JOINT CIRCULAR No. 154/1998/TTLT/BTC-BGTVT GUIDING THE FINANCIAL MANAGEMENT REGIME FOR STATE ENTERPRISES OPERATING PUBLIC SERVICES IN THE DOMESTIC WATERWAY SECTOR

CIRCULAR

JOINT CIRCULAR OF THE MINISTRY OF FINANCE AND THE MINISTRY OF TRANSPORT
NO. 154/1998/TTLT/BTC-BGTVT DATE DECEMBER 4, 1998
GUIDELINES ON THE FINANCIAL MANAGEMENT REGIME FOR STATE ENTERPRISES ENGAGED IN PUBLIC SERVICES IN THE SECTOR
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Pursuant to Decree No. 56/CP dated October 2, 1996 of the Government on state enterprises engaged in public services, Circular No. 06 TC/TCDN dated February 24, 1997 of the Ministry of Finance guiding the financial management regime for state enterprises engaged in public services;

The Ministry of Finance and the Ministry of Transport hereby guide the financial management regime for state enterprises engaged in public services in the inland waterway sector as follows:

This technical regulation sets out technical requirements, testing methods, sampling procedures; management requirements; responsibilities of organizations and individuals producing, trading, and importing cigarettes.

1. This Circular applies to the object being state enterprises engaged in public services in the inland waterway sector (referred to as public service inland waterway enterprises) established by competent authorities pursuant to Decree No. 56/CP dated October 2, 1996 of the Government on state enterprises engaged in public services.

2. Public service inland waterway enterprises shall be responsible for using state capital and resources to perform assigned public service tasks. Due to the specific nature of the inland waterway sector, public service inland waterway enterprises may be assigned certain specialized management tasks related to inland waterways.

3. In addition to assigned public service tasks, public service inland waterway enterprises are permitted to utilize labor, land, capital, and assets provided by the State (after completing public service tasks) and raise additional capital to organize business activities consistent with their capacity and market demand under the following conditions:

- Approval by the authority deciding on enterprise establishment in writing;

- Not affecting the performance of assigned public service tasks in the inland waterway sector by the State;

- Must register supplementary business operations according to current regulations;

- Fulfill tax obligations for additional business activities in accordance with legal provisions;

- Account separately for additional business activities.

4. Infrastructure assets invested by the State in the inland waterway sector such as revetments, buoys, and navigation aids along routes and channels do not require depreciation. Other fixed assets of the enterprise must be depreciated in accordance with regulations.

5. Public service inland waterway enterprises that collect fees and charges, if permitted by the State, may retain a portion of collected fees and charges to cover costs associated with fee and charge collection and account separately (the Ministry of Finance will issue guidelines on the fee and charge collection regime for public service inland waterway enterprises in accordance with legal provisions on fees and charges).

6. Public service inland waterway enterprises implement tax policies and other payments to the State budget in accordance with the Ministry of Finance's regulations for state enterprises engaged in public services.

7. Public service inland waterway enterprises are exempt from paying the State budget capital usage fee.

8. Public service inland waterway enterprises are subject to financial oversight by the finance authority acting as the representative of the State owner regarding capital and assets at the enterprise under the delegation of the Government.

II. MANAGEMENT AND USE OF CAPITAL AND ASSETS

1. Capital Investment:

1.1. Public service inland waterway enterprises are provided with initial charter capital by the State, not less than the statutory capital prescribed by the State according to industry as stipulated in Decree No. 50/CP dated August 28, 1996 of the Prime Minister to invest in construction, purchase, and acquisition of fixed and circulating assets appropriate to scale and assigned public service tasks. 1.2. Public service inland waterway enterprises currently operating, if lacking capital compared to assigned tasks (after mobilizing existing capital within the enterprise), are supplemented with State investment capital as follows:

- In cases where public service inland waterway enterprises have profits, they may be considered for reduced income tax to supplement enterprise capital according to current regulations.

- In cases without profit or where reduced income tax still does not meet capital requirements, the State may consider providing additional capital.

1.3. Procedures for basic construction investment and working capital provision for public service inland waterway enterprises are implemented in accordance with current State regulations.

2.1. Public service inland waterway enterprises have the right to mobilize capital through all forms to serve public service activities in accordance with legal provisions, but must not change ownership form and must ensure the following conditions:

2. Capital Mobilization:

- Submitting plans to the capital and asset management authority at the enterprise and the authority deciding on enterprise establishment.

- Approval by the authority deciding on enterprise establishment to implement capital mobilization (after obtaining consensus from the capital and asset management authority at the enterprise).

2.2. In cases of organizing additional business activities outside assigned public service tasks, public service inland waterway enterprises may borrow from credit organizations, other enterprises, and individuals (including employees within the enterprise) to serve additional business activities, but must comply with legal provisions and not change ownership form.

2.3. Interest rates on mobilized capital are accounted for as production and service expenses but must not exceed the maximum lending rate published by the State Bank of Vietnam during the capital mobilization period (by industry).

