 2005, of the Government Office regarding the adjustment of the State budget for free medical examination and treatment, starting from 2006, allocate funds for medical examination and treatment for poor people based on the new poverty standard stipulated in Decision No. 170/2005/QĐ-TTg dated July 8, 2005, of the Prime Minister at a rate of VND 60,000/person/year; and free medical examination and treatment for children under six years old according to the Law on Child Protection, Care, and Education at a rate of VND 90,000/child/year.

+ Ensure funding to implement scholarship systems for boarding and non-boarding ethnic minority students as prescribed (including scholarships for ethnic minority students studying vocational courses in boarding schools as stipulated in Decision No. 267/2005/QĐ-TTg dated October 31, 2005, of the Prime Minister).

2.3. Allocation and assignment of the State budget to implement national target programs, projects, and tasks in 2006:

Based on the budget for implementing national target programs, important projects, and other objectives assigned by the Prime Minister, Ministries, central agencies, provincial People's Committees, and centrally-administered city People's Committees shall allocate and assign budgets to subordinate units and lower-level authorities to ensure compliance with the assigned targets. At the same time, integrate national target program funds on their respective territories according to regulations to effectively utilize these funds; in addition to targeted support funds from the central budget, provinces and centrally-administered cities shall proactively arrange local budget and lawful financial resources to implement these programs.

2.4. Regarding the budget allocation and financial mechanism creation for implementing salary reform in 2006, follow Circular No. 89/2005/TT-BTC dated October 13, 2005, of the Ministry of Finance, paying attention to the main contents below:

(1) On the source of funds for implementing the adjustment of the minimum wage and allowances:

- Ministries, central agencies, and provinces, centrally-administered cities, in allocating and assigning the State budget to subordinate units and lower-level budgets, must determine and assign the task of saving 10% of the additional regular expenditure in the 2006 budget compared to the 2005 budget already assigned; not less than the savings level announced by the Ministry of Finance for salary reform implementation. Local government budgets at all levels must manage and concentrate the 10% savings of their affiliated agencies and units (excluding self-financing public institutions operating under the financial mechanism prescribed by the Government and state agencies operating under the self-management and responsibility mechanism for using staff quotas and administrative management expenses as stipulated in Decree No. 130/2005/NĐ-CP dated October 17, 2005, of the Government) when determining the source of funds for salary reform of each agency and unit under their budget.

- Localities shall use 50% of the increased local budget revenue forecast for 2006 compared to the 2005 budget assigned by the Prime Minister (excluding the increase from land use fees) to implement salary reform and adjust subsidies for retired village cadres according to Decrees No. 118/2005/NĐ-CP dated September 15, 2005, and No. 119/2005/NĐ-CP dated October 13, 2005, of the Government.

- Any remaining funds after ensuring the needs for implementing Decree No. 204/2004/NĐ-CP dated December 14, 2004, of the Government in 2006 (if any) from the following sources: 50% of the increased local budget revenue (excluding the increase from land use fees) forecast for 2005 compared to the 2004 budget assigned by the Prime Minister; 50% of the increased local budget revenue (excluding the increase from land use fees) realized in 2005 compared to the 2005 budget assigned by the Prime Minister; 10% of the savings in regular expenditure (excluding salaries with salary characteristics) in the 2005 budget compared to the 2003 budget; 40% of the retained proceeds from public services (35% for the health sector after deducting drug, blood, transfusion, and chemical costs) of agencies and units after deducting the amount used for additional salary increases according to the minimum wage stipulated in Decree No. 03/2003/NĐ-CP dated January 15, 2003, and the salary coefficient stipulated in Decree No. 25/CP dated May 23, 1993, of the Government according to the 2006 staffing plan; unused funds for additional salary increases in 2005 transferred over; the estimated amount allocated from the central budget in 2006 to implement salary reform according to Decree No. 204/2004/NĐ-CP dated December 14, 2004, of the Government.

(2) If the above measures are insufficient to ensure the source of funds for salary reform in 2006, the central budget will provide support. In cases where the determined source of funds for salary reform according to the above provisions of budgetary units at various levels and local government budgets exceeds the actual need for salary reform implementation, continue transferring this source to the next year to create funds for salary reform, and do not use it for other purposes.

