Decree No. 123/2004/ND-CP on certain special financial and budget mechanisms for Hanoi Capital

DECREE

Provisions on Certain Special Financial Mechanisms for the Capital City of Hanoi

___________________________

THE GOVERNMENT

Pursuant to the Law on Organization of the Government dated December 25, 2001;

WHEREAS, the Law on the State Budget dated December 16, 2002;

Pursuant to the Ordinance on the Capital City dated December 28, 2000, of the Standing Committee of the National Assembly;

Pursuant to Circular No. 212 NQ/UBTVQH11 dated March 22, 2004, of the Standing Committee of the National Assembly;

At the proposal of the Minister of Finance,

DECREE:

PART I

ON THE MANAGEMENT OF THE BUDGET OF THE CAPITAL CITY OF HANOI

Article 1.

1. The sources of revenue and expenditure tasks of the capital city budget of Hanoi shall be classified according to the provisions of the State Budget Law. The People's Committee of the City shall submit to the People's Council of the City for decision on the specific classification of revenue sources and expenditure tasks between budgets at various levels within the city (city, district, county, ward, commune) in accordance with the State Budget Law and in line with actual conditions, economic and social development requirements, national defense, security, and social order and safety of the city. For the commune and town budgets, they shall be implemented in accordance with point b, Clause 1, Article 34 of the State Budget Law.

The State prioritizes investment from the budget and other financial resources to develop the economy and society of the city so that it can fulfill its role as the central political, economic, and social hub of the region and the country.

2. Annually, based on the state budget estimate assigned by the Prime Minister and the guidance of the Ministry of Finance, the People's Committee of Hanoi City shall submit to the People's Council of the City for decision: the estimate of revenue and expenditure of the city budget; the allocation of revenue and expenditure tasks to each agency and unit under the city budget; the amount of supplementary funding from the city budget to lower-level budgets in line with the city's economic and social development requirements and ensuring compliance with the overall direction of the state budget.

3. To effectively utilize land funds managed by the city, the People's Committee of the City may temporarily allocate from the city budget or from funds raised according to prescribed regulations for infrastructure construction projects under the investment task of the budget to organize land use rights auctions. After completing the auction of land use rights, the funds will be recovered and returned to the budget or the source of raised funds.

Article 2. The percentage ratio (%) for dividing revenues shared between the central budget and the city budget shall be decided by the Government and submitted to the Standing Committee of the National Assembly; the duration of stability for the percentage ratio (%) for division shall be decided by the Government and submitted to the National Assembly.

Article 3.

1. Annually, in cases where there is an increase in central government budget revenue compared to the estimate assigned by the Prime Minister from revenues divided between the central budget and the city budget as stipulated in Clause 2, Article 30 of the State Budget Law, the city budget shall be rewarded with 30% of this increased revenue, but not exceeding the increase in revenue compared to the previous year's actual performance.

2. The central budget shall supplement targeted funding to the city corresponding to the entire increase in central government budget revenue compared to the estimate assigned by the Prime Minister for revenues divided between the central budget and the city budget (after implementing the reward for excess revenue as stipulated in Clause 1 of this Article) and the level corresponding to the entire increase in revenue compared to the estimate assigned by the Prime Minister for central government budget revenues that enjoy 100%, excluding: value-added tax on imported goods; revenues not delegated to the city for collection, not generated within the territory of Hanoi City but only recorded and paid in Hanoi City; revenues recorded and recorded and retained by units for management through the state budget according to the law.

3. Based on the reward amount and the targeted supplementary funding from the increased revenue as stipulated in Clauses 1 and 2 of this Article, the People's Committee of the City shall submit to the People's Council of the City for decision: investment in constructing infrastructure projects; repayment of raised funds; implementation of important tasks to promote economic and social development, ensure national defense, security, social order, and safety of the capital, and rewarding lower-level budgets.

Chapter II

ON RAISING FUNDS FOR

INVESTMENT AND DEVELOPMENT OF THE CAPITAL CITY OF HANOI

Article 4.

1. The Government prioritizes allocating official development assistance (ODA) capital for the capital city to invest in programs and projects to build urban technical infrastructure systems, environment, and public welfare.

