Circular No. 103/2016/TT-BTC guiding the determination of needs, sources, and methods of expenditure to implement the adjustment of the minimum wage level according to Decree No. 47/2016/NĐ-CP dated May 26, 2016 of the Government, and the adjustment of monthly allowances for retired village cadres according to Decree No. 55/2016/NĐ-CP dated June 15, 2016 of the Government.

CIRCULAR

Guidelines for determining needs, sources, and methods of expenditure to implement adjustments
of the base salary level pursuant to Decree No. 47/2016/NĐ-CP dated May 26, 2016
of the Government, adjusting monthly allowances for retired village cadres
pursuant to Decree No. 55/2016/NĐ-CP dated June 15, 2016
of the Government

Pursuant to Decree No. 47/2016/NĐ-CP dated May 26, 2016 of the Government stipulating the base salary level for civil servants, public officials, and members of the armed forces (hereinafter referred to as "Decree No. 47/2016/NĐ-CP");

Pursuant to Decree No. 55/2016/NĐ-CP dated June 15, 2016 of the Government adjusting pension levels, allowances for loss of working capacity, monthly allowances, and allowances for kindergarten teachers who worked before 1995 (hereinafter referred to as "Decree No. 55/2016/NĐ-CP");

Pursuant to Decree No. 215/2013/ND-CP dated December 23, 2013 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Finance;

Pursuant to the proposal of the Director of the State Budget Department;

The Minister of Finance issues this Circular guiding the determination of needs, sources, and methods of expenditure to implement the adjustments mentioned above.

Article 1. General Provisions

Article 1. This Circular stipulates the determination of needs, sources, and methods of expenditure to implement:

a) Adjustments to the base salary level for individuals working in agencies, organizations, and units as prescribed in Decree No. 47/2016/NĐ-CP.

b) Adjustments to the allowance fund for those engaged in part-time activities at commune, village, and neighborhood levels according to the quota specified in Decree No. 29/2013/NĐ-CP dated April 8, 2013 of the Government amending and supplementing certain provisions of Decree No. 92/2009/NĐ-CP dated October 22, 2009 of the Government on positions, number, and some policies for cadres and civil servants at communes, wards, towns, and part-time workers at commune level.

c) Adjustments to allowances for retired village cadres pursuant to Decision No. 130/CP dated June 20, 1975 of the Council of Ministers and Decision No. 111-HĐBT dated October 13, 1981 of the Council of Ministers as prescribed in Decree No. 55/2016/NĐ-CP.

Article 2. Based on the provisions of Decree No. 47/2016/NĐ-CP, Decree No. 55/2016/NĐ-CP, and the guidelines set forth in this Circular, ministries, ministerial-level agencies, government agencies, other central agencies (hereinafter referred to as "ministries, central agencies"), and provincial people's committees (hereinafter referred to as "People's Committees") have the responsibility to:

a) Organize, guide, and compile the financial requirements and sources of funds to implement adjustments to the base salary level for agencies, units, and subordinate levels; adjust the allowance fund for part-time workers at commune, village, and neighborhood levels according to the quota; adjust monthly allowances for retired village cadres, and submit to the Ministry of Finance as prescribed.

b) Determine and allocate financial resources to pay new salaries to civil servants, public officials, and employees; allowances for retired village cadres; and allowances for part-time workers at commune, village, and neighborhood levels in accordance with the prescribed regulations and guidelines set forth in this Circular.

Article 2. Determination of financial requirements to implement adjustments to the base salary level pursuant to Decree No. 47/2016/NĐ-CP and adjustments to allowances for retired village cadres pursuant to Decree No. 55/2016/NĐ-CP

1. The total number of civil servants, public officials, and employees to determine the financial requirements for implementation is the actual number present at the reporting date (the number present on May 1, 2016).

For the number of civil servants, public officials, and employees, it shall not exceed the total number of authorized personnel assigned (or approved) for 2016.

