Circular No. 107/2006/TT-BTC guiding certain points on the organization and implementation of the state budget for the year 2007

CIRCULAR

Guidelines on certain aspects regarding the organization and implementation of the state budget estimate for 2007

state budget for the year 2007

Pursuant to Resolution No. 68/2006/QH11 dated October 31, 2006 of the National Assembly, tenth session, concerning the state budget estimate for 2007;

Pursuant to Resolution No. 69/2006/QH11 dated November 3, 2006 of the National Assembly, tenth session, concerning the allocation of the central state budget estimate for 2007;

Pursuant to Resolution No. 1051/2006/NQ-UBTVQH11 dated November 7, 2006 of the Standing Committee of the National Assembly concerning the ratio of division of revenue items between the central state budget and provincial budgets;

Pursuant to Decision No. 1506/2006/QĐ-TTg dated November 14, 2006 of the Prime Minister concerning the allocation of the state budget estimate for 2007;

The Ministry of Finance issues guidelines on certain aspects regarding the organization and implementation of the state budget estimate for 2007 as follows:

A. On the allocation and assignment of the state budget estimate for 2007:

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

1. Based on the revenue sources and expenditure responsibilities classified for local budgets according to the provisions of the State Budget Law, the People's Committees at provincial level shall submit to the People's Councils at the same level for decision the classification of revenue sources and expenditure responsibilities among local government budgets in accordance with the actual situation in their locality for the new period of stable budget.

2. The period of stable local budget is four years, from 2007 to 2010. During the period of stable local budget, the stable percentage rate of division of revenue sources between the central state budget and local budgets shall be implemented; the supplementary balance from the central state budget to local budgets (if any) shall also be stabilized. Based on the revenue sources enjoyed and the supplementary balance from the central state budget to local budgets (if any), the People's Committees at provincial level shall submit to the People's Councils at the same level for issuance of the standard for allocating expenditure from local budgets as the basis for determining the percentage rate of division of revenue sources between local government budgets and the supplementary balance from higher-level budgets to lower-level budgets; simultaneously, the stable percentage rate of division of revenue sources and supplementary balance (if any) from higher-level budgets to lower-level budgets for the new period of stable budget shall be implemented.

3. Implementing the mechanism of balancing land use fee revenue in the local budget balance for investment in economic and social infrastructure construction and using part of this revenue source to carry out land management planning work to complete the issuance of land use right certificates as soon as possible.

Management and accounting of revenues and expenditures from the land use fee revenue source from land auction sales according to Decision No. 216/2005/QĐ-TTg dated August 31, 2005 of the Prime Minister on the issuance of regulations on land auction sales for land allocation with land use fees or land leasing 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 implementation, and settling accounts into the state budget, specifically as follows:

- Based on the land use plan of the locality, the potential for land use fee revenue from land auctions, the need for compensation and support payments for land losses to people whose land has been expropriated, and the need for investment in infrastructure projects funded from the budget as stipulated by law, the People's Committee directs the financial department to consolidate these revenue and expenditure tasksinto the annual budget estimate for submission to the People's Council at the same level for decision.

- Based on the budget estimate for the year decided by the People's Council, the People's Committee assigns, and the financial department coordinates with relevant units to organize the collection and expenditure from the land use fee revenue source and record it into the state budget in accordance with the prescribed system.

In cases where organizations or individuals have advanced funds for compensation and support payments for land losses to people whose land has been expropriated for investment in infrastructure projects funded from the budget, and then conduct land auctions to collect land use fees to repay those who have advanced funds, full accounting of income and expenditure must be recorded into the state budget (record land use fee revenue corresponding to the amount advanced; record basic construction expenditure).

Regarding the redistribution of land use fee revenue between local government budgets:

- The portion of land use fee revenue corresponding to the amount advanced by organizations or individuals, which is assigned to the level responsible for the main investment, shall be recorded as state budget revenue and redistributed entirely to that level's budget and recorded as basic construction expenditure corresponding to the revenue.

- The remaining portion of land use fee revenue after repayment of the advanced amount shall be submitted to the state budget and redistributed to various levels of budget according to the regulations of the Provincial People's Council.

4. From 2007, implementing Resolution No. 68/2006/QH11 dated October 31, 2006 of the National Assembly, lottery revenue will not be included in the local budget revenue and expenditure balance but will be managed through the state budget; based on the guidance indicators of the Ministry of Finance regarding the budget estimate for revenue and expenditure from lottery revenue, the People's Committees at provincial level shall submit to the People's Councils at the same level for decision on the total revenue amount, but not exceeding the maximum level guided by the Ministry of Finance; and use the entire revenue for important welfare social projects in the locality (projects within the scope of local budget investment), focusing on education and healthcare projects; not to use this revenue for other purposes. Collection of taxes arising from lottery activities shall be carried out in accordance with tax laws and promptly and fully remitted into the state budget according to the Chapters, Classes, Clauses, Sections of the State Budget Manual. Allocation for investment projects from lottery revenue shall be carried out in accordance with regulations on the management of capital for basic construction, the State Treasury shall be responsible for supervising and paying investment capital according to regulations. When settling the local budget, there shall be a separate report on revenue and expenditure from lottery revenue.

II. Allocation and assignment of the budget estimate:

1. Allocation and assignment of state budget revenue estimates:

a) Ministries, central agencies, provincial People's Committees, and centrally governed cities shall implement the assignment of state budget revenue collection tasks for the year 2007 to subordinate units and lower-level authorities, ensuring that the target level exceeds the revenue estimate by at least 5%. The Prime Minister assigns, and the Ministry of Finance shall provide guidance.

b) The allocation and assignment of state budget revenue estimates must be based on an assessment of the results of state budget revenue collection in 2006 and the period from 2001 to 2005; taking into account tax laws, collection systems; 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 and trade fraud; prompt recovery of outstanding tax debts; implementation of tax exemption and reduction policies as stipulated by tax laws and resolutions of the National Assembly.