2.5. Regarding subsidy funds for postal rates, prices, and free provision of certain policy goods (the supplementary budgetary funds from the central government with specific objectives for local budgets). Implementing the resolutions of the National Assembly and the Government, based on the level of support from the central budget and the balanced budget within the local state budget estimate, the People's Committee at the provincial level shall submit to the People's Council at the same level for decision on the use of subsidy funds for prices, postal rates, and free provision of certain policy goods in 2006 in accordance with local realities (types of goods, products, support standards, areas, beneficiaries of price and postal rate subsidies and free provision of certain policy goods); simultaneously, report to the Ministry of Finance and the Committee for Ethnic Minorities for monitoring and guidance during the implementation process.

2.6. Allocate contingency reserves in the budgets of all levels of local authorities in accordance with the State Budget Law, not lower than the level of contingency reserves assigned by the Prime Minister to proactively implement disaster prevention, mitigation, and aftermath handling, especially avian influenza prevention; implement the emergency action plan for avian influenza and human pandemic influenza according to Directive No. 34/2005/CT-TTg dated October 15, 2005 of the Prime Minister.

At the same time, the People's Committees of provinces and centrally-administered cities shall direct financial agencies at all levels to actively develop financial-budget plans to serve avian influenza and human pandemic influenza prevention work according to the emergency action plan approved by the Prime Minister and the local action program as guided in Circular No. 13852/BTC-NSNN dated November 3, 2005 of the Ministry of Finance.

2.7. In the process of deciding on the allocation of revenue and expenditure budget estimates, if the People's Council decides on a higher revenue budget estimate than that assigned by the higher authority, then the additional expenditure budget estimate (excluding increases from land use fees) must allocate at least 50% for salary reform; the remaining part will supplement the local budget reserve, increase reserves to be proactive in budget management, implement important tasks, systems, and policies decided by competent authorities, and handle payments for unfinished construction projects according to regulations.

3. On the timing of allocation and assignment of budget estimates:

Based on the revenue and expenditure budget estimates assigned by the competent authority, Ministries, central agencies, and People's Committees at all levels shall submit to the People's Councils at the same level for decisions on the national revenue budget estimates on their respective territories, local expenditure budget estimates, and the allocation of their own budget estimates to ensure the assignment of revenue and expenditure budget estimates for 2006 to each budget user unit before December 31, 2005, and organize the public disclosure of the budget estimates in accordance with the State Budget Law and Decision No. 192/2004/QĐ-TTg dated November 16, 2004 of the Prime Minister on the issuance of the Financial Disclosure Regulations for state budgets at all levels, budgetary units, organizations supported by the state budget, and construction investment projects using state budget funds. Among which, note the following points:

3.1. The People's Committee at the provincial level, based on the Prime Minister’s decision on the assignment of revenue and expenditure budget tasks, shall submit to the People's Council at the same level for decisions on local revenue and expenditure budget estimates, provincial budget allocation plans, and the amount of provincial budget supplements to lower-level budgets before December 10, 2005; at the same time, based on the Resolution of the Provincial People's Council, assign revenue and expenditure tasks and provincial budget supplements to each agency and unit under the province, and to each district, county, town, and city under the province.

The People's Committee at the provincial level is responsible for reporting the results of budget decisions and allocations to the Ministry of Finance no later than five days after the People's Council decides on the budget estimates in accordance with Article 40 of Decree No. 60/2003/NĐ-CP dated June 6, 2003 of the Government detailing and guiding the implementation of the State Budget Law and Point 5.3 Section 5 Part III of Circular No. 59/2003/TT-BTC dated June 23, 2003 of the Ministry of Finance.

- The People's Committee at the district level, based on the decision of the People's Committee at the provincial level on the assignment of revenue and expenditure budget tasks, shall submit to the People's Council at the same level for decisions on district revenue and expenditure budget estimates and district budget allocation plans before December 20, 2005; at the same time, based on the Resolution of the District People's Council, assign revenue and expenditure tasks and district budget supplements to each agency and unit under the district, and to each commune, ward, and town.

- The People's Committee at the commune level, based on the decision of the People's Committee at the district level on the assignment of revenue and expenditure budget tasks, shall submit to the People's Council at the same level for decisions on commune revenue and expenditure budget estimates and commune budget allocation plans, and implement the allocation of regular expenditure budget estimates according to the categories in the State Budget Manual as guided by Circular No. 7541/TC-NSNN dated July 8, 2004 of the Ministry of Finance, send to the State Treasury where transactions take place (one copy) as the basis for payment and expenditure control before December 31, 2005.