2. The allocation of capital for projects using ODA funds shall be carried out according to the principle:

a) For ODA projects funded by the budget:

- For projects and works where the ministry or central agency is the project owner, the allocation of capital (including counterpart funds) shall be guaranteed by the central budget.

- For projects and works where the People's Committee of the City is the project owner, the city shall be responsible for allocating from the city budget to ensure the counterpart funds for the project and work.

b) For ODA loans repaid to the city for relending, priority shall be given to allocating capital for investment projects with the ability to recover capital, and production projects for exportable goods with high competitiveness in the international market.

3. The specific allocation of ODA capital and the implementation of programs and projects for Hanoi City shall be balanced in the annual state budget estimate by the Government and submitted to the National Assembly for decision.

Article 5.

1. Hanoi City may raise domestic investment capital through local government bond issuance and other forms of raising funds as prescribed by law; the city budget shall be responsible for paying principal, interest, and related costs.

2. Hanoi City may raise foreign loans for investment in infrastructure development under the city budget's expenditure tasks according to the principle: the People's Committee of the City shall develop plans, seek loan sources, and obtain opinions from the Ministries of Finance, Planning and Investment, and the State Bank of Vietnam before submitting to the Prime Minister for consideration and decision according to the mechanism of the Government lending to the city for relending to implement projects and works proposed by the People's Committee of the City. The city shall be responsible for allocating funds from the city budget to repay principal and interest according to the law.

3. The total outstanding debt from sources of funds raised for investment projects and works under the investment tasks of the city budget as stipulated in Clauses 1 and 2 of this Article shall not exceed 100% of the total capital investment budget of the city budget according to the annual budget resolution of the Municipal People's Council (excluding funds raised for investment in projects as prescribed by law, and investment funds from supplementary targeted resources with unstable funding from the central government budget to the city budget, if any).

Article 6. The mobilization of funds for the construction of infrastructure within the scope of the city budget as provided for in Article 5 of this Decree shall be implemented as follows:

1. When there is a need to raise funds for investment, the People's Committee of the city shall prepare a plan to submit to the Municipal People's Council for decision in accordance with the provisions of the law.

2. Funds raised for investment in works and projects must comply with the following principles: works and projects using raised investment funds must ensure economic and social efficiency; works and projects for investment must be included in the five-year investment plan decided by the Municipal People's Council; works and projects must have an investment decision from the competent authority. The city must allocate the local budget to repay all debts when due.

Article 7. In addition to the funds raised for works and projects subject to investment from the budget as prescribed in Article 5 of this Decree, for other projects capable of recovering capital, the People's Committee of the city shall decide or submit to the competent authority for decision in accordance with the provisions of the law on raising investment through forms such as: BOT (build-operate-transfer), BTO (build-transfer-operate), BT (build-transfer), and other forms. Implement financial measures to support interest rates on investment loans, subsidize part of the difference between costs and service prices in accordance with the provisions of the law.

Article 8. The People's Committee of Hanoi City has the right to decide to accept non-repayable aid for the city regardless of the size of the aid; however, for aid related to religion, national defense, and security, it must report to the Prime Minister for decision; the Chairman of the People's Committee of the city is responsible for implementing the acceptance, management, and effective use of these aids, implementing accounting settlement procedures in accordance with the provisions of the law; periodically reporting to the Ministry of Finance and the Ministry of Planning and Investment for monitoring and supervision, and compiling reports to the Prime Minister.

Chapter III

IMPLEMENTATION

Article 9.

1. The Minister of Finance shall guide the implementation of this Decree.

2. The Ministers, Heads of ministerial-level agencies, Heads of government-affiliated agencies, Chairmen of People's Councils, and Chairmen of People's Committees of Hanoi City shall be responsible for enforcing this Decree.

Article 10.

1. Matters concerning the implementation of the state budget not specified in this Decree shall be carried out in accordance with the State Budget Law and Decree No. 60/2003/NĐ-CP dated June 6, 2003 of the Government detailing and guiding the implementation of the State Budget Law.

2. This Decree shall take effect fifteen days after its publication in the Official Gazette./.