2. Allocation and assignment of state budget expenditure estimates:

a) Allocation and assignment of state budget expenditure estimates for development investment: Ministries, central agencies, and localities must allocate and assign development investment expenditure estimates in accordance with regulations on investment management and construction, while ensuring the following requirements:

- Ministries and central agencies:

+ Allocate development investment expenditure estimates according to the assigned industry and field structure, ensuring full repayment of advance budget funds that need to be recovered into the 2007 budget estimate, matching funds for projects using ODA; allocate funds to settle outstanding construction debts completely, avoiding new arrears, and not allocating funds for projects lacking necessary investment procedures as prescribed by law.

+ Allocate funds for ongoing projects that have been effective, especially important ones to complete according to schedule for early utilization.

+ After allocating funds for the aforementioned tasks, allocate funds for newly initiated projects that meet the conditions for funding under prescribed regulations.

- Provinces and centrally governed cities:

+ Allocate development investment expenditure estimates to settle outstanding construction debts of projects funded by the state budget according to prescribed regulations, avoiding new arrears, and not allocating funds for projects lacking necessary investment procedures as prescribed by law; repay all (principal and interest) of investment mobilization funds as stipulated in Clause 3, Article 8 of the State Budget Law due in 2007; repay loans for credit programs to reinforce irrigation channels, rural transportation infrastructure, village craft infrastructure, and fisheries infrastructure due in 2007; recover advance budget funds provided by the central government into the 2007 budget estimate...

+ Ensure allocation of matching funds for projects using ODA; allocate funds to implement disaster relief projects...

+ For important local programs, projects, and tasks, pay attention to the following points:

. Allocate sufficient local budget funds according to prescribed regulations for programs and tasks decided by the Government such as the Project to Upgrade District General Hospitals and Regional General Hospitals for the 2005-2008 period as per Decision No. 225/2005/QĐ-TTg dated September 15, 2005 of the Prime Minister and guidelines in Document No. 14049/BTC-NSNN dated November 7, 2005 of the Ministry of Finance... Prime Minister and guidance at For programs, projects, and tasks implemented from supplementary targeted funds from the central budget, they must be allocated according to the assigned objectives and budget estimates.

. + Allocate funds for ongoing projects that have been effective, especially important ones to complete according to schedule for early utilization.

+ Allocate and assign development investment expenditure estimates to subordinate agencies and lower-level authorities in the fields of education and training, science and technology, not lower than the levels assigned by the Prime Minister for these fields.

+ After allocating funds for the aforementioned tasks, allocate funds for newly initiated projects that meet the conditions for funding under prescribed regulations. 

b) Allocation and assignment of state budget expenditure estimates for socio-economic public services, national defense, security, administrative management, the Party, and mass organizations in 2007:

Ministries, central agencies, and localities when allocating and assigning state budget expenditure estimates for socio-economic public services, national defense, security, administrative management, the Party, and mass organizations in 2007 should pay attention to the following points:

- Allocation and assignment of new vehicle purchase estimates for state agencies, units, and organizations must comply with current regulations. In cases where authorized bodies permit purchases, this must be clearly stated in the budget estimate for the State Treasury to monitor and settle.

- Allocate funds to implement the plan for the development of e-commerce for the 2006-2010 period approved by the Prime Minister in Decision No. 222/2005/QĐ-TTg dated September 15, 2005 and guidelines from the Ministry of Trade.

- Ensure funds for administrative reform as per Decision No. 94/2006/QĐ-TTg dated April 27, 2006 of the Prime Minister approving the Administrative Reform Plan for the State Administration for the 2006-2010 period. - For ministries and central agencies when allocating and assigning state budget expenditure estimates for socio-economic public services, national defense, security, administrative management, the Party, and mass organizations (including salary reform funds as per Decree No. 204/2004/NĐ-CP dated December 14, 2004, and Decree No. 118/2005/NĐ-CP dated September 15, 2005 of the Government) to budget-using units, they must allocate accurately according to the total and detailed budget estimates assigned by the Prime Minister and guided by the Ministry of Finance across various spending areas; ensure funds for important tasks as prescribed by law and those decided by the Prime Minister; allocate budget estimates in accordance with prescribed standards and norms.

- Ensuring funding to implement administrative reform pursuant to Decision No. 94/2006/QĐ-TTg dated April 27, 2006 of the Prime Minister approving the State Administrative Reform Plan for the period 2006-2010.

- For ministries and central agencies when allocating and assigning the state budget for economic and social public services, national defense, security, administrative management, Party, and mass organizations (including salary reform funds under Decree No. 204/2004/NĐ-CP dated December 14, 2004, and Decree No. 118/2005/NĐ-CP dated September 15, 2005 of the Government) to budgetary units, they must allocate in accordance with the assigned expenditure budget approved by the Prime Minister; the Ministry of Finance shall guide both the total amount and detailed allocation according to each spending category; ensure funding for important tasks as prescribed by law and those decided by the Prime Minister; the budget allocation must comply with legal regulations on systems, standards, and quotas.