3.2. Based on the 2006 revenue and expenditure budget estimates assigned by the Prime Minister and the People's Committees, state agencies at the central and local levels, and primary budgetary units shall allocate and assign budget expenditure estimates to subordinate budgetary units in accordance with Decree No. 60/2003/NĐ-CP dated June 6, 2003 of the Government detailing and guiding the implementation of the State Budget Law and Circular No. 59/2003/TT-BTC dated June 23, 2003 of the Ministry of Finance guiding the implementation of the aforementioned decree, among which note the following points:

- Level I budget units shall prepare plans for allocating regular expenditures to subordinate budget-using units, detailing to the Type and Item of the State Budget Classification, divided into four expenditure groups, to be submitted to the financial authority at the same level for review; among which, a separate source of savings of 10% must be allocated for salary reform and included in the personal payment expenditure group. For expenditures with seasonal or occasional nature such as basic construction investment, procurement, major repairs, and other non-recurring expenditures, they must be estimated according to quarterly progress and allocated together with the annual budget plan.

- Specifically, for state management agencies implementing the self-management mechanism, responsible for staffing and administrative expenses according to Decree No. 130/2005/NĐ-CP dated October 17, 2005 of the Government, and for public service units with income implementing the financial autonomy system as prescribed by the Government, when allocating the budget expenditure plan, they must separately allocate: the portion of the budget assigned for financial autonomy according to regulations, to be included in other expenditure groups; the portion not assigned for financial autonomy, to be allocated according to the four expenditure groups specified in Circular No. 59/2003/TT-BTC dated June 23, 2003 of the Ministry of Finance; in both parts mentioned above, a separate source of savings of 10% must be allocated for salary reform.

- Within seven working days from the date of receipt of the budget allocation plan, the financial authority shall issue a notification on the results of the review. If the financial authority agrees with the allocation plan, the head of the budget-allocating agency or unit shall immediately allocate the budget to the subordinate budget-using units, simultaneously sending it to the financial authority, the State Treasury at the same level (a summary of all units), and the State Treasury where transactions take place (sent through the budget-using unit for detailed units). In case the financial authority requests adjustments, within three working days from receiving the financial authority's document, the budget-allocating agency or unit shall accept and adjust; if there is no agreement on the adjustment content, report to the competent authority for examination and decision in accordance with Point 1.5, Section 1, Part IV, Circular No. 59/2003/TT-BTC dated June 23, 2003 of the Ministry of Finance.

- In cases where Level I budget units have not allocated or transferred the budget to budget-using units after December 31, 2005, the financial authority and the State Treasury shall temporarily provide salaries and other items with the nature of salaries, business fees, official fees, and other necessary expenditures to ensure the operation of the machinery, excluding procurement of equipment and maintenance.

- In cases where Level I budget units have not allocated or have not fully allocated the assigned budget after December 31, 2005, the financial authority shall aggregate and report to the competent authority to reduce the expenditure budget of the unit to transfer to other agencies or units or to replenish reserves in accordance with the Government's regulations.- Except for tasks that were not clearly determined to be implemented by specific units at the time of allocation and transfer of the budget, but the Level I budget unit must report and obtain approval from the financial authority at the same level for delayed allocation.

- For amounts temporarily advanced or provided that need to be recovered, but the Level I budget unit does not clearly specify the budget source for recovery when allocating or transferring the budget to budget-using units; to ensure the recovery of these advances, while waiting for the competent authority to adjust the allocation and transfer of the budget, the financial authority and the State Treasury may retain the corresponding amount of funds and promptly notify the unit and the competent authority responsible for the budget allocation.

B. Management and Operation of the State Budget:

I. Organization and Management of Revenue, Strengthening Prevention of Revenue Losses:

1. People's Committees at all levels, Tax Authorities, Customs, and other responsible agencies shall implement revenue collection work from the beginning of the year, ensuring correct, full, and timely collection in accordance with the law. Implement tax administrative reforms, simplify and make transparent customs procedures, expand the application of electronic customs to facilitate businesses in production, business operations, and fulfillment of their obligations to pay the state budget; properly organize dialogues with businesses to promptly address difficulties faced by businesses in implementing state tax policies; implement measures to inspect, control, prevent smuggling, commercial fraud, and tax evasion; promptly collect and recover all overdue state budget debts.

From 2006 to 2010, Provincial and Municipal People's Committees shall implement exemption of corporate income tax, resource tax, and business registration tax at the fishing and salt production stages; reduce corporate income tax equivalent to the training costs for enterprises accepting ethnic minority labor to enable enterprises to have funding for training and vocational education for these workers in accordance with the Government's regulations and the guidance of the Ministry of Finance.