For the number of persons working under employment contracts, only the number of persons working under indefinite-term employment contracts in administrative state agencies as stipulated in Decree No. 68/2000/NĐ-CP dated November 17, 2000 of the Government on implementing the employment contract system for certain types of work in administrative state agencies and public institutions (hereinafter referred to as "Decree No. 68/2000/NĐ-CP"); the number of persons working under indefinite-term employment contracts in Party agencies and political-social organizations applying the provisions of Decree No. 68/2000/NĐ-CP (excluding contractual workers in public institutions); and the number of persons working under labor contracts receiving salaries from the state budget belonging to the People's Army and the Public Security Force shall be included to determine the financial requirements for implementing Decree No. 47/2016/NĐ-CP.

For the number exceeding the total number of authorized personnel assigned (or approved) at the reporting date, the agency or unit must ensure the financial requirements for implementing the adjustment to the base salary level as prescribed in Decree No. 47/2016/NĐ-CP for these authorized personnel from their own financial resources in accordance with the law; they shall not be included in the financial requirements for adjusting the base salary level in 2016 of ministries, central agencies, and provinces and centrally-administered cities.

The specific authorized personnel assigned (or approved) of ministries, central agencies, and provinces and centrally-administered cities are determined as follows:

- Authorized personnel of ministries and central agencies: authorized personnel of the National Assembly, Supreme People's Court, Supreme People's Procuracy, State Audit Office according to the Resolution of the Standing Committee of the National Assembly; authorized personnel of the President's Office according to the Decision of the President; authorized personnel of central Party agencies and political-social organizations announced by the Central Organization Department; authorized personnel of the Ministry of National Defense and the Ministry of Public Security according to the decision of the competent authority; administrative state authorized personnel of other ministries and central agencies according to the decision of the Minister of Home Affairs; authorized personnel of other central agencies' public institutions according to the decision of the Minister, head of the central agency, and heads of public institutions in accordance with the law.

- Establishment quota of provinces and centrally governed cities: administrative establishment quota according to the decision of the Minister of Home Affairs; public service establishment quota according to the resolution of the provincial People's Council in compliance with the provisions of the law; establishment quota of Party agencies and local political-social organizations announced by the Central Organization Bureau. Specifically, for the establishment quota of specialized cadres and commune-level civil servants determined within the authorized quota as stipulated in Clause 1, Article 4 of Decree No. 92/2009/NĐ-CP dated October 22, 2009 of the Government.

2. The financial requirement for implementing the adjustment of the minimum wage level according to Decree No. 47/2016/NĐ-CP is determined based on the salary level according to rank, grade, and position; allowance according to the prescribed system (excluding night shift pay, overtime pay, and allowances defined by absolute amounts); the allocation fund for allowances for those engaged in non-specialized activities at the commune, village, and neighborhood levels as stipulated in Decree No. 29/2013/NĐ-CP dated April 8, 2013; contributions according to the system (social insurance, unemployment insurance, health insurance, trade union fees); the additional basic salary level specified in Decree No. 47/2016/NĐ-CP compared to Decree No. 66/2013/NĐ-CP dated June 27, 2013 according to the establishment quota specified in Clause 1, Article 2 above.

3. For individuals with a salary coefficient of 2.34 or less who have already received increased salary according to Decree No. 17/2015/NĐ-CP dated February 14, 2015 of the Government, if the total salary according to rank, grade, position, title, and any allowances (if applicable) calculated based on the basic salary of 1,210,000 VND/month in May 2016 is lower than the total salary according to rank, grade, position, title, any allowances (if applicable), and the increased salary according to Decree No. 17/2015/NĐ-CP calculated based on the basic salary of 1,150,000 VND/month in April 2016, they shall be entitled to the difference to equalize their total salary received in April 2016 and this amount will be included in the financial requirement for increased salary according to this Decree.