- For provinces and centrally governed cities allocating and assigning the state budget expenditure for economic and social public services, national defense, security, administrative management of the state, the Party, and mass organizations (including salary reform funds under Decree No. 204/2004/NĐ-CP dated December 14, 2004, Decree No. 118/2005/NĐ-CP dated September 15, 2005, and Decree No. 119/2005/NĐ-CP dated September 27, 2005 of the Government) to subordinate agencies and lower-level authorities, must implementin accordance with the provisions of the State Budget Law, paying attention to the following points:

+ Allocation and assignment of the state budget expenditure for the year 2007 to subordinate agencies and lower-level authorities in the fields of education and training, vocational training, science and technology shall not be lower than the budget expenditure assigned by the Prime Minister; for the fields of national defense; security; public health services; cultural information services; environmental services; subsidized prices, subsidized rates, and free provision of certain policy goods, the People's Committee at the provincial level shall base on the guidance indicators of the Ministry of Finance, policies and workload of each field, and the actual situation of the locality to submit to the People's Council at the same level for decision to suit the actual situation of the locality.

Specifically, the implementation of the budget expenditure for environmental protection services shall be carried out according to the Circular guiding the Ministry of Finance and the Ministry of Natural Resources and Environment.

+ The upper-level budget unit allocating and assigning the state budget expenditure to subordinate units must match the budget expenditure assigned by the People's Committee both in total amount and in detail by each expenditure category.

+ Ensure funding to implement various systems, policies, and tasks decided by the Government and the Prime Minister from the local budget balance and the central budget supplement with specific purposes (as detailed in Appendix No. 01 attached to this Circular), paying attention to the following points:

. From 2007, allocate funding for medical examination and treatment for the poor (according to the poverty standard stipulated in Decision No. 170/2005/QĐ-TTg dated May 27, 2005 of the Prime Minister on issuing the poverty standard applicable for the period 2006-2010) at an average cost of 80,000 VND/person/year ; funding for free medical examination and treatment for children under six years old according to the Law on Protection, Care, and Education of Children at an average cost of 108,000 VND/child/year.Ensure funding to implement scholarship systems for boarding and semi-boarding students from ethnic minorities as stipulated in Article 1 of Decision No. 82/2006/QĐ-TTg dated April 14, 2006 of the Prime Minister on adjusting scholarship levels for students and trainees from ethnic minority groups studying at boarding schools and preparatory universities at a rate of 280,000 VND/person/month.

. As for subsidy funding for price subsidies, rate subsidies, and free provision of certain policy goods from 2007 included in the local budget balance, it includes: support for breeding costs for original breeds according to Circular No. 04/2004/TTLT-BTC-NN&PTNT dated January 16, 2004; price subsidies for film projection in highland and mountainous areas; electricity price subsidies for island districts; price subsidies, rate subsidies, and free provision of certain policy goods as prescribed in Decree No. 20/1998/NĐ-CP dated March 31, 1998 of the Government and Decree No. 02/2002/NĐ-CP dated January 3, 2002 of the Government amending and supplementing some articles of Decree No. 20/1998/NĐ-CP dated March 31, 1998. Based on the budget allocation plan for 2007, the Provincial People's Committee shall submit to the People's Council at the same level for specific decisions on the use of subsidy funding for price subsidies, rate subsidies, and free provision of certain policy goods in 2007 to ensure efficiency, correct beneficiaries, and suitability with the actual situation of the locality; while reporting to the Ministry of Finance and the Committee for Ethnic Minorities for monitoring during the implementation process.

. Allocate funding to carry out tasks related to cooperation with localities in neighboring countries (China, Laos, Cambodia).

. Allocate funding to implement policies on health insurance and funeral expenses for those participating in the resistance war against America to save the country according to Decision No. 290/2005/QĐ-TTg dated November 8, 2005 of the Prime Minister and Joint Circular No. 191/2005/TTLT-BQP-BLĐTBXH-BTC dated December 17, 2005

. guiding this Decision. Allocate funding to implement funeral expenses and one-time allowances for veterans according to Decree No. 63/2005/NĐ-CP dated May 16, 2005 of the Government and Joint Circular No. 21/2005/TTLT-BYT-BTC dated July 27, 2005 of the Ministry of Health and the Ministry of Finance guiding the implementation of mandatory health insurance. Allocate funding to implement the Training and Capacity Building Program for Chairpersons of People's Councils and Chairpersons of People's Committees at Commune, Ward, and Town Levels according to Decision No. 31/2006/QĐ-TTg dated February 6, 2006 of the Prime Minister approving the Training and Capacity Building Program for Chairpersons of People's Councils and Chairpersons of People's Committees at Commune, Ward, and Town Levels for the period 2006-2010.

. Allocate funding to implement the Training and Capacity Building Program for Ethnic Minority Cadres and Civil Servants at Commune and Ward Levels according to Decision No. 34/2006/QĐ-TTg dated February 8, 2006 of the Prime Minister. The expenditure system for ethnic minority cadres and civil servants sent for training and capacity building shall be implemented according to Circular No. 79/2005/TT-BTC dated September 15, 2005 of the Ministry of Finance guiding the management and use of training and capacity building funds for state cadres and civil servants.

. Allocate funding to implement policies regarding the resettlement of residents in disaster-prone, extremely difficult, border, island, spontaneous migration, highly vulnerable, and very vulnerable forest protection zones, and strictly protected special-use forest zones according to Decision No. 193/2006/QĐ-TTg dated August 24, 2006 of the Prime Minister.

. Allocate funding to implement vocational training policies for boarding students from ethnic minority groups according to Decision No. 267/2005/QĐ-TTg dated October 31, 2005 of the Prime Minister and Joint Circular No. 65/2006/TTLT-BTC-BLĐTBXH dated July 12, 2006 of the Ministry of Finance and the Ministry of Labor, Invalids, and Social Affairs.

