Decision No. 1179/1997/QD-TTg on certain policies and measures for managing the plan for economic and social development and state budget estimates for 1998.

 Pursuant to …;

On Certain Policies and Measures for Managing the Plan for Economic and Social Development and the State Budget Estimate for 1998

PRIME MINISTER

Pursuant to the Government Organization Law dated September 30, 1992;

Pursuant to Resolution No. 12/1997-QH10 adopted at the second session of the 10th National Assembly on December 12, 1997 regarding tasks for 1998;

At the proposal of the Minister of Planning and Investment and the Minister of Finance,

DECISION:

I. ON POLICIES AND MEASURES FOR MANAGING THE PLAN IN 1998

Article 1. Agricultural sector and rural economy:

1. Implement solutions to address difficulties, promote agricultural development, and build up rural areas, focusing initially on mitigating the aftermath of Typhoon No. 5, stabilizing people's lives, and quickly restoring aquaculture and fishing activities in areas affected by natural disasters.

2. Concentrate on developing specialized rice export zones, specialty rice, corn, rubber, coffee, cashew nuts, sugarcane, fruit trees... Organize the marketing of agricultural products for farmers. Provide incentives in land, capital, tax, and other support to rapidly develop processing industries linked with the production of raw materials from agriculture, forestry, and fisheries. Summarize and expand effective models of business operations in rural areas. Announce reasonable electricity prices for household consumption to farmers, aiming to narrow the price gap between urban and rural areas. Accelerate the allocation of land and issuance of certificates of land use rights to farmers. Encourage and create favorable conditions for household economies to develop, facilitating farmers' access to production loans.

3. Develop policies for management and protection, moving towards closing natural forests. Prepare well the conditions to direct the implementation of the project to plant five million hectares of new forest, creating opportunities for local residents to develop production, stabilize their lives, end shifting cultivation and deforestation for farming. For households that have settled in new locations through spontaneous migration, localities should implement specific measures to ensure they can engage in long-term business activities with peace of mind.

4. Issue regulations guiding the mobilization of community efforts to strictly manage contributions, publicly inspect financial revenues and expenditures in all communes.

Article 2. Industrial sector:

1. Focus on planning the development of each production industry and key products, especially those aimed at exports and processed products, to have reasonable and effective investment plans, accelerate the development of high-competitive products in domestic and international markets. Reasonably protect domestic production in line with Vietnam's accession process to AFTA, WTO, and other international economic organizations.

2. Strengthen deep investments in technological innovation and structural transformation for industrial enterprises with effective business operations, particularly in processing industries and export product manufacturing.

Article 3. Investment and Development Sector:

1. Implement measures to maximize domestic capital mobilization, attract more foreign capital (ODA, FDI) for development investment.

2. Study, amend, and supplement Decree No. 29/CP dated May 12, 1995 detailing the implementation of the Law on Encouraging Domestic Investment, in the direction of encouraging all forms of investment for all economic sectors, simplifying procedures for enjoying investment incentives.

3. Publish lists of projects aimed at attracting foreign direct investment, projects under the BOT model both domestically and internationally, significantly improve the investment environment, and provide maximum convenience for foreign investors and domestic investors from all economic sectors to implement these projects.

4. Publish planning and lists of ODA projects. Supplement and innovate the appraisal and tendering process to simplify procedures, align with international agreements we have signed, accelerate disbursement speed, ensure ODA projects are put into use on schedule and of high quality.

5. For projects funded by the state budget, the Ministers, Heads of government agencies, Chairmen of provincial and centrally-administered city People's Committees must rigorously review, rearrange, and reassess the overall effectiveness and urgency of each project, immediately address the issue of scattered and ineffective investment; concentrate investment in important projects to be completed and put into use in 1998. Minimize the commencement of new works under categories B and C projects. Category C funding must ensure over 70% for ongoing and newly commenced projects to be completed within the year. Postpone non-urgent projects; do not plan projects without the necessary procedures according to Government Decrees No. 42/CP dated July 16, 1996 and No. 92/CP dated August 23, 1997 on investment and construction management.

6. Allocate investment credit funds according to the state plan, prioritizing industries and products that quickly generate benefits, especially those oriented towards exports and replacing imports.

Article 4. Financial and Monetary Sector:

1. Continue to review and adjust tax policies in the direction of ensuring state budget revenue while creating conditions for businesses to accumulate capital for development, nurturing sources of income, taking into account international integration requirements.

2. The Ministry of Finance shall take the lead in studying and submitting to the Government the issuance of a system of incentives for efficient businesses that pay higher corporate income taxes in subsequent years, allowing a portion of the increased tax paid to be refunded for reinvestment. Establish stable and publicized tax rates for small producers and traders for six months or one year; expand the scope of special consumption taxes on certain goods not encouraged for consumption. Vigorously sell state-owned properties to increase budget revenue. Prepare well the conditions to implement the Value Added Tax Law and the Corporate Income Tax Law from January 1, 1999.