4. The financial requirements for implementing Decree No. 47/2016/NĐ-CP of ministries, central agencies, and provinces and centrally governed cities include additional funds for implementing the following systems and policies:

a) Health insurance contributions for family members of officers, non-commissioned officers, and soldiers in the armed forces under the Ministry of National Defense and the Ministry of Public Security; health insurance contributions for family members of personnel engaged in confidential work.

b) Allowance for responsibility for members of all levels of Party committees according to Decision No. 169-QĐ/TW dated June 24, 2008 of the Politburo; monthly allowance for serving activities of Party committees at the provincial level according to Decision No. 3115-QĐ/VPTW dated August 4, 2009 of the General Office of the Communist Party of Vietnam;

c) Additional activity fees for representatives of People's Councils at all levels;

d) Financial support to implement social insurance policies for non-specialized cadres at the commune level; support for additional allowance funds for those engaged in non-specialized activities at communes, wards, towns, villages, and neighborhoods according to the allocated budget from the central government;

đ) Support for the salaries of kindergarten teachers working under contracts according to Decision No. 60/2011/QĐ-TTg dated October 26, 2011 of the Prime Minister.

5. The financial requirement for implementing the adjustment of allowances for retired commune cadres whose monthly allowances are lower than 2,000,000 VND/month as stipulated in Decree No. 55/2016/NĐ-CP.

6. The financial requirements for implementing allowance and subsidy systems based on salary, rank, grade, or the basic salary level issued by the Government, the Prime Minister, and guidelines from central ministries and agencies after May 1, 2016 (if any) will be included in the financial requirements for implementing salary reform in 2016 and handled according to the provisions of this Circular.

Article 3. Determining sources to ensure funding requirements for implementing Decree No. 47/2016/NĐ-CP and Decree No. 55/2016/NĐ-CP

1. Funding sources for implementing Decree No. 47/2016/NĐ-CP in 2016 of ministries and central agencies:

a) For administrative state agencies, the Party, and mass organizations:

- Unspent funds from salary reform up to the end of 2015 transferred to 2016 (if any).

- Using at least 40% of retained revenue according to the regime in 2016 (the remaining portion after using it to implement decrees adjusting the minimum wage level from 2011 to the present).

- Using at least 40% of the difference between revenue and expenditure from service activities (after fulfilling the required tax payments to the State budget according to regulations).

In cases where the sources specified above are less than the funding requirement for increasing the minimum wage level according to Article 2 of this Circular, the agency or unit must arrange and allocate within the State budget expenditure plan for 2016 assigned to ensure sufficient funding.

In cases where some agencies and units have ensured the funding requirement for increasing the minimum wage level according to Article 2 of this Circular but still have surplus funds reserved for salary reform and have development needs, they should propose usage plans, report to the ministry or central agency managing them for consolidation and submit to the Ministry of Finance for agreement before use; meanwhile, they must commit to arranging from their own unit's funding to implement the additional salary adjustment according to the schedule decided by the competent authority.

b) For public service units:

- Unspent funds from salary reform up to the end of 2015 transferred to 2016 (if any).

- Using at least 40% of retained revenue according to the regime in 2016 (the remaining portion after using it to implement decrees adjusting the minimum wage level and allowances from 2015 and earlier). Specifically, the health sector uses at least 35% of retained revenue (after deducting drug costs, blood, transfusion fluids, chemicals, consumable materials directly serving patients, and salaries and allowances already included in service prices; revenue used to implement decrees on salaries and allowances from 2015 and earlier).

- Using at least 40% of the difference between revenue and expenditure from service activities (after fulfilling the required tax payments to the State budget according to regulations).

In cases where the sources specified above are less than the funding requirement for increasing the minimum wage level according to Article 2 of this Circular, units must arrange and allocate from their own revenue sources as stipulated and the State budget expenditure plan for 2016 assigned (if any) to ensure sufficient funding.

In cases where public service establishments have ensured the funding requirement for increasing the minimum wage level according to Article 2 of this Circular and still have surplus funds reserved for salary reform, with a commitment to arranging from their own unit's funding to implement the additional salary adjustment according to the schedule decided by the competent authority, they may use the remaining funds for investment, procurement, professional activities, and self-management mechanisms as currently regulated; at the end of the fiscal year, they must report to the supervising agency for consolidation and report to the Ministry of Finance the results of using these funds.

