Circular No. 115/2008/TT-BTC guiding certain points on the organization and implementation of the state budget estimate for 2009

CIRCULAR

GUIDELINES ON SOME POINTS REGARDING THE ORGANIZATION AND IMPLEMENTATION OF THE STATE BUDGET FOR 2009

Pursuant to the Resolutions of the National Assembly, Session XII, No. 21/2008/QH12 November 8, 2008 on the state budget for 2009 and No. 22/2008/QH12 November 10, 2008 on the allocation of the central state budget for 2009;
Pursuant to Decision No. 1676/QĐ-TTg November 19, 2008 of the Prime Minister on the assignment of the state budget for 2009;
The Ministry of Finance provides guidelines on some points regarding the organization and implementation of the state budget for 2009 as follows:

A. ALLOCATION AND ASSIGNMENT OF THE STATE BUDGET FOR 2009:

I. ALLOCATION OF REVENUE SOURCES AND EXPENDITURE RESPONSIBILITIES FOR LOCAL GOVERNMENT BUDGETS:

1. In 2009, it is a year within the period of stabilizing the state budget between the central government and local governments (2007-2010). Besides implementing the stable percentage ratio (%) of revenue distribution between the central state budget and local state budgets (except for the ratio of revenue distribution for Hanoi which is implemented according to Resolution No. 705/2008/UBTVQH12 dated November 19, 2008 of the Standing Committee of the National Assembly) and the supplementary balance from the central state budget to local state budgets at the level decided by the National Assembly and the Standing Committee of the National Assembly in 2007, the central state budget will supplement local state budgets to implement salary reform until 2008 with a minimum wage of 540,000 VND/month, as assigned by the Prime Minister to each province and centrally-administered city through Decision No. 1676/QĐ-TTg dated November 19, 2008.

2. The allocation of revenue sources and expenditure responsibilities between different levels of local government budgets, the percentage ratio (%) of revenue distribution among different levels of local budgets, and the supplementary balance from higher-level budgets to lower-level budgets, besides being implemented stably according to the People's Council Resolutions and People's Committee Decisions for the five-year budget period during the stabilization period; provincial budgets will supplement the balance to implement salary reform according to the resolutions of the Provincial People's Councils and decisions of the Provincial People's Committees.

3. Continue to implement the mechanism for balancing land use fee revenues in the local government budget for investment in economic and social infrastructure, and using part of these revenues to carry out cadastral surveying, establish a database of land ownership records, and issue land use right certificates. Localities continue to allocate funds to carry out cadastral surveying, establish a database of land ownership records, and issue land use right certificates in 2009, striving to complete the issuance of land use right certificates for the three main types of land—agricultural, forestry, and residential—by 2010.

4. Continue to implement Resolution No. 68/2006/QH11 dated October 31, 2006 of the National Assembly, lottery revenues shall not be included in the revenue and expenditure balance of the local government budget but managed through the state budget; based on the ability to collect lottery revenues in 2008 and the plan for economic growth in 2009, the People's Committees at provincial level shall submit to the People's Councils at the same level to decide the lottery revenue budget for 2009 in accordance with reality; at the same time, use this revenue to invest in important social welfare projects in the locality, focusing on educational and healthcare facilities.

II. ALLOCATION AND ASSIGNMENT OF THE STATE BUDGET:

1. Allocation and assignment of state budget revenue:

a) Ministries, central agencies, provincial and municipal people's committees shall implement the assignment of revenue collection tasks for 2009 to subordinate units and lower-level authorities to ensure that the target is higher than the state budget revenue assigned by the Prime Minister.

b) The allocation and assignment of state budget revenue must be based on the assessment of revenue collection results in 2008; according to tax laws, revenue systems; the economic growth rate of each sector and field, the development potential of specific businesses, organizations, and individual traders; requirements to implement measures against revenue loss and commercial fraud, to thoroughly recover overdue tax debts; and to implement tax exemption, reduction, and deferral policies as stipulated by the law on state budget revenue.

2. Allocation and assignment of state budget expenditures:

a) Allocation and assignment of capital investment expenditures:

Ministries, central agencies, and localities must allocate and assign capital investment expenditures in compliance with regulations on investment management and construction, while ensuring the following requirements:

- Ministries, central agencies:

+ Allocate and assign capital investment construction expenditures according to the allocated industry and field structure, ensuring full repayment of advance payments that need to be recovered into the 2009 budget as per the Prime Minister's budget assignment decision; allocate funds to settle outstanding construction debts for completed projects that have been put into use but lack sufficient funding.

+ Ensure corresponding funding for projects and programs funded by ODA in accordance with commitments; guarantee funding for investment preparation work.

+ Allocate funding progressively for ongoing projects and programs with high effectiveness and the potential to be completed and put into use in 2009 and early 2010, especially key and urgent projects.

+ After allocating funds for the above tasks, allocate funds for new projects that meet all required procedures and conditions under the prescribed system, focusing on concentrating funds and avoiding dispersion.

- Provinces and centrally-administered cities:

+ Allocate the assigned capital investment construction expenditures to settle outstanding construction debts of projects under the state budget investment scope according to the prescribed system, without generating new arrears and without allocating funds for projects that do not meet the required investment procedures; fully repay (both principal and interest) the investment mobilization loans as stipulated in Clause 3, Article 8 of the State Budget Law by their due dates in 2009; repay the preferential credit loans for the program of solidifying irrigation canals, rural roads, village industrial infrastructure, and aquaculture infrastructure by their due dates in 2009.

+ Arrange for the repayment of central budget funds previously advanced and to be recovered into the budget estimate for the year 2009 according to the Prime Minister's decision on allocating the budget estimate.

+ Ensure sufficient counterpart funding from local budgets for projects and programs supported partially by the central budget to achieve project and program objectives: The Project to Strengthen School and Classroom Facilities and Teachers' Housing Units, the Investment Construction, Renovation, and Upgrading Project for County General Hospitals and Regional Multi-County General Hospitals using Government Bond Funds and other support programs where the central budget only provides supportive funding, and localities must arrange sufficient funds to complete the projects and programs within the specified deadlines.