2.4. When mobilizing capital, careful consideration must be given to economic efficiency, ensuring proper and effective use of capital, avoiding short-term loans for basic construction investment, and accounting separately for borrowed funds to support production and additional business development, allocating interest payments accurately to the respective parties. Enterprises must repay principal and interest according to their commitments when mobilizing capital.

2.5. The Director of public service inland waterway enterprises is responsible to the State for preparing capital mobilization plans, misusing or inefficiently using capital leading to capital losses.

3. Capital Investment Outside the Enterprise:

3. Investment of capital outside the enterprise:

3.1. When there is a need to use assets, the value of land use rights, or land rent money to invest outside the enterprise, inland waterway public service enterprises must prepare a capital contribution plan or explain the joint venture project and submit it to the agency that established the enterprise. After reaching agreement with the state capital and asset management agency at the enterprise, the agency that established the enterprise will decide on implementation.

3.2. Investment of capital outside the enterprise shall not affect the assigned public service tasks, must comply with the law, ensure efficiency, preservation, and development of capital, and increase income. When using the value of land use rights for investment outside the enterprise, it must be carried out in accordance with the Land Law.

3.3. Inland waterway public service enterprises shall not use state capital to invest in financial businesses such as purchasing bonds, bills, or depositing savings.

3.4. Inland waterway public service enterprises are not permitted to invest in enterprises not under state ownership where the managers or main owners are the spouse, parent, or child of the General Director of the public service enterprise. Inland waterway public service enterprises must maintain accounting books to track all existing capital and assets in accordance with current accounting and statistical regulations; promptly and truthfully reflect the situation of capital and asset usage and changes during the operation process.

4. Transfer, lease, mortgage, pledge of assets:

4.1. The transfer, lease, mortgage, or pledge of assets under the management of inland waterway public service enterprises must be decided by the head of the agency that established the enterprise after obtaining written consent from the state capital and asset management agency at the enterprise.

4.2. When selling unused or obsolete equipment to recover capital, the enterprise must appraise and organize auctions in accordance with the law, the difference between the proceeds from the sale of the asset and its remaining book value and disposal costs shall be recorded in the enterprise's business results.

4.3. For assets leased for operation to enhance utilization efficiency and increase income, inland waterway public service enterprises must still depreciate according to prescribed regulations, monitor and reclaim the assets upon expiration of the lease term.

4.4. Assets pledged or mortgaged to borrow funds from credit organizations must be carried out in accordance with the procedures and formalities stipulated by the law.

4.5. Inland waterway public service enterprises may not pledge, mortgage, or lease assets borrowed, rented, held in custody, or received as collateral from other enterprises without the consent of the owners of those assets.

5. Liquidation of assets:

5.1. For machinery, equipment, and key assets that are crucial to the operations of inland waterway public service enterprises (with attached lists), liquidation must be approved in writing by the agency that established the enterprise and the state capital and asset management agency at the enterprise.

5.2. The liquidation of other assets shall be carried out in accordance with the provisions for state-owned enterprises engaged in commercial activities.

5.3. The enterprise must establish an Asset Liquidation Committee. If spare parts and scrap recovered from liquidated assets are used for production and business, the enterprise must organize appraisals; if the liquidated assets are sold, they must be auctioned in accordance with the law. The difference between the proceeds from the liquidation of the asset and its remaining book value and liquidation costs shall be recorded in the enterprise's business results.

5.4. For assets that do not require depreciation when sold or liquidated, the proceeds from the sale or liquidation (after deducting selling and liquidation costs) shall be fully remitted to the State Budget by inland waterway public service enterprises.

6. Responsibilities and handling of asset losses:

6.1. Losses caused by subjective reasons shall be borne by the person responsible for compensation.

6.2. If the loss is due to objective reasons, for insured assets, the insurance organization shall compensate.

6.3. Remaining losses (after deducting compensation payments from the responsible party and insurance compensation), inland waterway public service enterprises may use the financial reserve fund (if available) to cover the deficit, which shall be recorded as business expenses if insufficient.

6.4. In cases of asset losses due to force majeure (natural disasters, fires...), inland waterway public service enterprises shall develop plans to report to the agency that established the enterprise and the finance agency for handling or reporting.

7. Capital transfer, responsibility for capital preservation, revaluation of assets, management of receivables and payables, inland waterway public service enterprises shall implement as prescribed by the State for state-owned enterprises engaged in commercial activities.

8. Inland waterway public service enterprises shall extract and use depreciation of fixed assets (for assets subject to depreciation) in accordance with the Ministry of Finance's regulations. All depreciation of fixed assets shall be retained for reinvestment, modernization, and replacement of fixed assets for the needs of inland waterway public service enterprises' operations. The use of retained depreciation capital must comply with the regulations of the Ministry of Finance. For assets not subject to depreciation, inland waterway public service enterprises must still maintain accounting records to manage, monitor, and reflect the wear and tear value according to regulations.