3. Implement a thorough policy of thrift in budget expenditures. Continue to supplement and refine mechanisms, policies, expenditure standards, and criteria to ensure rationality and suitability with the state budget's capacity for uniform application throughout the country. Implement the system of price verification and bidding when using state budget funds to purchase high-value equipment and materials or large quantities of such items, as well as equipment and assets in investment construction projects.

Minimize the use of state budget funds for constructing new office buildings, purchasing new small cars, and acquiring expensive equipment in administrative and public service agencies. Based on the results of asset and land inventory in administrative and public service areas and the equipment allocation system, adjust assets from surplus locations to deficient ones to use them effectively. By the first quarter of 1998, the Minister of Planning and Investment shall submit to the Prime Minister a list of new office construction projects to be initiated in 1998; the Minister of Finance shall submit to the Prime Minister the number and units authorized to purchase small cars in 1998. The construction costs for new office buildings and the purchase of small cars must be within the budget allocation for 1998.

For training and healthcare facilities under State-owned Corporations, the state budget will only support a portion (maximum not exceeding 45% compared to the level supported by the state budget in 1997), with the remaining amount allowed to be accounted for in production and business expenses; the specific level of support for each unit will be determined based on the production and business efficiency of the unit.

4. Allocate the 1998 budget expenditure for Ministries and central agencies at 90% of the central budget allocation plan approved by the Standing Committee of the National Assembly (excluding salary-related expenditures, debt repayment both domestically and internationally, aid payments, development investment, and regular expenditures from foreign loans and aid). Provincial People's Committees shall allocate the 1998 budget expenditure for subordinate units at 90% (excluding salary-related expenditures, debt repayment, development investment, and regular expenditures from foreign loans and aid) and allocate the lower-level budget at 100% according to the local budget expenditure allocation plan decided by the People's Council. Based on this principle, district People's Committees shall allocate to subordinate units at 90% and allocate the lower-level budget at 100% according to the budget expenditure allocation plan decided by the People's Council.

Continue implementing the mechanism of using retained revenue sources for local budgets (land use rights transfer revenue, proceeds from the sale of state-owned housing, lottery revenue, agricultural land use tax, forest resource tax, advertising revenue from television, etc.) to invest in building economic and social infrastructure, developing agriculture and rural areas, regenerating forest funds, developing housing funds, developing the television industry, etc., as implemented in 1997.

Continue implementing the mechanism of rewarding localities for exceeding budgeted revenues from import and export taxes and special consumption taxes according to the following principles:

- For import and export taxes and special consumption taxes on imported goods through land borders, reward the locality with 100% of the excess revenue.

- For the special consumption tax on domestically produced goods, imported goods, and import and export taxes through sea ports and airports, the Prime Minister will decide to allocate a portion based on a percentage of the excess revenue to reward the locality.

The excess revenue from import and export taxes and special consumption taxes on imported goods, which serves as the basis for rewards, is determined based on the difference between the allocated budget revenue and the actual revenue collected for goods actually exported and imported through border gates, sea ports, and airports within the locality's jurisdiction.

The rewards from the above excess revenue can only be used for the purpose of investing in the construction of economic and social infrastructure projects.

7. Based on the annual money supply plan for 1998, assign the Governor of the State Bank to closely monitor market developments to manage the money supply plan in accordance with monetary policy implementation, ensuring monetary stability and price levels.

- Implement policies to encourage domestic capital mobilization to meet the needs of the economy.

- Continue allocating a portion of short-term credit for medium and long-term investments and priority sectors, especially remote, mountainous, and border areas, and export-oriented production.

- Manage interest rates and exchange rates flexibly towards reducing lending rates, stabilizing exchange rates at necessary levels, ensuring incentives for exports, controlling imports, increasing international reserves, and narrowing imbalances in the balance of payments.

8. Urgently develop and issue guiding documents to implement the Law on the State Bank and the Law on Credit Organizations. Rectify the operations of the Commercial Banking System.

9. Closely monitor the financial crisis situation in the region and globally, apply comprehensive measures to prevent and address negative impacts on the economy and society of our country.

Article 5. The field of material and commodity circulation.

1. Regarding the management mechanism for import and export in 1998, the Prime Minister will issue a separate Decision.

2. Issue Decrees to guide the implementation of the Trade Law. Focus on directing the reduction of taxes and rationalizing tax levels in line with commitments within the AFTA framework.

3. The Ministry of Trade, together with relevant ministries, shall establish a management mechanism to ensure essential goods, particularly for mountainous regions, islands, and remote areas. Continue implementing subsidized transportation costs for essential goods supplied to mountainous regions and ethnic minorities in highland areas. Enhance the responsibility and role of state-owned trade and cooperative networks in rural and mountainous markets.