+ For important local programs and projects implemented from targeted supplementary funds from the central budget, they must be arranged in accordance with the assigned objectives and budget estimates.

+ Focus capital allocation on projects and works that are effective and have the potential to be completed and put into use in 2000 and early 2010.

+ Allocate and assign development expenditure budgets to subordinate agencies and units and lower-level authorities in the fields of education and vocational training, science and technology, which shall not be lower than the level assigned by the Prime Minister for these fields.

+ After arranging for the tasks mentioned above, allocate funds for new projects that meet the conditions for fund allocation as prescribed, focusing on concentrating capital and avoiding dispersion; prioritizing construction and development projects in agriculture, farmers, and rural areas.

+ In cases where there is a need to mobilize capital for constructing economic and social infrastructure projects funded by provincial budgets and included in the five-year plan (2006-2010) approved by the Provincial People's Council, it is permissible to mobilize domestic capital, ensuring that the maximum level of debt does not exceed 30% of the total domestic investment construction capital of the provincial budget in 2009 as stipulated by the State Budget Law and guiding documents. Specifically, for Hanoi City and Ho Chi Minh City, capital mobilization shall be carried out in accordance with 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.

Additionally, for localities requiring advance funding for infrastructure investment projects that generate revenue to repay the advance funding, approved by competent authorities to attract domestic and foreign economic organization investments, implementation shall follow Circular No. 49/2005/TT-BTC dated June 9, 2005, issued by the Ministry of Finance.

b) Allocate and assign the budget estimate for economic and social public services, national defense, security, administrative management expenses for 2009:

- Ministries, central agencies, and localities when allocating and assigning the budget estimate for economic and social public services, national defense, security, and administrative management expenses must ensure funding for important tasks as prescribed by law and those decided by the Prime Minister. At the same time, ensure strict, economical, and efficient budget spending requirements, contributing to achieving socio-economic development goals, ensuring adequate resources to implement social welfare policies, noting the following points:

+ Continue to allocate funds to implement the e-commerce development plan for the period 2006-2010 approved by the Prime Minister under Decision No. 222/2005/QĐ-TTg dated September 15, 2005, and guidelines from the Ministry of Industry and Trade (formerly the Ministry of Commerce).

+ Ensure funding for administrative reform as per Decision No. 94/2006/QĐ-TTg dated April 27, 2006, of the Prime Minister approving the State Administrative Reform Plan for 2006-2010.

+ Allocate funds to support the development of rural trades and crafts as per Decree No. 66/2006/NĐ-CP dated July 7, 2006, of the Government and guidelines in Circular No. 113/2006/TT-BTC dated December 28, 2006, issued by the Ministry of Finance.

+ Allocate funds to ensure the needs for information technology application activities as per Decree No. 64/2007/NĐ-CP dated April 10, 2007, of the Government.

+ Allocate funds to implement Decision No. 144/2006/QĐ-TTg dated June 20, 2006, of the Prime Minister regarding the application of quality management systems based on TCVN ISO 9001:2000 standards in state administrative agency operations.

+ Allocate funds to implement Directive No. 24/2008/CT-TTg dated August 8, 2008, of the Prime Minister on strengthening crime prevention and law enforcement related to environmental protection during integration periods.

+ Allocate funds for central and local planning work as per Circular No. 24/2008/TT-BTC dated March 14, 2008, issued by the Ministry of Finance.

+ Allocate funds for the operation of all levels of the Association for Promoting Education as per Directive No. 11-CT/TW dated April 13, 2007, of the Central Committee and document No. 9134/BTC-HCSN dated July 10, 2007, issued by the Ministry of Finance.

+ Allocate funds for HIV/AIDS, drug abuse, and prostitution prevention work as directed by the Prime Minister in Notification No. 193/TB-VPCP dated August 4, 2008, of the Government Office and guidelines from the Ministry of Finance.

- For ministries and central agencies when allocating and assigning the budget estimate for economic and social public services, national defense, security, and administrative management (including salary reform funds at a minimum of 540,000 VND/month), for budget-using units, they must ensure alignment with the budget estimates assigned by the Prime Minister, with detailed guidance provided by the Ministry of Finance according to overall levels and specific sectors; budget allocations must comply with regulations, standards, and quotas set by law.

Additionally, when allocating budgets to public service units, based on the budget estimates assigned by the Prime Minister, ministries and central agencies decide on appropriate funding levels for public service units to ensure effectiveness.

- For provinces and centrally governed cities allocating and assigning the state budget expenditure plan for economic and social public services, national defense, security, administrative management (including salary reform costs with a minimum of 540,000 VND/month) to subordinate agencies and lower-level authorities, they must comply strictly with the provisions of the State Budget Law, paying attention to the following points:

+ Allocation and assignment of the state budget expenditure plan for 2009 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 plan assigned by the Prime Minister. When allocating the budget expenditure plan for the field of education and training, ensure sufficient funds to fulfill the tasks of each educational level, particularly focusing on funding for the universalization of preschool education at age five. Fully implement preschool education development policies according to Decision No. 161/2002/QĐ-TTg dated November 15, 2002, and Decision No. 149/2006/QĐ-TTg dated June 23, 2006, of the Prime Minister approving the project "Development of Preschool Education from 2006 to 2015."

For environmental protection public service expenditures: The provincial People's Committee bases its allocation on the state budget expenditure plan assigned by the Minister of Finance, the policy system, the volume of tasks to be performed, and the actual conditions of the locality, submitting it to the same-level People's Council for decision. Among these, priority should be given to funding for medical waste disposal, school sanitation, landfill sites, purchasing equipment for waste collection, and addressing hotspots of environmental issues.

Based on the state budget expenditure plan assigned for 2009, provinces and centrally governed cities allocate funds to implement central policies and systems in effect up to the time of the state budget expenditure plan assignment for 2009. Particularly, implementing social welfare policies so that beneficiaries can receive support payments from the beginning of 2009, including:

(1) Funds to implement assistance policies for social welfare recipients according to Decree No. 67/2007/NĐ-CP dated April 13, 2007, of the Government.