For public higher education institutions and vocational training institutions implementing autonomy under Resolution No. 77/NQ-CP dated October 24, 2014 of the Government on piloting reforms in the operation of public higher education institutions during the period 2014-2017: The unit decides the proportion of 2016 revenue to be set aside to fund salary reform and self-funding for increased salaries from its revenue, including unspent salary reform funds up to the end of 2015 (if any). The State budget will not provide additional funding to the unit for salary reform in 2016 and subsequent years of the salary adjustment schedule decided by the competent authority.

2. Funding sources for implementing Decree No. 47/2016/NĐ-CP and Decree No. 55/2016/NĐ-CP in 2016 of provinces and centrally-administered cities:

a) The financial source:

- Using 10% of additional regular expenditure savings in the 2016 budget compared to the 2015 budget (excluding salary items and items with salary characteristics) according to the Decision allocating the budget by the Ministry of Finance;

- Using additional 10% of regular expenditure savings in the 2016 budget (excluding salary items and items with salary characteristics) according to the Decision allocating the budget by the Ministry of Finance;

- Unspent salary reform funds in 2015 transferred over (if any);

- Remaining funds (if any) after ensuring salary requirements and allowances according to government decrees adjusting the minimum wage level and allowances from 2011 to the present and increasing salaries for those with a salary coefficient of 2.34 or lower in the first four months of 2016 according to the prescribed regime, from the following sources:

+ 50% of additional local budget revenue (excluding land use fee revenue) realized in 2015 compared to the 2015 budget target approved by the Prime Minister;

+ 50% of additional local budget revenue (excluding land use fee revenue) projected in 2016 compared to the 2015 budget target approved by the Prime Minister;

+ 50% of additional local budget revenue (excluding land use fee revenue) projected in 2015 compared to the 2014 budget target approved by the Prime Minister;

+ 50% of additional local budget revenue (excluding land use fee revenue) projected in 2014 compared to the 2013 budget target approved by the Prime Minister;

+ 50% of additional local budget revenue (excluding land use fee revenue) projected in 2013 compared to the 2011 budget target approved by the Prime Minister;

+ 10% of regular expenditure savings in the 2011 budget (excluding salary items and items with salary characteristics) according to the Decision allocating the budget by the Ministry of Finance;

+ 10% of additional regular expenditure savings in the 2012 budget compared to the 2011 budget (excluding salary items and items with salary characteristics) according to the Decision allocating the budget by the Ministry of Finance;

+ 10% of additional regular expenditure savings in the 2013 budget compared to the 2012 budget (excluding salary items and items with salary characteristics) according to the Decision allocating the budget by the Ministry of Finance;

+ Sources of savings from the additional 10% of regular expenditure budget for the year 2014 compared to the budget for 2013 (excluding salary items and items with the nature of salaries) according to the Decision on the allocation of the budget by the Ministry of Finance;

+ Sources of savings from the additional 10% of regular expenditure budget for the year 2015 compared to the budget for 2014 (excluding salary items and items with the nature of salaries) according to the Decision on the allocation of the budget by the Ministry of Finance;

+ Use at least 40% of the retained revenue under the regime in 2016; for service revenue, use at least 40% of the difference between revenue and expenditure from service activities (after making the required payments to the state budget as prescribed). For the health sector, use at least 35% of the retained revenue after deducting drug costs, blood, transfusion fluids, chemicals, consumable supplies directly used for patients, and salaries and allowances already included in the service price.

b) For provinces and centrally-administered cities that self-balance their local budgets, surplus sources from implementing salary reform (the central government does not supplement salaries during the period 2011-2015) and commit to ensuring funding to implement additional salary reform according to the schedule decided by the competent authority, the provincial People's Committee may decide the proportion of retained revenue to be allocated to create sources for salary reform for agencies and units with large institutional revenues on the territory, as appropriate (ensuring these agencies and units must arrange their own sources to implement salary reform according to the schedule decided by the competent authority). The central government will not supplement funds for salary reform for these localities.

