Circular No. 139/99/TT-BTC guiding the management and use of relief funds and goods to address the aftermath of floods and certain measures to continue supporting disaster recovery efforts in central provinces.

CIRCULAR

Guidelines for managing and using relief funds and goods to address the aftermath of floods and some measures to continue supporting disaster recovery efforts in central provinces affected by typhoons and floods.
Implementing Decision No. 1073/QĐ-TTg dated November 17, 1999 of the Prime Minister on addressing the aftermath of floods in the provinces of Quang Binh, Quang Tri, Thua Thien-Hue, Da Nang, Quang Nam, Quang Ngai, and Binh Dinh; the Ministry of Finance provides guidelines for the use and management of financial resources and measures to address the aftermath of typhoons and floods in central provinces as follows:
I. Regarding Relief Funds and Goods

All sources of relief (funds and goods) from the central budget, local budgets, and donations from organizations and individuals both domestically and internationally must be unified and centralized under one entity designated by the People's Committee of the province with the participation of the Fatherland Front, social organizations, and relevant agencies.

Local financial authorities have the responsibility to guide the establishment of accounting books, closely monitor, proactively balance various sources, and coordinate with relevant departments to develop distribution plans that ensure reasonable support levels between regions and units, to be submitted to the same-level People's Committee for decision. For districts and communes that have received significant external support and assistance, adjustments should be made for subsequent relief efforts to ensure fairness among regions based on the classification of damage and poverty levels of households, prioritizing areas and families with greater losses. Priority should be given to policy beneficiaries and impoverished households facing difficulties, as well as residents in remote and mountainous areas. The distribution of goods and funds must ensure fairness and transparency, with public participation in supervision (citizen inspectors) to prevent corruption and loss during distribution and use of relief funds and expenses for repair and production recovery.

- The level of support according to the guidance of the Ministry of Labor, Invalids, and Social Affairs in Document No. 3745/LDTBXH-TBXH dated November 3, 1999 is a general standard, and localities need to base their decisions on actual conditions. Strict and specific regulations must be established for relief to reach the people, with responsibilities assigned to grassroots levels. Regular inspections must be conducted to ensure that relief goods and funds reach the hands of the people. The allocation of livelihood support funds (according to Decision No. 1073/QĐ-TTg dated November 17, 1999 of the Prime Minister) for each province is detailed in the attached annex.

- For needs related to repairs, restoration, construction of water conservancy, transportation infrastructure, agricultural production recovery, school and health station repairs, etc., due to limited capital, localities need to base their decisions on the urgency and extent of damage of each type of facility to determine which facilities require immediate restoration and which can be addressed gradually. In terms of funding, apart from additional government construction investment funds for flood recovery, localities need to proactively review and allocate remaining 1999 construction investment funds (including additional government funds for stimulus measures) and donations from domestic and international organizations to adjust objectives and implement urgent tasks to restore production and stabilize people's lives.

Regarding management mechanisms, in principle, they must still follow current requirements for investment capital and public service fund management. However, for urgent projects, to ensure timely implementation, the provincial People's Committee will specifically decide on direct contracting but the issuance of funds, expenditure control, and project completion payment must still comply with current state regulations.

II. Implementation of Some Support Policies for Flood-Affected Areas

1. Agricultural Land Tax: Based on the extent of agricultural production damage in each area, the provincial People's Committee decides on exemptions or reductions according to regulations.

2. Property Tax:

- Households in rural areas whose houses were washed away, lost, or collapsed are exempted from property tax for one year.

- Households in rural or urban areas whose houses need repair are granted a 50% reduction in property tax for the entire year.

Determination of damage levels and regulations on exemptions or reductions in property tax are delegated to the provincial People's Committees.

3. Land Rent:

For businesses currently registered for land rental and paying rent to the state, depending on the extent of damage, exemptions or reductions may be considered as follows:

- Businesses suffering over 50% asset damage, with prolonged recovery before stable operations, are exempted from land rent for one year.

- Businesses suffering less than 50% asset damage may be granted a 50% reduction in land rent for one year.

4. Value Added Tax:

a) For businesses taxed under the deduction method, the following policies apply:

- Input VAT is promptly determined and fully deducted by tax authorities. Output VAT is declared based on actual sales. If there is no output VAT, monthly refunds are provided.

- Businesses suffering losses due to floods are allowed to deduct VAT losses according to Article 28 of the Law on Value Added Tax.

b) For individual businesses taxed directly or through a quota system, based on the extent of flood damage, exemptions or a 50% reduction in tax for one or two months may be granted. The provincial People's Committees determine damage levels and specify tax exemptions or reductions.

5. Corporate Income Tax:

b) For individual households conducting business that pay taxes directly or through tax quotas, based on the extent of damage caused by floods to each household's business, consideration shall be given to exempting or reducing by fifty percent the amount of tax due for one or two months. The People's Committee of the province or centrally governed city shall determine the extent of damage and specify the exemptions and reductions of taxes.

5. Regarding corporate income tax:

- For enterprises, expenses to address the aftermath of floods shall be recognized as reasonable costs for determining taxable income. If these reasonable costs are included and there is no longer any taxable income, corporate income tax shall not be paid. In cases where all costs have been accounted for and the enterprise incurs losses, such losses may be carried forward to offset taxable income in subsequent years (up to three years).

- For individual businesses subject to monthly fixed-rate corporate income tax, depending on the extent of damage, they shall be exempted or granted reductions in tax from one to two months, along with exemptions or reductions in value-added tax.

6. Regarding the reduction in local government budget revenue in 1999:

Pursuant to the Prime Minister's Decision, provinces and cities affected by floods that result in reduced revenue shall be compensated to fulfill their tasks related to centralized basic construction investment expenditures and regular expenditures according to the Government's budget allocation. Therefore, at the end of the fiscal year, provinces and cities must submit urgent reports on realized revenue results for the Ministry of Finance to consider and resolve. During the implementation process, if significant revenue shortfalls prevent timely disbursements, the Ministry of Finance will temporarily advance funds through the State Treasury.

7. For provinces with value-added tax revenue exceeding the 1999 budget allocation, according to Circular No. 58/1999/TT-BTC dated May 20, 1999 of the Ministry of Finance, excess amounts would be deducted from central government supplementary allocations. However, due to floods, the Ministry of Finance will transfer full supplementary allocations as per the budget allocation and retain any value-added tax (the portion allocated to local budgets) exceeding 5% to assist in addressing flood aftermaths.

8. Regarding the 2000 budget: Based on agreed state budget expenditures when recently working with localities, the Ministry of Finance will coordinate with the Ministry of Planning and Investment to request additional capital investment and public service funding from the Prime Minister for provinces and cities to address flood aftermath needs.

III. Implementation Organization

During implementation, if difficulties or obstacles arise, please report them to the Ministry of Finance for consideration and resolution.

Provincial People's Committees referred to herein shall base their directives to relevant sectors and units on Decision No. 1073/QĐ-TTg dated November 17, 1999 of the Prime Minister and the guidance provided in this Circular.