(2) Funds to provide health examinations and treatments for social welfare beneficiaries as stipulated in Decision No. 117/2008/QĐ-TTg dated August 27, 2008, of the Prime Minister regarding adjustments to insurance premiums for social welfare beneficiaries; free health examinations and treatments for children under six years old according to the Law on Protection, Care, and Education of Children.

(3) Funds to implement Decision No. 82/2006/QĐ-TTg dated April 14, 2006, of the Prime Minister concerning adjustments to scholarships for ethnic minority students studying at boarding schools and preparatory universities.

(4) Funds to implement policies for children from poor households attending kindergarten and living in dormitories in border communes according to Decision No. 112/2007/QĐ-TTg dated July 20, 2007, of the Prime Minister.

(5) Funds to implement the project on developing the economy and society in border communes between Vietnam and Laos; Vietnam and Cambodia until 2010 according to Decision No. 160/2007/QĐ-TTg dated October 17, 2007, of the Prime Minister.

(6) Funds to implement the exemption of water resource fees according to Decree No. 115/2008/NĐ-CP dated November 14, 2008, of the Government amending and supplementing some articles of Decree No. 143/2003/NĐ-CP dated November 28, 2003, of the Government detailing the implementation of certain provisions of the Water Resources Utilization and Protection Law.

c) Allocation and assignment of the state budget expenditure plan for implementing national target programs, projects, and tasks in 2009:

Based on the state budget expenditure plan for implementing national target programs, important projects, and other tasks assigned by the Prime Minister, ministries, central agencies, and provincial People's Committees of centrally governed cities shall allocate and assign the budget expenditure plan to subordinate units and lower-level authorities to ensure compliance with the objectives and contents of each program and project assigned by the competent authority. Provinces and centrally governed cities shall integrate national target program funds within their jurisdictions according to prescribed regulations to achieve effective implementation; in addition to targeted financial support from the central budget, provinces and centrally governed cities shall proactively allocate local budgets and legitimate financial sources to implement these programs.

The Program for Economic and Social Development of Particularly Difficult Communes in Ethnic Minority and Mountainous Areas for the 2006-2010 period (Program 135 Phase II) is allocated according to the level prescribed in Decision No. 1445/QĐ-TTg dated October 25, 2007 of the Prime Minister.

As for the Education and Training Program, it is implemented pursuant to Decision No. 07/2008/QĐ-TTg dated January 10, 2008 of the Prime Minister approving the National Target Program on Education and Training until 2010; specifically, the Project to Enhance Vocational Training Capacity is implemented in accordance with Circular Joint No. 90/2008/TTLT-BTC-BLDTBXH dated October 16, 2008 of the Ministry of Finance and the Ministry of Labor, Invalids and Social Affairs guiding management and use of funds for the Project to Enhance Vocational Training Capacity under the National Target Program on Education and Training until 2010.

d) Funds allocated, capital loan and foreign aid budgets transferred must be detailed to each using unit and ensure consistency with the total amount assigned by the Prime Minister.

d) Continue to allocate the budget and implement financial mechanisms to create sources to implement salary and allowance systems in 2009 in accordance with resolutions of the National Assembly, decrees of the Government, and decisions of the Prime Minister, noting that:

- Ministries and central agencies when allocating and transferring the state budget to subordinate units; People's Committees of provinces and centrally-administered cities when allocating and transferring the state budget to lower-level budgets must determine and transfer a savings amount of 10% of regular expenditure (based on the increase in the regular expenditure budget for 2009 compared to the 2008 budget, excluding salary items and those with the nature of salary based on the minimum wage of 540,000 VND/month) ensuring not less than the level guided by the Ministry of Finance; local authorities at all levels when allocating and transferring the budget to subordinate units shall not include 10% of additional expenditure savings (excluding public service organizations implementing financial mechanisms as stipulated in Decree No. 43/2006/NĐ-CP dated April 25, 2006, Decree No. 115/2005/NĐ-CP dated September 5, 2005 of the Government and state agencies implementing self-management and self-responsibility mechanisms for staffing and administrative management costs as stipulated in Decree No. 130/2005/NĐ-CP dated October 17, 2005 of the Government) to implement the salary reform system in 2009.

- Ministries and central agencies guide subordinate units to reserve 40% of retained revenue according to the 2009 regime (except for the health sector which reserves 35%, after deducting drug, blood, transfusion fluid, chemical, replacement material, and consumable material costs) to implement the salary reform system in 2009.

- Localities must use 10% of regular expenditure savings (excluding salary and salary-like items) from the 2009 budget increase compared to the 2008 budget and any remaining surplus (if any) after ensuring funding needs for salary reform implementation according to Decree No. 93/2006/NĐ-CP dated September 7, 2006, Decree No. 94/2006/NĐ-CP dated September 7, 2006, Decree No. 166/2007/NĐ-CP dated November 16, 2007, and Decree No. 184/2007/NĐ-CP dated December 17, 2007 of the Government; adjusting monthly allowances for retired commune cadres according to Decree No. 101/2008/NĐ-CP dated September 12, 2008 of the Government in 2009, from the following sources:

+ 50% of increased local government revenue (excluding increases from land use fees) in the 2008 budget compared to the 2007 budget as assigned by the Prime Minister;

+ 50% of increased local government revenue (excluding increases from land use fees) in the 2009 budget compared to the 2008 budget as assigned by the Prime Minister;

+ 50% of increased local government revenue (excluding increases from land use fees) realized in 2008 compared to the 2008 budget as assigned by the Prime Minister. In cases where localities face difficulties, have low self-balancing ratios from local revenues, and small increases in 2008 revenue compared to the assigned 2008 budget, the Ministry of Finance will consider specifically to determine the amount of increased revenue to be included in the source for implementing salary reform in 2009; simultaneously, compile and report to the Prime Minister on the results of implementation.