. c) Allocate and assign the state budget to implement national target programs, projects, and tasks in 2007:

. Allocate funding to implement vocational training policies for boarding ethnic minority students pursuant to Decision No. 267/2005/QĐ-TTg dated October 31, 2005 of the Prime Minister and Circular Joint No. 65/2006/TTLT-BTC-BLĐTBXH dated July 12, 2006 of the Ministry of Finance and the Ministry of Labor, Invalids, and Social Affairs.

c) Allocate and assign the budget to implement national target programs, projects, and tasks for 2007:

BASED ON THE BUDGET FOR IMPLEMENTING THE NATIONAL TARGET PROGRAM, IMPORTANT PROJECTS AND CERTAIN OTHER OBJECTIVES AND TASKS ASSIGNED BY THE PRIME MINISTER, MINISTRIES, CENTRAL AGENCIES, PROVINCE AND CITY PEOPLE'S COMMITTEES UNDER THE DIRECT CONTROL OF THE STATE CAPITAL SHALL DISTRIBUTE AND ASSIGN BUDGETS TO SUBORDINATE UNITS AND LOWER LEVEL AUTHORITIES TO ENSURE COMPLIANCE WITH THE GOALS SET BY AUTHORIZED AUTHORITIES. AT THE SAME TIME, THEY SHALL INTEGRATE NATIONAL TARGET PROGRAM FUNDS IN ACCORDANCE WITH REGULATIONS TO ENSURE EFFECTIVE IMPLEMENTATION; IN ADDITION TO TARGETED SUPPORT FUNDS FROM THE CENTRAL BUDGET, PROVINCES AND CITIES DIRECTLY UNDER THE STATE CAPITAL SHALL ACTIVELY ARRANGE LOCAL BUDGETS AND LEGAL FINANCIAL RESOURCES TO IMPLEMENT AND REPORT IN ACCORDANCE WITH CIRCULAR NO. 86/2006/TT-BTC DATED SEPTEMBER 18, 2006 ISSUED BY THE MINISTRY OF FINANCE ON GUIDELINES FOR MANAGING TARGETED SUPPLEMENTARY FUNDS FROM THE CENTRAL BUDGET FOR LOCAL BUDGETS.

d) REGARDING THE ALLOCATION OF THE BUDGET AND THE IMPLEMENTATION OF FINANCIAL MECHANISMS TO SECURE FUNDS FOR THE 2007 SALARY REFORM, FOLLOW CIRCULAR NO. 88/2006/TT-BTC DATED SEPTEMBER 29, 2006 ISSUED BY THE MINISTRY OF FINANCE, WITH SPECIAL ATTENTION TO THE FOLLOWING KEY CONTENTS:

- REGARDING THE FUNDS FOR IMPLEMENTING THE ADJUSTMENT OF THE MINIMUM WAGE AND ALLOWANCES:

+ MINISTRIES AND CENTRAL AGENCIES MUST DETERMINE AND ASSIGN THE TASK OF SAVING 10% OF REGULAR EXPENSES WHEN DISTRIBUTING AND ASSIGNING BUDGETS TO SUBORDINATE UNITS TO ENSURE THAT THE SAVINGS ARE NOT LESS THAN THE LEVEL GUIDED BY THE MINISTRY OF FINANCE FOR THE IMPLEMENTATION OF THE SALARY REFORM.

+ PROVINCE AND CITY PEOPLE'S COMMITTEES:

SHALL DISTRIBUTE AND ASSIGN BUDGETS TO LOCAL BUDGET LEVELS AND BUDGET USING UNITS, SPECIFY THE AMOUNT OF SAVINGS OF 10% OF REGULAR EXPENSES TO IMPLEMENT THE SALARY REFORM AND ENSURE THAT THE TOTAL SAVINGS OF 10% OF LOCAL BUDGET REGULAR EXPENSES IS NOT LESS THAN THE LEVEL GUIDED BY THE MINISTRY OF FINANCE.

LOCAL GOVERNMENT BUDGETS AT ALL LEVELS SHALL CONCENTRATE THE SOURCE OF 10% SAVINGS FROM ORGANIZATIONS AND UNITS UNDER THEIR OWN BUDGETS (EXCLUDING PUBLIC SERVICE UNITS OPERATING UNDER THE MECHANISM AS PROVIDED FOR IN DECREE NO. 43/2006/NĐ-CP DATED APRIL 25, 2006 OF THE GOVERNMENT AND STATE AGENCIES OPERATING UNDER THE AUTONOMOUS MECHANISM WITH RESPONSIBILITY FOR THE USE OF STAFFING AND ADMINISTRATIVE MANAGEMENT EXPENSES AS PROVIDED FOR IN DECREE NO. 130/2005/NĐ-CP DATED OCTOBER 17, 2005 OF THE GOVERNMENT) TO BALANCE BETWEEN UNITS WHEN DETERMINING THE FUNDS FOR IMPLEMENTING THE SALARY REFORM OF EACH UNIT UNDER THEIR OWN BUDGETS.

LOCALITIES SHALL USE THE FUNDS TO IMPLEMENT THE SALARY REFORM AND ADJUST THE ALLOWANCES FOR RETIRED COMMUNE OFFICIALS IN ACCORDANCE WITH GOVERNMENTS' DECREES NO. 93/2006/NĐ-CP DATED SEPTEMBER 7, 2006 AND NO. 94/2006/NĐ-CP DATED SEPTEMBER 7, 2006 ACCORDING TO CIRCULAR NO. 88/2006/TT-BTC DATED SEPTEMBER 29, 2006 OF THE MINISTRY OF FINANCE GUIDING THE DETERMINATION OF NEEDS, SOURCES, AND METHODS OF FUNDS FOR IMPLEMENTING THE ADJUSTMENT OF THE MINIMUM WAGE FOR OFFICIALS, CIVIL SERVANTS, CIVIL SERVANTS, MILITARY PERSONNEL, AND ADJUSTING ALLOWANCES FOR RETIRED COMMUNE OFFICIALS IN 2006 AND 2007.