Article 6. Reform state enterprise management, encourage the development of enterprises belonging to other economic sectors:

1. For state-owned enterprises, promptly complete the classification, organization, and restructuring of production and business operations. Strengthen enterprises in which the State needs to maintain 100% capital or controlling shares. The remaining state-owned enterprises will be widely equitized. Implement strong and proactive measures to equitize 150 state-owned enterprises in 1998. Enterprises with small scale, prolonged losses, and unnecessary for State ownership shall be merged, sold, or publicly tendered for lease or contract operation (which may be assigned to a collective of employees for business operation), dissolved, or declared bankrupt according to the Enterprise Bankruptcy Law.

Arrange employment and properly address surplus labor in state-owned enterprises undergoing equitization, merger, or transfer of ownership...

Summarize the model of State Corporations; implement solutions to improve the financial situation of state-owned enterprises; settle overdue debts and capital occupation between enterprises; re-evaluate enterprise assets. Issue regulations on cost control and pricing for monopoly enterprises and state corporations; publicize the financial results of state-owned enterprises.

2. Encourage the vigorous development of enterprises under various economic sectors; study additional types of companies; expand the eligible entities to establish and invest in companies; expedite business registration and licensing procedures; simplify formalities.

3. Uniformly regulate inspection and supervision mechanisms of state agencies over enterprises and monitoring during circulation; prevent arbitrary actions causing harassment and inconvenience.

Article 7. Science and technology sector:

1. Enact economic policies and mechanisms to strongly encourage innovation and enhance technological levels. Promptly complete the draft Science and Technology Law for submission to the National Assembly.

2. Organize, select, and ensure conditions for effectively implementing applied technology research projects aimed at directly improving product quality and increasing competitiveness in domestic and international markets.

3. Strengthen environmental inspection work; increase the capacity of environmental monitoring stations; invest in resolving heavily polluted areas; establish an environmental fund; strengthen environmental communication and education among the populace.

Article 8. Cultural, educational, training, and social issues sector.

1. Promptly complete the Education Law project for submission to the National Assembly for approval. Expand private and semi-public forms in primary and secondary education, including elementary school. Diversify higher education training methods; encourage foreign universities to establish in Vietnam.

2. Implement scholarship policies to encourage excellent students and provide social assistance to poor students at all levels; reform tuition fee policies towards regional-based fee frameworks; collected fees are allocated to the state budget for educational balance.

3. Rectify and improve the health insurance mechanism towards expanding participation, unified management, and harmonization nationwide.

4. Continue implementing social policies and promoting socialization of certain social services; create legal grounds for organizations and individuals to invest in sports facilities and activities; convert management mechanisms of sports clubs and stadiums...

5. Enact comprehensive systems and policies to encourage the vigorous implementation of socialization of educational, healthcare, cultural, and social activities mentioned above (priority given when granting land use rights, preferential credit and tax benefits, ensuring social insurance and legitimate rights for state officials transferring to private and non-state sectors).

Article 9. Regarding national programs:

1. The Minister managing the national program is responsible before the Prime Minister for the implementation of the national program's objectives. The Ministry of Planning and Investment assists the Government in managing all national programs. The Chairman of provincial People's Committees directly under the Central Government is responsible for managing and organizing the implementation of program goals and tasks within their jurisdiction.

2. The ministry managing the national program determines the tasks and objectives of the national program, develops a comprehensive implementation plan, calculates resources, solutions, guides the construction of program projects, prepares funding allocation plans for each ministry, central agency, and localities to submit to the Ministry of Planning and Investment and the Ministry of Finance; the Ministry of Planning and Investment leads together with the Ministry of Finance to compile and report to the Prime Minister for decision-making. Ministers, heads of central agencies, Chairmen of provincial People's Committees directly under the Central Government organize the approval of national program projects based on the approved budget; develop implementation plans to submit to the program management ministry, the Ministry of Planning and Investment, and the Ministry of Finance for compilation and reporting to the Prime Minister.

3. For existing national programs not included in the national program list from 1998 onwards, they will continue to operate under the financial mechanism stipulated in Decision No. 531/TTg dated August 8, 1996, of the Prime Minister. At the same time, ministries, sectors, and localities managing the programs urgently prepare conditions to transition these programs into regular tasks of ministries, sectors, and localities from 1999.

II. REGARDING THE TARGET SYSTEM OF PLANNING.

Article 10. The Prime Minister assigns the following 91 targets to ministries, ministerial-level agencies, government agencies, and State Corporation 91:

1. Import and export: Total value of exports and imports (assigned to the Ministry of Trade).

2. Major goods, materials, equipment for national reserves: rice, equipment, materials, specialized items for defense, security, and some industries.