+ 10% of regular expenditure savings (excluding salary and salary-like items) from the 2007 budget;

+ 10% of regular expenditure savings (excluding salary and salary-like items) from the 2008 budget increase compared to the 2007 budget;

+ 40% of retained revenue according to the 2009 regime (except for the health sector which reserves 35%, after deducting drug, blood, transfusion fluid, chemical, replacement material, and consumable material costs);

+ Sources to implement additional salaries; hardship allowances for civil servants, public officials, and armed forces personnel according to Decision No. 127/2008/QĐ-TTg dated September 15, 2008 of the Prime Minister; adjustment of monthly allowances for retired commune cadres according to Decree No. 101/2008/NĐ-CP dated September 12, 2008 of the Government in 2008 that were not used up and carried over;

+ Amounts already allocated from the central budget in the 2009 budget to ensure additional funding according to Decree No. 93/2006/NĐ-CP dated September 7, 2006, Decree No. 94/2006/NĐ-CP dated September 7, 2006, Decree No. 166/2007/NĐ-CP dated November 16, 2007, and Decree No. 184/2007/NĐ-CP dated December 17, 2007 of the Government.

- Ministries, central agencies, and People's Committees of provinces and centrally-administered cities, after implementing the above measures to create sources and still lack sufficient sources, the central budget will provide support to ensure the source for implementation.

e) Allocate contingency funds for local government levels in accordance with the Law on State Budget and not less than the contingency level assigned by the Prime Minister to proactively implement disaster prevention, mitigation, and response measures as stipulated in the Law on State Budget.

g) During the process of deciding on the budget revenue and expenditure allocation, in cases where the People's Council decides to allocate a higher budget revenue according to the prescribed regulations compared to the level allocated by the higher authority, then the additional budget expenditure allocation corresponding to such increase (excluding increases from land use fees) shall be made after reserving 50% for salary reform, with the remaining portion prioritized for implementing important tasks, systems, and policies decided by the competent authority, settling construction project debts according to the prescribed regulations, supplementing the local government reserve fund, and increasing reserves to ensure proactive management during the budget execution process.

h) The first-level budget unit shall prepare a detailed plan for allocating regular expenditures to subordinate budget units, specifying down to the Type, Clause, and code number of the National Target Program, Program 135, and the New Forest Plantation Project of 5 million hectares (if applicable) as issued under Decision No. 33/2008/QD-BTC dated June 2, 2008 of the Ministry of Finance; among which, specifically allocate the additional 10% savings (if any) as prescribed for salary reform implementation.

For state agencies implementing the self-management and self-responsibility mechanism regarding staffing and administrative management expenses according to Decree No. 130/2005/NĐ-CP dated October 17, 2005 of the Government, the allocation and detailed budget assignment shall be divided into two parts: the part of the state budget assigned to implement the self-management and self-responsibility system; the part of the state budget assigned without implementing the self-management and self-responsibility system.

For public service organizations implementing financial self-management and self-responsibility according to Decree No. 43/2006/NĐ-CP dated April 25, 2006 of the Government, the allocation and detailed budget assignment for state budget revenue and expenditure shall be based on the assigned tasks, classification of public service organizations, and the state budget funding plan ensuring regular operations in the initial year of the stabilization period approved by the competent authority (for organizations partially self-financing their operational costs and those fully financed by the state budget); the detailed budget shall be divided into two parts: the part of the state budget funding regular operations, and the part of the state budget funding non-regular activities.

For scientific and technological projects using the state budget according to Decree No. 115/2005/NĐ-CP dated September 5, 2005 of the Government, the allocation and detailed budget assignment shall be divided into three parts: the funds for implementing scientific and technological tasks, regular activity funds, and non-regular activity funds. When assigning the detailed budget for implementing scientific and technological tasks to budget-using units, ministries and central agencies shall assign it according to the project, the allocated quota, and the unallocated quota as stipulated in Circular Joint No. 93/2006/TTLT/BTC-KHCN dated October 4, 2006 of the Ministry of Finance and the Ministry of Science and Technology guiding the quota system for scientific and technological projects funded by the state budget.

3. Time for Allocation and Assignment of Budget:

Based on the budget revenue and expenditure figures assigned by the competent authority, ministries and central agencies (for the central budget) decide on the allocation and assignment of the state budget to each budget-using unit; People's Committees at all levels (for local budgets) submit to the same-level People's Councils for decisions on the state budget revenue and expenditure plans for the locality, the provincial budget allocation plan, and the amount of supplementary funding from the provincial budget to lower-level budgets before December 31, 2008, and organize the public disclosure of the state budget in accordance with regulations. Among these, note the following points:

a) Provincial People's Committees base their decisions on the Prime Minister's decision on the assignment of budget revenue and expenditure tasks, submit to the same-level People's Council for decisions on the local state budget revenue and expenditure plans, the provincial budget allocation plan, and the level of supplementary funding from the provincial budget to lower-level budgets before December 10, 2008; simultaneously, based on the Provincial People's Council Resolution, they assign budget revenue and expenditure tasks to each agency and unit directly under the province; the revenue and expenditure tasks, the percentage (%) distribution of revenue items to lower-level budgets, and the level of supplementary funding from the provincial budget to each district, county, town, and city directly under the province (if applicable).

Provincial People's Committees are responsible for reporting the results of the allocation and assignment of the local state budget to the Ministry of Finance within five days after the same-level People's Council decides on the state budget 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 of Section 5, Part III of Circular No. 59/2003/TT-BTC dated June 23, 2003 of the Ministry of Finance; report the capital mobilization level for 2008 according to Clause 3 of Article 8 of the State Budget Law, the local government debt balance as of December 31, 2008 to the Ministry of Finance before January 31, 2009; report revenues, expenditures, and the Financial Reserve Fund balance as stipulated in Point 19.3 of Section 19, Part IV of Circular No. 59/2003/TT-BTC dated June 23, 2003 of the Ministry of Finance.

- District People's Committees base their decisions on the Provincial People's Committee's decision on the assignment of budget revenue and expenditure tasks, submit to the same-level People's Council for decisions on the district state budget revenue and expenditure plans and the district budget allocation plan before December 20, 2008; simultaneously, based on the District People's Council Resolution, they assign budget revenue and expenditure tasks to each agency and unit directly under the district, and the level of supplementary funding from the district budget to each commune, ward, and town.