- AFTER IMPLEMENTING THE ABOVE MEASURES TO SECURE FUNDS AND STILL FALL SHORT, THE CENTRAL BUDGET WILL PROVIDE SUPPORT TO ENSURE FUNDS FOR THE 2007 SALARY REFORM. IF THE BUDGET OF THE BUDGETARY UNITS AT ALL LEVELS AND LOCAL GOVERNMENT BUDGETS EXCEED THE REQUIREMENTS FOR THE SALARY REFORM AS PRESCRIBED, THEN THIS SURPLUS WILL BE TRANSFERRED TO THE NEXT YEAR TO SECURE FUNDS FOR THE SALARY REFORM AND NOT USED FOR OTHER PURPOSES.

đ) ALLOCATE BUDGET RESERVES AT ALL LEVELS OF LOCAL GOVERNMENT IN ACCORDANCE WITH THE LAW ON THE STATE BUDGET AND NOT LESS THAN THE LEVEL OF RESERVES ALLOCATED BY THE PRIME MINISTER TO ACTIVELY IMPLEMENT PREVENTION AND MITIGATION OF NATURAL DISASTERS, EPIDEMICS... IN ACCORDANCE WITH THE LAW ON THE STATE BUDGET. THE PRIME MINISTER HAS ALLOCATED TO ENSURE ENOUGH RESERVES FOR THE PREVENTION AND MITIGATION OF NATURAL DISASTERS, EPIDEMICS... IN ACCORDANCE WITH THE LAW ON THE STATE BUDGET.

e) DURING THE PROCESS OF DECIDING ON THE ALLOCATION OF THE BUDGET ESTIMATE FOR REVENUE AND EXPENDITURE, IF THE PEOPLE'S COUNCIL DECIDES THAT THE BUDGET REVENUE ESTIMATE FOR ITS OWN LEVEL IS HIGHER THAN THE LEVEL GRANTED BY SUPERIOR AUTHORITIES, THEN THE INCREASED EXPENDITURE BUDGET MUST BE USED TO IMPLEMENT THE SALARY REFORM (EXCEPT FOR INCREASED EXPENDITURE FROM LAND USE FEES); 50% OF THE INCREASED EXPENDITURE MUST BE USED FOR THE SALARY REFORM; THE REMAINING PART MUST BE USED TO INCREASE THE LOCAL BUDGET RESERVE, TO INCREASE THE RESERVE TO BE ACTIVE IN THE BUDGET MANAGEMENT PROCESS, TO IMPLEMENT IMPORTANT TASKS, REGULATIONS, POLICIES DECIDED BY AUTHORIZED AUTHORITIES, AND TO HANDLE PAYMENTS FOR THE VOLUME OF BASIC CONSTRUCTION WORK IN ACCORDANCE WITH REGULATIONS.

3. REGARDING THE TIMING OF THE ALLOCATION AND ASSIGNMENT OF BUDGET ESTIMATES:

BASED ON THE BUDGET ESTIMATE FOR REVENUE AND EXPENDITURE GRANTED BY THE AUTHORIZED AUTHORITIES, MINISTRIES, CENTRAL AGENCIES, AND PROVINCE AND CITY PEOPLE'S COMMITTEES AT ALL LEVELS SHALL SUBMIT TO THE SAME LEVEL PEOPLE'S COUNCIL TO DECIDE ON THE BUDGET ESTIMATE FOR NATIONAL REVENUE, THE BUDGET ESTIMATE FOR LOCAL EXPENDITURE, AND THE ALLOCATION OF THE BUDGET ESTIMATE FOR THEIR OWN LEVEL TO ENSURE THAT THE BUDGET ESTIMATE FOR REVENUE AND EXPENDITURE IN 2007 IS DISTRIBUTED TO EACH BUDGET USING UNIT BEFORE DECEMBER 31, 2006 AND TO ORGANIZE THE PUBLIC DISCLOSURE OF THE BUDGET ESTIMATE IN ACCORDANCE WITH REGULATIONS. IN WHICH, THE FOLLOWING POINTS SHOULD BE NOTED:

a) PROVINCE PEOPLE'S COMMITTEES SHALL BASED ON THE DECISION OF THE PRIME MINISTER ON ASSIGNING THE TASK OF BUDGET REVENUE AND EXPENDITURE, SUBMIT TO THE SAME LEVEL PEOPLE'S COUNCIL TO DECIDE ON THE BUDGET ESTIMATE FOR LOCAL REVENUE AND EXPENDITURE, THE ALLOCATION PLAN FOR THE PROVINCE BUDGET, AND THE LEVEL OF SUPPLEMENT FROM THE PROVINCE BUDGET TO THE BUDGET OF THE LOWER LEVEL BEFORE DECEMBER 10, 2006; AT THE SAME TIME, BASED ON THE RESOLUTION OF THE PROVINCE PEOPLE'S COUNCIL, IMPLEMENT THE ASSIGNMENT OF THE TASK OF BUDGET REVENUE AND EXPENDITURE TO EACH ORGANIZATION AND UNIT UNDER THE PROVINCE; THE TASK OF BUDGET REVENUE AND EXPENDITURE, THE PERCENTAGE (%) OF DIVISION OF REVENUE ITEMS TO THE BUDGET OF THE LOWER LEVEL, THE LEVEL OF SUPPLEMENT FROM THE PROVINCE BUDGET TO EACH DISTRICT, COUNTY, TOWN, AND CITY UNDER THE PROVINCE (IF ANY).