c) For administrative agencies and public institutions at the local level that have surplus retained revenue to implement salary reform in 2016: the provincial People's Committee shall specify in detail, based on the guidance provided in point a and b of Clause 1 of this Article and the proportion of retained revenue as guided in point b of Clause 2 of this Article, in accordance with the actual situation of the locality.

d) For poor localities with difficult budgets; after using the sources as stipulated in point a of Clause 2 of this Article and still lacking sources to adjust the base salary for 2016, the central government will supplement the shortfall for the locality to implement.

đ) In cases where the supplementary amount from the central budget for salary reform already allocated in the local budget for 2016 exceeds the officially supplemented amount after reviewing the needs and sources for salary reform in 2016, the provinces and centrally-administered cities shall return the excess amount to the central budget.

e) In cases where the sources as stipulated in point a of Clause 2 of this Article exceed the actual need for salary reform funds in 2016 as prescribed, the provinces and centrally-administered cities shall ensure the actual implementation of the funds; the remaining amount shall be transferred to 2017; this remaining amount shall not be used for other purposes. If the local salary reform fund has a significant surplus and can meet the actual need for salary reform funds according to the schedule decided by the competent authority, a detailed report shall be submitted to the Ministry of Finance for consideration and resolution in accordance with point c of Clause 2 of Article 1 of Decision No. 383/QĐ-TTg dated April 3, 2007 of the Prime Minister.

3. The retained revenue as specified in Clauses 1 and 2 of this Article shall not be deducted for direct expenses serving the collection work when such revenue comes from works or services invested in by the State or from works or services under the exclusive rights of the State and already guaranteed by the state budget for collection activities (only direct expenses serving the collection work shall be deducted if these works or services have not been guaranteed by the state budget for collection activities). Additionally, note the following points:

a) For tuition fees of full-time students in public schools: 40% of the revenue to implement the salary reform system is calculated based on the total tuition fee revenue of the students (including the subsidy for tuition fees provided by the state budget as prescribed).

b) For tuition fees from part-time training activities, joint ventures, and other training activities of public schools: 40% of the revenue to implement salary reform is calculated based on the tuition fee revenue from these activities after excluding related costs.

c) For service revenue, joint venture activities, and other income of public institutions (excluding revenue under the Law on Fees and Charges): 40% of the revenue to implement salary reform is calculated based on the total revenue from these activities after deducting related costs.

4. Funding for the implementation of Decree No. 47/2016/ND-CP for personnel working under labor contracts as stipulated in Clause 4 of Article 2 of Decree No. 47/2016/ND-CP (excluding the labor contracts stipulated in Clause 1 of this Circular) shall be ensured by the agency or unit from the allocated state budget at the beginning of the year and other lawful sources of income.

5. Funding for the implementation of Decree No. 47/2016/ND-CP for staff and workers of the trade union system at all levels shall be ensured from the 2% trade union revenue; it shall not be consolidated into the demand for salary and additional allowance funding of central ministries and agencies and centrally-administered cities.

6. Funding for the implementation of Decree No. 47/2016/ND-CP for staff and workers of the State Bank, Vietnam Social Security, and personnel implementing unemployment insurance shall be ensured from the management budget as prescribed.

7. Funding for the implementation of Decree No. 47/2016/ND-CP for staff and workers in agencies and units that have implemented cost-sharing, where the authorized decision on cost-sharing specifies that during the cost-sharing period, the agency or unit shall arrange within the cost-sharing limit to ensure new policies (for example, Tax Agencies, Customs Agencies, Vietnam Television), shall be ensured within the total allocated funding.

Article 4. Reporting and Reviewing the Demand and Source of Funding for Implementing Decree No. 47/2016/NĐ-CP and Decree No. 55/2016/NĐ-CP

1. All ministries, central agencies, and provinces and centrally-administered cities (including those that have ensured sufficient funding to implement) shall be responsible for organizing, guiding, reviewing, and compiling reports on the demand and source of funding for implementing the aforementioned decrees in 2016, and submitting them to the Ministry of Finance no later than August 31, 2016.