- The People's Committee of the commune shall base on the decision of the People's Committee of the district regarding the assignment of tasks for budget collection and expenditure to submit the draft budget revenue and expenditure and the budget allocation plan at the commune level before December 31, 2008, and implement the allocation of the regular budget expenditure according to each Type and Clause of the State Budget Item List issued pursuant to Decision No. 33/2008/QĐ-BTC dated June 2, 2008 of the Ministry of Finance, while sending a copy to the State Treasury where transactions take place as the basis for payment and expenditure control.

b) Based on the 2009 budget revenue and expenditure forecast assigned by the Prime Minister and the People's Committee, the first-level budget units of the central budget and local budgets shall allocate and assign the budget revenue and expenditure forecast to subordinate budget-using units in accordance with the detailed regulations and guidance provided in Decree No. 60/2003/NĐ-CP dated June 6, 2003 of the Government on the implementation of the Law on State Budgets, Circular No. 59/2003/TT-BTC dated June 23, 2003 of the Ministry of Finance guiding the implementation of Decree No. 60/2003/NĐ-CP dated June 6, 2003 of the Government, and additional guidance provided in this Circular (reporting to the financial authority using forms 1a, 1b, and 1c attached to this Circular). Specifically, for the allocation and assignment of the development expenditure budget forecast, it shall be carried out in accordance with Circular No. 27/2007/TT-BTC dated April 3, 2007 of the Ministry of Finance and Circular No. 130/2007/TT-BTC dated November 2, 2007 of the Ministry of Finance amending and supplementing certain points of Circular No. 27/2007/TT-BTC dated April 3, 2007 of the Ministry of Finance on the management and settlement of investment capital and public service capital with investment characteristics from state budget funds; noting the following points:

- Within seven working days from the date of receipt of the budget allocation plan proposal, the financial authority must issue a written notice of the audit result. If more than seven working days have passed without the financial authority providing feedback, it will be considered as agreement with the allocation plan submitted by the agency or unit. In case the financial authority agrees with the allocation plan, the head of the allocating agency or unit shall immediately assign the budget forecast to the subordinate budget-using units, simultaneously sending it to the financial authority, the State Treasury at the same level (using forms 2a, 2b, and 2c attached to this Circular), and the State Treasury where transactions take place (sending through the budget-using unit for detailed accounts). In case the financial authority requests adjustments, within three working days from receiving the financial authority’s document, the allocating agency or unit must adopt and adjust the plan and resubmit it to the financial authority for consensus; if there is no agreement on the adjustment content, report to the competent authority for review and decision in accordance with Point 1.5, Section 1, Part IV of Circular No. 59/2003/TT-BTC dated June 23, 2003 of the Ministry of Finance.

- In cases where the first-level budget unit has not completed the allocation of the assigned budget forecast by December 31, 2008 due to difficulties or obstacles, the unit must report to the financial authority at the same level for consideration and permission to extend the budget allocation period. For reasons attributable to the unit itself, the budget allocation period may be extended until January 31, 2009 at the latest; beyond this deadline, the financial authority will compile a report to the competent authority to reduce the budget expenditure forecast of the unit and reallocate it to other agencies or units, or supplement it into the contingency reserve as prescribed by the Government. For reasons beyond the unit's control, such as lack of approval from the competent authority regarding organizational structure, mechanisms for implementing tasks, etc., the first-level budget unit must estimate the completion time for the financial authority to extend the allocation period, but not later than March 31, 2009; beyond this deadline, the remaining unallocated budget forecast will be handled similarly to the above-mentioned subjective reasons.

- When allocating and assigning the budget forecast to budget-using units, the first-level budget unit must pay attention to allocating to repay advances and temporary allocations, and receivables as decided by the competent authority; in cases where the unit does not allocate the budget forecast for these recoverable amounts, the financial authority will notify the relevant agencies and units to reallocate, and simultaneously notify the State Treasury at the same level to temporarily withhold funding until the correct allocation is received.

- In cases where the budget-using unit has not been authorized to assign the budget forecast in January 2009, the financial authority and the State Treasury shall temporarily provide funds to cover the expenditure needs of subordinate budget-using units in accordance with Article 45 of Decree No. 60/2003/NĐ-CP dated June 6, 2003 of the Government. After January 31, 2009, the financial authority and the State Treasury will stop providing temporary funds to budget-using units (except in special cases requiring written approval from the same-level financial authority).

B. ORGANIZATION OF MANAGEMENT AND CONTROL OF THE STATE BUDGET:

I. ORGANIZATION OF MANAGEMENT OF STATE BUDGET REVENUE:

1. People's Committees at all levels, Tax Authorities, Customs Departments, and related agencies shall be responsible for:

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

- Implementing well the Law on Personal Income Tax, the Law on Corporate Income Tax, the Law on Value Added Tax, the Law on Special Consumption Tax, and the guiding documents of the Government and the Ministry of Finance.

- Implementing tax deferral and reduction measures with conditions and deadlines for businesses engaged in production and business activities that face significant difficulties due to the impact of the financial crisis, focusing on handling small and medium-sized enterprises, manufacturing and processing enterprises of agricultural, aquatic, and marine products, etc., in accordance with the provisions of the competent authority and consistent with commitments under the WTO.

- Continuing to collect fees and charges strictly in accordance with the law, localities strictly implementing Directive No. 24/2007/CT-TTg dated November 1, 2007 of the Prime Minister on strengthening the enforcement of laws on fees and charges, policies for mobilizing and utilizing people's contributions.

- Regarding the collection of environmental protection fees for mineral exploitation as stipulated in Decree No. 63/2008/NĐ-CP dated May 13, 2008 of the Government, implement accounting entries for budget revenues and expenditures in accordance with the prescribed regulations.

2. Tax authorities and Customs shall strengthen monitoring, inspection, and control over the declaration of goods' names, codes, tax rates, and tax declarations made by organizations and individuals; promptly identify cases of incorrect or incomplete tax declarations to take corrective measures; simultaneously, organize thorough collection of overdue taxes from organizations and individuals engaged in production and business activities that have the potential for recovery; compile and report to competent authorities for final resolution of overdue taxes that cannot be recovered. Vigorously conduct post-clearance audits to fully recover into the state budget all amounts of tax fraud.