The provincial People's Committee is responsible for reporting the results of the allocation and assignment of the local state budget estimate to the Ministry of Finance no later than five days after the same-level People's Council decides on the state budget estimate in accordance with Article 40 of Decree No. 60/2003/NĐ-CP dated June 6, 2003, 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. Report the level of capital mobilization for the year 2007 in accordance with Clause 3, Article 8 of the State Budget Law, and the outstanding debt of capital mobilization of the local state budget as of December 31, 2006, to the Ministry of Finance before January 30, 2007. Report the balance of the Financial Reserve Fund according to Point 19.3, Section 19, Part IV of Circular No. 59/2003/TT-BTC dated June 23, 2003, of the Ministry of Finance.

For supplementary estimates with specific objectives, the provincial People's Committee reports the results of the allocation and assignment of the estimates to various levels and units using the budget in accordance with Circular No. 86/2006/TT-BTC dated September 18, 2006, of the Ministry of Finance on guiding the management of supplementary funds with specific objectives from the central budget to the local budget.

- The district People's Committee bases its decisions on the provincial People's Committee's decision regarding the assignment of revenue and expenditure tasks of the state budget, submits the draft revenue and expenditure budget and the plan for allocating the district state budget draft to the same-level People's Council for decision-making before December 20, 2006; at the same time, based on the Resolution of the district People's Council, assigns revenue and expenditure tasks to each agency and unit under the district, and the level of supplementation from the district state budget to each commune, ward, and town.

- The commune People's Committee bases its decisions on the district People's Committee's decision regarding the assignment of revenue and expenditure tasks of the state budget, submits the draft revenue and expenditure budget and the plan for allocating the commune state budget draft to the same-level People's Council for decision-making before December 31, 2006, and implements the allocation of the regular expenditure budget according to the types listed in the State Budget Manual into four groups as guided by the Ministry of Finance in Document No. 7541/TC/NSNN dated July 8, 2004, and simultaneously sends a copy to the National Treasury Office where transactions are conducted as the basis for payment and expenditure control.

b) Based on the revenue and expenditure budget estimate for the year 2007 The Prime Minister, People's Committees, central and local state agencies, and first-level budget units implement the allocation and assignment of revenue and expenditure budgets to subordinate budget-using 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 above decree (according to Model Nos. 1a, 1b, and 1c attached to this circular), noting the following points:

- First-level budget units prepare detailed plans for allocating regular expenditures assigned to subordinate budget-using units down to the Type and Item of the State Budget Manual into four expenditure categories (without detailed quarterly allocation), and submit them to the same-level financial authority for review; in which:

+ For units funded by the central government: must allocate separately a savings source of 10% for salary reform and include it in the "personal payment" category.

+ For units funded by the local government: allocate the state budget without including 10% savings (except for public service organizations implementing financial mechanisms as stipulated in Decree No. 43/2006/NĐ-CP dated April 25, 2006, of the Government and state agencies implementing self-management and responsibility mechanisms for staffing and administrative management expenses as stipulated in Decree No. 130/2005/NĐ-CP dated October 17, 2005, of the Government). 

For state agencies implementing self-management and responsibility mechanisms for staffing and administrative management expenses as stipulated in Decree No. 130/2005/NĐ-CP dated October 17, 2005, of the Government, the detailed allocation and assignment of the budget should be divided into two parts: The part of the state budget allocated for implementing the self-management mechanism should be included in the "other expenditure items" category; the part of the state budget not allocated for self-management should be included in the four expenditure categories as currently prescribed.

For public service organizations implementing self-management and responsibility mechanisms for financial operations as stipulated in Decree No. 43/2006/NĐ-CP dated April 25, 2006, of the Government, the allocation and assignment of the state budget revenue and expenditure should be based on assigned tasks, classification of public service organizations, and the state budget funding plan for ensuring regular operations in the initial period approved by the competent authority (for public service organizations partially self-financing and those fully financed by the state budget). The state budget allocation for regular operations should be included in the "other expenditure items" category; the allocation for non-regular operations should be included in the four expenditure categories as currently prescribed.  During the stabilization period, the state budget allocation for regular operations should be included in the "other expenditure items" category; the allocation for non-regular operations should be included in the four expenditure categories as currently prescribed.

- Within seven working days from receiving the budget allocation plan, the financial authority shall issue a notification of the review results. If the financial authority agrees with the allocation plan, the head of the allocating agency or unit shall immediately assign the budget to subordinate budget-using units, and send copies to the financial authority, the same-level National Treasury Office (according to Models 2a, 2b, and 2c attached to this circular), and the National Treasury Office where transactions are conducted (through the budget-using unit for detailed units). If the financial authority requests adjustments, within three working days from receiving the financial authority's document, the allocating agency or unit shall accept and adjust the plan and resubmit it to the financial authority for agreement; if there is no agreement on the adjustment, report to the competent authority for consideration 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 at the beginning of the fiscal year, the budget estimate and the budget allocation plan have not been decided by the competent state agency, the financial agency and the State Treasury temporarily allocate funds for expenditure tasks to subordinate budget-using units in accordance with Article 45 of Decree No. 60/2003/NĐ-CP dated June 6, 2003 of the Government.

- In cases where after December 31, 2006, the first-level budgetary unit has not fully allocated the assigned budget, the financial agency shall compile a report to the competent authority to adjust and reduce the budget expenditure of the unit to transfer to other agencies or units or to supplement reserves in accordance with the Government's regulations., except for tasks that were not clearly identified as the implementing units at the time of allocation but the first-level budgetary unit must report and obtain approval from the same-level financial agency for delayed allocation, with the latest date being March 31, 2007; beyond this deadline, the financial agency shall compile a report to the competent authority to adjust and reduce the budget expenditure of the unit to transfer to other agencies or units or to supplement reserves in accordance with the Government's regulations. to other agencies or units or supplement reserves as prescribed by the Government.