2. Ministries, central agencies, Provincial and Municipal People's Committees directly under the Central Government shall fully and promptly implement the Law Amending and Supplementing Certain Provisions of the Special Consumption Tax Law and the Value Added Tax Law adopted by the National Assembly.

3. Tax and Customs authorities shall strengthen the inspection of value-added tax refunds, ensuring strict and timely management in accordance with regulations, creating favorable conditions for businesses. At the same time, effectively implement post-refund and post-clearance inspections to prevent fraud in tax refunds and state budget payments. Cooperate with relevant agencies to strictly handle violations of state budget collection laws.

4. Strengthen land management and use from the planning stage, issuance of land use certificates, utilization, and transfer of land to manage and collect the state budget fully and promptly in accordance with established regulations.

II. On Management and Operation of the State Budget:

1. Organization and Operation of the State Budget Plan:

1.1. For the central budget:

- In cases where revenue exceeds the budget estimate, the increased revenue shall be used to implement salary reform (at least 50% of the increased revenue); settle construction debts, supplement development investment capital; increase budget reserves for disaster prevention and mitigation, disease control, and urgent and unexpected important tasks.

- Implement an excess revenue bonus system for local budgets, with a bonus rate of 30% for the portion of excess revenue from shared tax revenues between the central budget and local budgets compared to the budget estimates assigned by the Prime Minister, but not exceeding the amount of increased revenue from the central budget's share in 2006 compared to the actual implementation in 2005 from shared tax revenues between the central budget and local budgets.

For Hanoi City and Ho Chi Minh City, the excess revenue bonus mechanism shall be implemented according to the provisions of Decree No. 123/2004/NĐ-CP dated May 18, 2004, Decree No. 124/2004/NĐ-CP dated May 18, 2004 issued by the Government, and other guiding documents.

- The use of bonus money, management, accounting, and reporting time shall be carried out in accordance with the provisions of Circular No. 59/2003/TT-BTC dated June 23, 2003 issued by the Ministry of Finance.

1.2. Regarding local budgets:

- In cases where local budget revenue exceeds the budget estimates assigned by the Prime Minister and the higher-level People's Councils, at least 50% (excluding land use fee revenue) shall be used to increase sources for implementing salary reform; the remaining 50% shall be used to increase expenditures for settling construction debts, supplementing funds to accelerate the completion of important urgent projects; increasing budget reserves for disaster prevention and mitigation, disease control, and implementing urgent and unexpected important tasks.

The People's Committee shall develop a plan for using the increased local budget revenue, unify opinions with the Standing Committee of the same-level People's Council before implementation; report the results of implementation to the same-level People's Council at the nearest session.

- In cases where local budget revenue does not meet the budget estimates, the People's Committee shall develop a plan to adjust and reduce expenditures accordingly, focusing on cutting or postponing non-essential expenditure tasks, and report to the Standing Committee of the same-level People's Council for consideration and decision.

1.3. In organizing state budget implementation, ministries, central agencies, and localities need to pay attention to the following issues:

- Direct relevant agencies and units to cooperate with financial agencies to proactively plan to allocate funds from the beginning of the year for important projects according to regulations, especially for dike and irrigation construction, flood and disease prevention, and post-flood recovery...

- Use the allocated budget to implement assigned tasks and unexpected urgent expenditures. In 2006, only address additional expenditure needs outside the budget for agencies, units, and subordinates in cases of widespread natural disasters or epidemics causing significant losses beyond the capacity of the budgets of ministries and localities, and newly arising urgent tasks as stipulated by law.

- In cases where funds for certain policies such as health care expenses for the poor, free medical examinations and treatments for children under six years old in 2006 are not fully utilized, the remaining funds may be transferred to the next year for implementation, without allocating funds for other tasks.

- Regularly organize inspections and evaluations of project progress; for projects not progressing as scheduled, timely decisions or reports to competent authorities for adjustment and reallocation of funds to projects with faster progress and potential for completion but insufficient funding according to regulations.

- Direct relevant agencies and units to cooperate with financial agencies to regularly inspect the implementation of policies and regulations in units and grassroots levels. Ensure that policies and regulations are correctly applied to the intended beneficiaries and are effective, particularly those related to social policies, poverty reduction...