3. Ministries, central agencies, and localities shall pay attention to directing management of organizational operations and land use from the planning stage, establishment of cadastral records, issuance of land use right certificates, transfer of land rights to ensure full and timely revenue collection according to prescribed regulations, particularly revenues from land auctioning to prevent loss and wastage of public assets. Vigorously reorganize and dispose of state-owned real estate in accordance with Decision No. 09/2007/QĐ-TTg dated January 19, 2007 and Decision No. 140/2008/QĐ-TTg dated October 21, 2008 of the Prime Minister.

II. MANAGEMENT AND OPERATIONS OF THE STATE BUDGET:

From 2009, implement the State Budget Management Information System (TABMIS); ministries, central agencies, and localities participating in TABMIS shall be responsible for guiding and organizing the implementation of regulations on state budget management and operations in accordance with Circular No. 107/2008/TT-BTC dated November 18, 2008 of the Ministry of Finance. Simultaneously, manage and operate the state budget in accordance with the following contents:

1. Organization of state budget operations:

Ministries, central agencies, localities, and budgetary units shall operate within their allocated budget estimates; financial authorities and the State Treasury shall organize budget operations within approved estimates, strictly controlling expenditures to ensure compliance with the purposes, standards, norms, and state regulations. In particular:

- Expenditures from loan and aid funds shall be disbursed and controlled according to the principle:

+ For budget expenditures from loan and aid funds in cash: Implement according to the assigned estimate and mechanism similar to domestic funds (except where agreements provide otherwise, they shall be implemented according to the agreement).

+ For budget expenditures from loan and aid funds under the method of recording receipts and payments in the state budget: Implement according to the actual disbursement progress of each project.

- Direct relevant agencies and units to coordinate with financial authorities to proactively plan funding allocation at the beginning of the year for important projects and works in accordance with prescribed regulations, especially construction and repair of dyke, irrigation, flood prevention, epidemic control, disaster relief, and relocation projects from dangerous landslide areas as decided by competent authorities...

- Implement advance funding for the next year's basic construction investment budget in accordance with the provisions of Decree No. 60/2003/NĐ-CP dated June 6, 2003 of the Government, specifically for national projects and basic construction works belonging to Group A, meeting the conditions stipulated in investment and construction management regulations, currently underway and requiring accelerated progress; additionally, advance funding for the next year's basic construction investment budget may only be considered for cases such as counterpart funds for ODA projects, urgent irrigation projects, and projects allocating compensation funds where the compensation plans and budgets have been approved.

- Regularly organize inspections and evaluations of project progress; for projects and works not progressing as planned, promptly decide or report to competent authorities to adjust and transfer funds to projects with faster progress and the potential to complete but insufficiently funded.

- Within the 2009 regular expenditure budget allocated to ministries and central agencies, the Ministry of Finance shall clearly inform the foreign currency expenditures so that units can proactively implement them. For equivalent funds of US$500,000 or more annually, the central budget shall ensure foreign currency expenditures according to the assigned budget; for amounts less than US$500,000 annually, ministries and central agencies must proactively purchase foreign currency to implement and arrange within the allocated budget to address any exchange rate differences if they arise.

- For provinces and centrally-administered cities, if there is a need for emergency expenditures outside the budget but cannot be delayed and the contingency fund is insufficient, they must rearrange expenditures within the allocated budget or use the Financial Reserve Fund to meet these emergency needs. The provincial People's Committee decides to use the provincial Financial Reserve Fund in accordance with Point d, Clause 3, Article 58 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.

During the implementation of the 2009 budget, in case of significant economic fluctuations both globally and domestically affecting the 2009 state budget balance already decided by the National Assembly and approved by the People's Councils, the Ministry of Finance shall report to the Government for submission to the Standing Committee of the National Assembly, and the provincial People's Committees shall report to the Standing Committee of the People's Councils at the same level for decision in accordance with the Law on State Budget.

- Direct relevant agencies and units to coordinate with financial authorities to regularly inspect the implementation of regulations and policies at units and grassroots levels. In cases where it is found that budget-using entities are not complying with regulations and policies, especially those related to social policies, poverty reduction, etc., timely measures must be taken to ensure that policies and regulations are correctly applied to the intended beneficiaries and are effective.

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

2. Implement disbursement and payment of funds, transfer to the following year:

a) For budget-using entities:

Based on the allocated annual budget estimate, budget-using entities shall withdraw expenditure budgets according to established budget spending standards and norms issued by competent state agencies, and in accordance with the progress and volume of tasks undertaken, ensuring the principle that:

- Personal payment items (salaries, salary supplements, social allowances, etc.) must be paid monthly at the level of entitlements for recipients of salaries and allowances from the state budget. Ministries, central agencies, provincial People's Committees, and municipal People's Committees under the Central Government shall direct and organize the payment of salaries through bank accounts for recipients; The State Treasury shall closely cooperate with the State Bank and service providers to strictly implement the payment of salaries through bank accounts for recipients of salaries from the state budget in accordance with Directive No. 20/2007/CT-TTg dated August 24, 2007 of the Prime Minister.

- Items with seasonal characteristics or only occurring at certain times, such as basic construction investment, major purchases and repairs, and other non-recurring items, shall be paid according to the progress and volume of work as stipulated by regulations.

b) Continue to withdraw budget estimates at the State Treasury for the following expenditures:

- Supplementary balance transfers from higher-level budgets to lower-level budgets: Based on supplementary balance transfers from higher-level budgets to lower-level budgets assigned by the competent authority and the requirements for implementing expenditures, lower-level financial authorities shall proactively withdraw budget estimates at the State Treasury of the same level each month to ensure their own budget balance; specifically, village-level budgets shall withdraw estimates at the State Treasury where transactions take place.

For supplementary balance transfers from the central budget to local budgets, the monthly withdrawal amount shall not exceed one-twelfth of the total annual supplementary balance; however, for the first quarter, based on requirements and tasks, the monthly withdrawal amount may be higher than the average, but the total withdrawal amount for the first quarter shall not exceed 30% of the annual budget.