- For amounts that have been temporarily advanced or allocated but need to be recovered, if the first-level budgetary unit does not allocate the budget for recovery when allocating or assigning the budget to budget-using units, to ensure the source of recovery for these advances or allocations, while waiting for the competent authority to adjust the allocation and assignment of the budget, the financial agency may retain the corresponding amount of funds and promptly notify the unit and the authority responsible for allocating the budget.

B. Management and operation of the state budget:

I. On the organization and management of state revenue collection:

1. The People's Committees at all levels, Tax Agencies, Customs Departments, and other responsible agencies:

- Organizing and implementing tax collection work from the beginning of the year, ensuring accurate, full, and timely collection according to the law.

- Organize and implement effectively the Law on Tax Administration and guiding documents of the Government and the Ministry of Finance to enhance the effectiveness of tax revenue management work;

- Continue to organize the implementation of tax exemptions for corporate income tax, resource tax, and business license tax at the fishing and salt production stages before processing; reduce corporate income tax equivalent to the training costs for enterprises accepting ethnic minority labor to provide training and vocational education for such workers according to the Government's regulations and the guidance of the Ministry of Finance.

2. Tax Agencies and Customs Departments shall strengthen monitoring, inspection, and control of tax declarations by organizations and individuals; promptly identify cases of incorrect or incomplete tax declarations to take corrective measures. At the same time, they shall thoroughly collect overdue taxes from organizations and individuals engaged in production and business activities that are recoverable; compile reports to the competent authority to handle irrecoverable overdue taxes. Vigorously inspect and audit to fully recover taxes fraudulently evaded into the state budget. Regularly monitor and evaluate the impact of Vietnam's accession to the World Trade Organization on the production and business activities of regions and enterprises within their jurisdiction to develop and issue timely effective management measures to ensure the completion and exceedment of state revenue targets.

3. Ministries, local People's Committees shall proactively monitor and grasp price, material, and goods conditions affecting production and business operations and budget revenues and expenditures of ministries and localities to guide budget management at each level to meet the requirements of economic and social tasks decided by the National Assembly.

4. Strengthen the management of public assets and land use from planning, issuing land use certificates, using, transferring land to ensure full and timely revenue collection in accordance with prescribed regulations, especially revenues from land auctioning.

II. On budget management and operation:

1. Organizing the operation of the state budget estimate:

Ministries, central agencies, localities, and budget-using units shall operate within the scope of the allocated budget estimates; financial agencies and the State Treasury shall organize budget operations within the approved budget estimates, strictly controlling expenditures in accordance with national standards, norms, and regulations.

a) For the central budget:

- In cases where revenue exceeds the estimate, the additional revenue shall be used to supplement sources for disaster prevention and disease control, address urgent and unexpected issues arising during the year, and reserve funds for salary policy reform and social security policies.

- Implement the bonus system for excess revenue in local budgets, with a bonus rate of 30% for the portion of central government revenue from shared revenue between the central and local budgets exceeding the estimate as assigned by the Prime Minister, but not exceeding the increase in central government revenue from shared revenue between the central and local budgets in 2007 compared to the actual performance in 2006 from shared revenue between the central and local budgets. 

For Hanoi City and Ho Chi Minh City, the bonus system for excess revenue shall be implemented in accordance with Decree No. 123/2004/NĐ-CP dated May 18, 2004, Decree No. 124/2004/NĐ-CP dated May 18, 2004 of the Government, and guiding documents.

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

- Ministries and central agencies allocated foreign currency expenditure indicators in the regular budget estimate of 500,000 USD or more annually may implement expenditures in the corresponding amount of Vietnamese dong; if during the year, the amount of Vietnamese dong (corresponding to the allocated foreign currency) exceeds the allocated amount due to exchange rate fluctuations, the state budget shall make up the difference. Ministries and central agencies with foreign currency expenditures under 500,000 USD annually allocated in Vietnamese dong shall purchase foreign currency proactively to implement and arrange within the allocated budget to handle exchange rate differences if they arise.

b) For local budgets:

- In the case where local budget revenue collected according to the分级制度 exceeds the budget estimate,the Prime Minister and the higher-level People's Committee shall allocate and utilize at least 50% (excluding land use fee revenue) to increase funding for salary reform; the remaining 50% shall be used to increase payments for outstanding construction projects, to supplement expenditures to accelerate the completion of important urgent projects; to increase budget reserves to prevent and mitigate natural disasters, epidemics, and to implement important urgent tasks arising unexpectedly.

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 the case where local budget revenue collected according to the分级制度 does not meet the budget estimate, the People's Committee shall develop a plan to adjust and reduce expenditures accordingly, focusing on cutting or postponing non-essential expenditures, and report to the Standing Committee of the same-level People's Council for consideration and decision in accordance with the provisions of the State Budget Law.

c) In the organization and implementation of the state budget; ministries, central agencies, and localities need to pay attention to the following issues:

- Direct relevant agencies and units to coordinate with financial agencies to proactively plan the allocation of funds from the beginning of the year for important projects and works according to regulations, especially for the construction and repair of embankments, water conservancy facilities, disaster prevention, disease control, flood aftermath recovery, relocation projects from dangerous landslide areas, etc., as decided by competent authorities...

- Use the allocated budget to fulfill assigned tasks. For provinces and centrally-administered cities, if there is a need for urgent expenditures outside the budget but cannot be postponed and the budget reserve is insufficient, they must rearrange expenditures within the allocated budget or use the Financial Reserve Fund to meet such urgent needs. The provincial People's Committee decides on the use of the provincial Financial Reserve Fund in accordance with Point d, Clause 3, Article 58 of Decree No. 60/2003/ND-CP dated June 6, 2003 of the Government detailing and guiding the implementation of the State Budget Law. Provincial budgets can temporarily borrow from the central Financial Reserve Fund if the provincial Financial Reserve Fund has been fully utilized. County and commune budgets can temporarily borrow from the provincial Financial Reserve Fund.