2. On mobilizing investment capital for basic construction:

Ministries, localities, and units must manage and use the budget in accordance with regulations and standards within the allocated budget; strictly prohibit any form of illegal appropriation, borrowing, or lending. For provinces and centrally-administered cities with the need to mobilize capital for infrastructure construction funded by provincial budgets included in the five-year investment plan decided by the provincial People's Council, they are allowed to mobilize domestic capital, but the maximum level of debt shall not exceed 30% of the annual domestic investment capital for basic construction of the provincial budget. Specifically for Hanoi City and Ho Chi Minh City, capital mobilization shall be carried out according to the provisions of Decree No. 123/2004/NĐ-CP dated May 18, 2004 and Decree No. 124/2004/NĐ-CP dated May 18, 2004 issued by the Government.

3. On budget disbursement and payment procedures:

To enhance the initiative of budget-using units and reduce administrative procedures, starting from 2006, budget management and operation shall be conducted based on the allocated annual budget. Based on the allocated annual budget, budget-using units shall withdraw expenditure budgets according to established spending standards and the progress and volume of task implementation, ensuring the principle:

- Personal payment items (salaries, allowances, social benefits...) shall ensure monthly payments according to the entitlements of individuals receiving salaries and social benefits from the state budget.

- Expenditures with seasonal characteristics or only occurring at certain times, such as basic construction investment, procurement, major repairs, and other non-recurring expenditures, shall be settled according to the progress and actual volume of work as prescribed. In cases where necessary expenditures exceed the forecasted quarterly budget but remain within the annual budget allocation, the State Treasury shall still make payments to the units and periodically compile reports to the financial authorities at the same level.

- The State Treasury shall record expenditures that have been paid out according to the provisions of the State Budget Classification (Chapter, Type, Clause, Section, Subsection). For advance payments, depending on the nature of the expenditure, they may be recorded up to the Section or Subsection level, but upon settlement, they must be detailed to the Subsection level.

- Abolish the provision regarding the preparation of quarterly budget expenditure requirements by budgetary units at all levels and budget users as stipulated in Point 2.2, Section 2, Part IV of Circular No. 59/2003/TT-BTC dated June 23, 2003, issued by the Ministry of Finance to guide the implementation of Decree No. 60/2003/NĐ-CP dated June 6, 2003, of the Government detailing and guiding the implementation of the Law on State Budget.

4. Method for transferring additional funds from the central government budget to local budgets:

Based on the additional funds allocated from the central government budget to local budgets for the year 2006 assigned by the Prime Minister, the Ministry of Finance shall provide monthly supplementary balancing before the 25th day of each month; for localities with seasonal and uneven budget revenues and expenditures throughout the year, the Ministry of Finance shall determine the monthly supplementary balancing based on the progress of revenue and expenditure tasks. For targeted supplements, the transfer of capital to localities shall be carried out according to the requirements specified for the objectives. For mobilization reserve funds and funds for the East Sea - island program, temporary advances shall be provided according to the prescribed regulations, and after the locality reports the results of the completed volume of work, settlement payments shall be made.

5. Practicing thrift, combating waste, and organizing the implementation of financial and state budget transparency:

- Ministries, central agencies, and localities shall organize and direct the full implementation of the provisions of the Law on Prevention and Combating Corruption; the Law on Thrift, Economy, and Combating Waste after their approval by the National Assembly. At the same time, they shall promptly and fully address any existing issues and violations discovered through inspection, audit, and investigation activities, which have been concluded in writing; clarify the responsibility of each organization and individual and implement accountability systems for heads of units using the state budget in managing and operating the budget when losses, waste, and improper use of the budget occur.

- Ministries, central agencies, and localities shall organize and direct budget-using units to fully implement the self-inspection financial accounting regulations as stipulated in Decision No. 67/2004/QĐ-BTC dated August 13, 2004, issued by the Minister of Finance on the issuance of "Self-Inspection Financial Accounting Regulations for Agencies and Units Using State Budget Funds" to promptly identify and correct any financial management and budgeting violations.

- Ministries, central agencies, provincial-level cities directly under the central government, budgetary units at all levels, and organizations supported by the state budget shall fully implement the autonomy and self-responsibility system and the staffing and administrative management expenses for state agencies according to Decree No. 130/2005/NĐ-CP dated October 17, 2005, of the Government; the financial autonomy system for public service units according to the Government's decree.

C. Implementation Organization:

This Circular shall take effect fifteen days after its publication in the Official Gazette and shall be implemented during the 2006 fiscal year. Ministries, central agencies, People's Committees of provinces and centrally-administered municipalities shall base this Circular to direct subordinate agencies and units and lower-level local governments to organize its implementation.

During the implementation process, if there are any difficulties, please report them promptly to the Ministry of Finance for coordination and resolution./.