In cases where local budgets have been advanced from the central budget, they need to be recovered within the supplementary balance transfers from the central budget to local budgets in 2009, the Ministry of Finance shall notify the State Treasury to deduct the recovery amount from the initial budget allocation given to the locality; the remaining budget shall be divided throughout the year for withdrawal. The advance amount for local budgets shall be recovered as follows:

+ For advances made via payment orders, the recovery process shall also be conducted via payment orders;

+ For advances made via budget withdrawals, the State Treasury where transactions occur shall adjust accounting entries from advances to actual central government expenditures and actual local government revenues from central government supplements.

In special cases requiring an accelerated withdrawal schedule, the People's Committee of the province must submit a written request to the Ministry of Finance for consideration and decision.

For supplementary balance transfers from higher-level budgets to lower-level budgets within localities, based on revenue capacity and task requirements, the People's Committee of the higher level shall specify the monthly withdrawal amounts for lower-level budgets to suit local conditions.

Based on the budget withdrawal form of the financial agency and the People's Committee of the commune (according to Form C2-09/NS attached); the State Treasury where transactions occur shall check the conditions: whether they are within the allocated budget, within the monthly withdrawal limit, and then record the expenditure from the higher-level budget and revenue from the lower-level budget according to the content of the supplementary item and the State Budget Schedule.

- Subsidies for newspapers and magazines allocated in the budgets of ministries and central agencies: Based on the budget estimates assigned by the competent authority and the progress of subsidized tasks, newspapers and magazines shall process budget withdrawals at the State Treasury to be paid according to the provisions of Circular No. 79/2003/TT-BTC dated August 13, 2003 of the Ministry of Finance on the management, disbursement, and payment of state budget items through the State Treasury. Specifically, the provision of funds for certain types of newspapers and magazines serving ethnic minority and mountainous areas and particularly difficult regions according to Decision No. 975/QĐ-TTg dated July 20, 2006 of the Prime Minister shall still be implemented via payment orders.

- Training costs for Lao and Cambodian students under aid funding: Based on the budget estimates assigned by the competent authority and the requirements of the work, entities tasked with training Lao and Cambodian students shall process budget withdrawals at the State Treasury to be paid according to the provisions of Circular No. 79/2003/TT-BTC dated August 13, 2003 of the Ministry of Finance.

- Domestic debt payments from the central budget: Based on the domestic debt payment budget estimates assigned by the competent authority and debt repayment commitments, the State Treasury shall draw from the budget account to pay creditors when due, and simultaneously record domestic debt payments.

Apart from expenditures carried out under the mechanisms mentioned above, other expenditures (such as foreign debt repayments, aid, defense, security, etc.) shall continue to be implemented according to current regulations.

c) Starting from the 2009 fiscal year, shift from payment orders to budget withdrawals at the State Treasury for targeted supplementary funds from higher-level budgets to lower-level budgets (including targeted funds for East Sea - Island programs and mobilization preparation funds), specifically:

- For additional targeted funds from the central budget allocated to the local budget assigned by the Prime Minister at the beginning of the year, the implementation shall be carried out as follows: based on the assigned budget estimate, the amount of funds temporarily advanced according to regulations and the progress of implementing programs and tasks (including both investment capital and recurrent capital) reported by the project owner (or the unit responsible for carrying out the task); referring to the monthly payment results sent by the State Treasury agency where transactions take place to the Department of Finance; the Department of Finance compiles the demand for withdrawing additional targeted funds from the central budget to the local budget (according to attached Model No. 3), accompanied by the budget withdrawal form (according to attached Model C2-09/NS) to send to the State Treasury agency where transactions take place to withdraw additional targeted funds from the central budget to the local budget. The maximum amount withdrawn equals the budget estimate assigned for the program and task already assigned by the Prime Minister. The Department of Finance is responsible for the level of proposed withdrawal of additional targeted funds from the central budget to the local budget to implement the programs and tasks assigned by the Prime Minister.

Payment and disbursement for project owners and beneficiaries of policies and systems (recurrent capital) from state budget sources shall be implemented in accordance with current regulations.

In cases where the local budget is advanced the supplementary targeted budget from the central budget for the following year (including both investment capital and recurrent capital), it must be recovered in the supplementary targeted budget from the central budget for the local budget in 2009, the Ministry of Finance will notify the State Treasury to deduct the amount to be recovered immediately in the annual budget, the remaining part shall be withdrawn from the budget at the State Treasury according to the above regulations. The amount advanced to the local budget shall be recovered as follows:

+ For advances made via payment orders, the recovery process shall also be conducted via payment orders;

+ For advances made via budget withdrawals, the State Treasury where transactions occur shall adjust accounting entries from advances to actual central government expenditures and actual local government revenues from central government supplements.

- For additional targeted funds from the central budget allocated to the local budget arising during the process of organizing the budget execution (including the advance of additional targeted funds from the central budget to the local budget) shall be carried out as follows:

+ Additional targeted funds from the central budget allocated to the local budget arising during the process of organizing the budget execution to carry out tasks related to preventing, combating, and mitigating the consequences of natural disasters, fires, epidemics, or urgent and important tasks: based on the decision of the competent authority, the Ministry of Finance will issue a notification to supplement outside the budget for the local budget. Based on the notification of the Ministry of Finance, the Department of Finance will withdraw the budget at the State Treasury where transactions take place.

+ Advance amount of additional targeted funds from the central budget allocated to the local budget: based on the decision of the competent authority, the Ministry of Finance will issue a notification for the Department of Finance to withdraw the budget advance at the State Treasury where transactions take place. The Department of Finance will prepare the budget withdrawal form for the advance of the next year's budget according to regulations.

At the end of the fiscal year, if the amount withdrawn from the budget for the local budget has not been fully utilized for payments related to expenditures from additional targeted funds from the central budget to the local budget, the provincial People's Committee is requested to report to the Ministry of Finance for consolidation and submission to the Prime Minister for specific consideration, except in cases where the source can be transferred to the next year according to the prescribed regulations.

- For additional targeted funds from the upper-level budget allocated to the lower-level budget at various levels of local government (including additional targeted funds outside the budget), based on revenue capacity and requirements for implementation of tasks, the upper-level People's Committee will stipulate the withdrawal of the budget of the lower-level budget to suit the actual situation locally.