- Regularly organize inspections and evaluations of project progress; for projects and works that are not progressing as scheduled, timely decisions or reports to competent authorities for adjustment to transfer funds to projects with faster progress and potential for completion but inadequately funded.

- Direct relevant agencies and units to coordinate with financial agencies to regularly inspect the implementation of systems and policies at units and grassroots levels. In cases where levels and units misuse the budget contrary to regulations, particularly social policies such as poverty reduction..., timely measures should be taken to ensure that policies and systems are implemented correctly and effectively.

- Report on the implementation of the state budget estimate as prescribed.

- Study and proactively implement commitments according to Vietnam's accession timeline to the World Trade Organization, paying particular attention to reducing certain prohibited subsidies such as export subsidies.

2. On raising capital for basic construction investment:

Provinces and centrally-administered cities requiring capital for infrastructure construction investment guaranteed by the provincial budget within the five-year investment plan decided by the provincial People's Council may raise domestic capital, but the maximum debt level shall not exceed 30% of the annual domestic basic construction investment budget of the provincial government as stipulated by the State Budget Law and related guidance documents. For Hanoi and Ho Chi Minh City, capital raising shall be carried out in accordance with Decree No. 123/2004/ND-CP dated May 18, 2004 and Decree No. 124/2004/ND-CP dated May 18, 2004 of the Government.

3. On procedures for budget disbursement and payment:

Based on the allocated annual budget, budget users shall withdraw expenditure estimates according to established budget spending standards and rates, and the progress and volume of work completed; ensuring the principle:

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

- Items with seasonal or periodic nature such as basic construction investment, large purchases and repairs, and other non-recurring items shall be paid according to the progress and volume of work completed as stipulated.

- The National Treasury shall record all actual expenditures and expenses according to the provisions of the State Budget Account (Chapter, Type, Item, Sub-item). For advances made according to regulations, they may be recorded up to the Item or Sub-item level, but upon settlement, detailed records must be kept at the Sub-item level.

4. Practicing thrift, combating waste, and organizing financial and budget transparency:

- Ministries, central agencies, and localities shall organize and direct the full implementation of the Anti-Corruption Law and the Law on Thrift and Combating Waste. At the same time, promptly and thoroughly address any violations discovered through inspection, audit, and investigation; clarify the responsibility of each organization and individual, and implement accountability for the heads of budget-using units when losses, waste, or improper use of the budget occur due to mismanagement.

- Ministries, central agencies, and local authorities shall direct and fully implement the provisions of Decision No. 192/2004/QĐ-TTg dated November 16, 2004 of the Prime Minister on the Financial Disclosure Regulations for state budget levels, budgetary units, organizations supported by the state budget, construction investment projects using state budget funds, state-owned enterprises, funds sourced from the state budget, and funds sourced from contributions of the people, and Circulars guiding the implementation of financial disclosure issued by the Ministry of Finance, paying particular attention to: + State budgets at all levels shall implement the financial disclosure system as prescribed in Circular No. 03/2005/TT-BTC dated January 6, 2005 of the Ministry of Finance guiding the implementation of the Financial Disclosure Regulations for state budget levels and the reporting system on the implementation of financial disclosure, and Circular No. 54/2006/TT-BTC dated June 19, 2006 of the Ministry of Finance on guiding the Financial Disclosure Regulations for direct support from the state budget to individuals.

+ Budgetary units shall implement public disclosure as prescribed in Circular No. 21/2005/TT-BTC dated March 22, 2005 of the Ministry of Finance guiding the implementation of the Financial Disclosure Regulations for budgetary units and organizations supported by the state budget.

+ State-owned enterprises shall implement public disclosure as prescribed in Circular No. 29/2005/TT-BTC dated April 14, 2005 of the Ministry of Finance guiding the Financial Disclosure Regulations for state-owned enterprises.

+ Construction investment projects funded by the state budget shall implement public disclosure as prescribed in Circular No. 10/2005/TT-BTC dated February 2, 2005 of the Ministry of Finance guiding the implementation of the Financial Disclosure Regulations for the allocation, management, and use of construction investment capital from the state budget.

+ For funds sourced from the state budget and funds sourced from contributions of the people, they shall implement public disclosure according to the guidance provided in Circular No. 19/2005/TT-BTC dated March 11, 2005 of the Ministry of Finance on financial disclosure for funds sourced from the state budget and funds sourced from contributions of the people.

+ In order to implement Decision No. 192/2004/QĐ-TTg dated November 16, 2004 of the Prime Minister in 2007, state budgets at all levels and budgetary units must implement the reporting system on the implementation of financial disclosure at the local level and submit reports to competent authorities for consolidation and evaluation nationwide as prescribed. For Departments of Finance, it is requested to submit public disclosure reports to the Ministry of Finance immediately after completing the public disclosure of the local budget estimate for 2007 and the settlement of the local budget for 2005.

C. Implementation Organization:

This Circular takes effect fifteen days after its publication in the Official Gazette and applies to the 2007 fiscal year. Ministries, central agencies, People's Committees of provinces and centrally governed cities shall base this Circular to direct subordinate agencies and units and lower-level local authorities to organize its implementation. During the implementation process, if there are difficulties, they are requested to promptly reflect them to the Ministry of Finance for coordination in resolution.

During the implementation process, if there are difficulties, they are requested to promptly reflect them to the Ministry of Finance for coordination in resolution./. Tran Van Ta

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