3. Construction investment:

- Total concentrated construction investment capital (domestic and foreign funds);

Of which: actual project investment, structured by several key industries and fields;

||| - List and investment capital of projects belonging to Group A; including domestic capital and foreign capital.

||| 4. Finance:

||| - Total budget expenditure and expenditures by sector, including expenditure for national programs.

||| - Total state budget revenue: assigned to the Ministry of Finance.

||| - Total tax revenue from export and import, special consumption tax on imported goods (excluding additional charges and fees): assigned to the General Department of Customs.

Article 11. ||| The Prime Minister assigns the following targets to provinces and centrally governed cities:

||| 1. Basic construction investment:

||| - Total centralized basic construction investment capital, including domestic capital and foreign capital.

||| - List and investment capital of projects belonging to Group A, including domestic capital and foreign capital.

||| 2. Finance:

||| - Total state budget revenue in the locality and detailed revenue items: special consumption tax on domestic goods, export and import taxes, special consumption tax on imported goods, including goods through land borders.

||| - Total local budget expenditure.

||| - Additional funding from the central budget (if any).

Article 12. ||| The Prime Minister delegates to the Minister of Planning and Investment:

||| 1. Guide ministries, central agencies, localities, and State-owned corporations 91 on planning targets regarding production, import and export, circulation of materials and goods, education and training, science and technology, basic investigation tasks, culture and society to ensure major balances in the national economy according to the planned orientation.

||| 2. Guide objectives, tasks, and capital for national programs for ministries, sectors, and localities.

||| 3. Assign to ministries and State-owned corporations 91 the list and investment capital for projects in Group B, including domestic capital and foreign capital; capital for design and planning work, investment preparation capital, and project implementation preparation capital.

||| 4. Assign to localities: capital for design and planning work, investment preparation capital, project implementation preparation capital, investment capital structure for implementing projects in certain important industries and fields, list of projects and investment capital for Group B; notify the list of projects in Groups A and B of the central government within their territory.

||| 5. For credit investment capital according to the State plan, the Ministry of Planning and Investment assigns the list and capital amount for each project in Group A, notifies the list of projects in Group B, and assigns the total capital of projects in Groups B and C to ministries, sectors, and localities; (after the Prime Minister has decided on the total capital amount, target groups, interest rates, and lending mechanisms).

Article 13. ||| The Prime Minister delegates to the Minister of Finance:

||| 1. Assign the state budget revenue and expenditure budget to central agencies outside ministries, which have not been directly assigned by the Prime Minister.

||| 2. Guide ministries, sectors, localities, and State-owned corporations 91 on revenue and expenditure targets for the state budget, including the expenditure budget for national programs, to ensure the implementation of the state budget approved by the National Assembly and assigned by the Prime Minister.

||| III. REGARDING GUIDANCE AND MANAGEMENT OF PLAN IMPLEMENTATION.

Article 14. ||| Based on the policies and measures for economic and social plan management and the state budget revenue and expenditure budget already approved by the Prime Minister, ministries, sectors, provinces, and centrally governed cities must develop specific plans for their ministries, sectors, and localities to manage and implement them. At the same time, they must concretize and guide issues under their responsibility to ensure uniform implementation nationwide. From the beginning of the year, ministries and sectors establish research programs to formulate and issue mechanisms and policies within their scope of responsibility to be quickly implemented in 1998.

Article 15. Implement monthly reporting meetings on the implementation of the plan among some agencies, chaired by the Minister of Planning and Investment, to promptly propose solutions to address emerging issues to ensure successful completion of economic and social development tasks as per the National Assembly's Resolution. Effectively coordinate work among ministries and sectors in specific areas under their assigned responsibilities under the unified guidance of the Government.

Article 16. Ministries, sectors, and localities must implement a monthly reporting system on the implementation of the plan in key areas: production, basic construction, budget revenue and expenditure, monetary policy, import and export, circulation of materials and goods, inflation... sent to the Office of the Government, the Ministry of Planning and Investment, the Ministry of Finance, and the General Statistics Office no later than the 22nd of each month. For State-owned corporations 91, in addition to sending reports to the aforementioned agencies, they must also send reports to the ministry managing their sector. For quarterly reports, a thorough evaluation of achievements and shortcomings is required, with deeper analysis of causes and recommendations for plan management measures. Based on the reports from ministries, sectors, and localities, the Ministry of Planning and Investment will compile and report to the Government on the 25th of each month.

IV. IMPLEMENTATION PROVISIONS.

Article 17. Ministers, heads of ministerial-level agencies, heads of government-affiliated agencies, Chairmen of People's Councils and Chairmen of provincial and municipal People's Committees, Chairmen of Boards of Directors and General Managers of State-owned corporations 91, are responsible for implementing this Decision./.