- Based on the budget withdrawal paper of the financial agency (according to attached Model C2-09/NS), the People's Committee of the commune will check the conditions: included in the assigned budget estimate, progress of implementation, decision of the competent authority to supplement during the implementation of the budget; then record the expenditure of the upper-level budget, collection of the lower-level budget according to the content of the targeted supplementary expenditure and the State Budget Manual.

Monthly, no later than the 15th day of the following month, the State Treasury (for the central budget) and the Provincial and District State Treasuries (for the local budget) shall compile and report to the financial agencies at the same level on the results of withdrawing supplementary balancing budgets and targeted supplementary budgets from the upper-level budget to the lower-level budget in the previous month according to current regulations.

d) In cases where it is necessary to adjust the budget between subordinate budgetary units without changing the total amount and details according to each assigned expenditure area, the first-level budget unit issues a decision to adjust the budget between related budgetary units and sends it to the relevant State Treasuries. For budgetary units that need to reduce their budget, the State Treasury where transactions take place checks the budget balance before implementation, confirms the adjustment so that the unit reports to the first-level budget unit (fax copy) to inform other budgetary units that have been adjusted to increase their budget. For budgetary units that have their budget increased, the State Treasury where transactions take place checks and confirms the reduction of the budget of related budgetary units before increasing the budget for the unit. If there is no sufficient balance left for adjustment, the budgetary unit reports to the first-level budget unit to make adjustments again.

In cases where the first-level budget unit is assigned to supplement the budget to implement newly arisen tasks, if the decision to supplement the budget details the expenditure area and the executing unit, it does not need to prepare a distribution plan for review by the financial agency, but directly allocates the budget to the subordinate unit and notifies the relevant State Treasury to implement.

In the case of adjusting the budget from funds not operating under the self-management regime to those operating under the self-management regime, or from non-recurring funds to recurring funds, the unit must obtain the unified opinion of the financial authority to ensure that the allocation of funds for assigned tasks is properly implemented.

d) Regarding the handling of transferring the surplus of the state budget of 2009 to the following year:

The Ministries, central agencies, localities, and State Treasury shall review, handle, and transfer the surplus of the state budget of 2009 to the following year in accordance with the provisions of the Law on State Budget, guiding documents of the Law, and Circular No. 108/2008/TT-BTC dated November 18, 2008 of the Ministry of Finance, ensuring strict and accurate transfers from 2009 to the following year, promoting efficient use of funds by units, and minimizing transfers to the following year.

3. Practicing thrift, combating waste; preventing and combating corruption and implementing financial and state budget transparency:

- The Ministries, central agencies, and localities shall organize and direct the full implementation of the provisions of the Law on Prevention and Combating Corruption, and the Law on Thrift and Combating Waste. At the same time, they shall promptly and fully address any violations discovered through inspection, audit, and investigation work, 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, or improper use of the budget occur.

- The Ministries, central agencies, and localities shall direct and fully implement the provisions of Decision No. 192/2004/QĐ-TTg dated November 16, 2004 of the Prime Minister regarding the Regulation on Financial Transparency for all levels of the state budget, budgetary units, organizations supported by the state budget, basic construction investment projects funded by the state budget, state-owned enterprises, funds sourced from the state budget, and funds sourced from contributions of the people, as well as guiding circulars of the Ministry of Finance on transparency, paying particular attention to:

+ Financial authorities at all levels shall implement the system of state budget transparency in accordance with Circular No. 03/2005/TT-BTC dated January 6, 2005 of the Ministry of Finance guiding the implementation of the Regulation on Financial Transparency for all levels of the state budget and the reporting system on the implementation of financial transparency, and Circular No. 54/2006/TT-BTC dated June 19, 2006 of the Ministry of Finance on guiding the Regulation on Financial Transparency for direct support from the state budget to individuals and residents.

+ Units using the state budget shall implement public disclosure in accordance with Circular No. 21/2005/TT-BTC dated March 22, 2005 of the Ministry of Finance guiding the implementation of the Regulation on Financial Transparency for budgetary units and organizations supported by the state budget.

+ State-owned enterprises shall implement transparency in accordance with Circular No. 29/2005/TT-BTC dated April 14, 2005 of the Ministry of Finance guiding the Regulation on Financial Transparency for state-owned enterprises.

+ Agencies and units utilizing state budget capital shall implement transparency in accordance with Circular No. 10/2005/TT-BTC dated February 2, 2005 of the Ministry of Finance guiding the implementation of the Regulation on Financial Transparency for the allocation, management, and use of capital for basic construction projects funded by the state budget.

+ Agencies and units responsible for managing funds sourced from the state budget and funds sourced from contributions of the people shall implement transparency in accordance with Circular No. 19/2005/TT-BTC dated March 11, 2005 of the Ministry of Finance on financial transparency for funds sourced from the state budget and funds sourced from contributions of the people.

- Agencies, units, and organizations using state assets shall implement transparency in accordance with Decision No. 115/2008/QĐ-TTg dated August 27, 2008 of the Prime Minister on the transparency of management and use of state assets in state agencies, public service units, and organizations entrusted with the management and use of state assets.

- Simultaneously, to implement Decision No. 192/2004/QĐ-TTg dated November 16, 2004 of the Prime Minister, state budgets at all levels and units using the state budget must implement the reporting system on the implementation of the transparency regulation and submit to competent authorities for consolidation and monitoring nationwide according to the prescribed regulations. Ministries, central agencies, and localities (Provincial Departments of Finance) have the responsibility to send transparency reports to the Ministry of Finance immediately after completing the public disclosure of the 2009 state budget draft and the settlement of the 2007 state budget.

C. IMPLEMENTATION:

This Circular takes effect 15 days after its publication in the Official Gazette and applies to the 2009 state budget; Circular No. 86/2006/TT-BTC dated September 18, 2006 of the Ministry of Finance guiding the management of supplementary capital with specific purposes from the central government's budget for local budgets is hereby abolished. Ministries, central agencies, and People's Committees of provinces and centrally-administered cities shall base their directives to subordinate agencies and lower-level local governments on the provisions of this Circular to organize its implementation.

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