2. The Ministry of Finance will not review the demand and source of funding for implementing Decree No. 47/2016/NĐ-CP in 2016 for ministries and central agencies; ministries and central agencies shall decide on the review of the demand and source of funding for implementing Decree No. 47/2016/NĐ-CP for subordinate agencies and units.

3. The Ministry of Finance shall review the demand and source of funding for implementing salary reform in 2016 for provinces and centrally-administered cities in accordance with regulations.

For poor localities with difficult budgets requiring support from the central budget to ensure the source of implementation of Decree No. 47/2016/NĐ-CP and Decree No. 55/2016/NĐ-CP, they must submit a report according to the prescribed form to the Ministry of Finance no later than December 1, 2016; if a locality fails to submit a report beyond this deadline, it will be considered to have self-assured the source, and the central budget will not provide support.

(Ministries and central agencies shall submit reports on demand and source using attached forms No. 1, 3a, 3b, and 3c; provinces and centrally-administered cities shall submit reports on demand and source using attached forms No. 2a, 2b, 2c, 2d, 2đ, 2e, 4a, and 4b).

Article 5. Method of Paying the Funding for Implementing Decree No. 47/2016/NĐ-CP and Decree No. 55/2016/NĐ-CP

1. Ministries and central agencies shall direct and guide units to proactively use sources as stipulated to pay additional salaries to cadres, civil servants, public officials, and workers in accordance with the prescribed regulations.

2. For provinces and centrally-administered cities with a larger source of funding to implement the aforementioned decrees than the required funding, these localities shall proactively use increased local budget revenue, save 10% of regular expenditures (the portion retained centrally) to supplement the funding for budgetary units at the same level and subordinate budget levels that are still lacking in funds.

3. For poor localities with difficult budgets where the required funding for implementing the aforementioned decrees exceeds the prescribed funding under this Circular:

While awaiting authorized bodies to supplement funding, higher-level budgets shall temporarily allocate funding to lower-level budgets that have not ensured sufficient funding for implementation; for localities facing difficulties in sourcing, they shall submit a written report to the Ministry of Finance to temporarily allocate funding to the locality; budget-using units may proactively use the 2016 budget allocation and retained revenue according to the regulations to promptly pay additional salaries and allowances to cadres, civil servants, public officials, armed forces, and other eligible groups as stipulated in this Circular. The temporarily allocated funding will be deducted when authorized bodies supplement funding for additional salaries and allowances.

4. Accounting and Settlement: The accounting and settlement of funding for implementing salaries and allowances for the specified groups as stipulated in this Circular shall be carried out in accordance with the provisions of the State Budget Law and current legal documents.

Article 6. Implementation Organization

1. Based on the specific situation of their own agencies and localities and the provisions of this Circular, heads of ministries, central agencies, and Chairmen of People's Committees of provinces and centrally-administered cities shall specify the time and reporting forms for units and subordinate budget levels in line with the regulations on compiling and reporting to the Ministry of Finance as stipulated in this Circular.

2. This Circular takes effect from August 15, 2016.

3. Circular No. 104/2013/TT-BTC dated August 2, 2013 of the Ministry of Finance guiding the determination of demand, source, and method of payment for implementing adjustments to the basic salary level according to Decree No. 66/2013/NĐ-CP dated June 27, 2013, and adjustments to allowances for retired village cadres according to Decree No. 73/2013/NĐ-CP dated July 15, 2013 of the Government shall cease to be effective from the date this Circular takes effect.

4. In cases where legal regulatory documents cited in this Circular are amended, supplemented, or replaced by other legal regulatory documents, the provisions of the amended, supplemented, or replacing documents shall apply.

During the implementation process, if there are any issues, ministries, central agencies, and localities shall submit reports to the Ministry of Finance for timely consideration and resolution./.