III. FINANCIAL PLAN AND HANDLING OF ENTERPRISE PUBLIC SERVICE INLAND WATERWAY FINANCIAL RESULTS

A. FINANCIAL PLAN

1. Annually, based on industry development guidelines, financial regulations and guidance from financial agencies, inland waterway public service enterprises must prepare production plans, public service product supply plans, financial revenue and expenditure plans according to assigned tasks, report to the agency that established the enterprise and the same-level financial agency. The agency that established the enterprise has the responsibility to approve, compile reports to competent authorities and related financial agencies.

2. Within the annual budget revenue and expenditure plan approved, the head of the agency deciding to establish the enterprise shall assign plans to the public service inland waterway enterprise and send them to the same-level financial agency for coordination in implementation.

B. FINANCIAL RESULTS

1. The revenue from the public service activities of the public service inland waterway enterprise includes revenue from public service activities, production and business operations, and other activities.

1.1. Revenue from public service inland waterway activities includes:

Revenue from the State paying for products and services provided according to the approved plan and budgeted unit prices (including income from performing specialized management tasks).

The basis for the State to pay the units providing public goods and services is:

- Budgeted unit prices for products and services approved by the competent authority based on current state policies;

- Public service tasks assigned by the head of the agency deciding to establish the enterprise;

- Quality and quantity acceptance certificates between the planning assignment agency and the public service inland waterway enterprise.

In cases of natural disasters such as typhoons and floods, if the public service inland waterway enterprise incurs additional costs beyond the assigned plan to address them, the enterprise shall prepare a damage assessment report (with confirmation from local authorities) and submit it to the competent authorities for consideration and supplementary funding according to regulations.

1.2. Revenue from production and business operations and other activities shall be applied as for state-owned enterprises engaged in business operations.

1.3. The public service inland waterway enterprise is responsible for maintaining accounting records to fully and promptly record and reflect all sources of income generated and issue invoices in accordance with the regulations of the Ministry of Finance. If special receipts or invoices are used, they must be registered with the Ministry of Finance (General Tax Department).

2. The expenses of the public service inland waterway enterprise include: public service expenses, business operation expenses, and other expenses.

2.1. The contents of public service expenses (including expenses related to specialized management tasks) include:

1. Material, fuel, and energy costs used during the operation process;

2. Wages, salaries, and allowances with wage nature according to state regulations;

3. Contributions to social insurance, health insurance, and trade union funds according to state regulations;

4. Depreciation costs of fixed assets: Object and basic depreciation rate according to the regulations of the Ministry of Finance (excluding infrastructure assets not subject to depreciation as stipulated in Point 4, Section I above);

5. Regular maintenance and major repair costs of fixed assets;

6. Costs for constructing riverbank protection works, purchasing and replacing various types of navigational aids within the approved budget plan;

7. Costs for participating in search and rescue operations, environmental protection, and costs related to traffic law enforcement on inland waterways according to assigned tasks and plans;

8. Costs for dredging and salvaging underwater structures and obstacles caused by unidentified vessels;

9. Other costs include: Information and communication expenses, travel expenses, rental fees for fixed assets, land lease fees, working location rental fees, labor protective equipment expenses, scientific research, innovation, improvement, training, and skill enhancement for workers and managers, bank loan interest payments, asset insurance costs, auditing costs, reception, ceremonial, conference, transaction, and foreign affairs expenses...;

Expenses for raw materials and external services must have valid invoices according to the regulations of the Ministry of Finance. Reception, ceremonial, conference, transaction, and foreign affairs expenses must not exceed the limits set by the state.

2.2. The contents of production and business operation expenses and other expenses shall be implemented as for state-owned enterprises engaged in business operations.

3. The public service inland waterway enterprise may use its revenue to cover expenses, including:

3.1. Revenue from public service activities is used to cover public service activity expenses, taxes, and other state revenues as prescribed by law (excluding profit tax).

3.2. Revenue from business operations and other activities is used to cover business operation and other activity expenses, taxes, and other state revenues as prescribed by law (excluding profit tax). The public service inland waterway enterprise must ensure profitability in its business operations and other activities and cannot use profits from public service activities to offset losses in business operations and other activities.

C. DISPOSITION OF FINANCIAL RESULTS

1. For public service inland waterway enterprises that generate profits from providing public goods and services, the profits realized in the year (including business and other activity profits) shall be distributed in the following order:

a. Pay corporate income tax as required by law.

b. Deduct fines for violations of budget submission discipline, administrative violations, breach of contract penalties, overdue payment penalties, and legitimate expenses not deducted when determining taxable profit.

c. Deduct losses not deducted from pre-tax profits.

d. The remaining profit after deducting items a, b, and c shall be allocated to the following funds at the prescribed ratios and limits:

+ Development Investment Fund: Minimum allocation of 50%

+ Financial Reserve Fund: Allocation of 10%. The balance of this fund shall not exceed 25% of the charter capital.

+ Allocate up to two bonus and welfare funds totaling no more than three months' actual salary if the reported tax payment exceeds the previous year, or two months' actual salary if the reported tax payment is equal to or less than the previous year.

After allocating to the development investment fund, financial reserve fund, and two bonus and welfare funds, any remaining profit shall be transferred entirely to the development investment fund. If there are insufficient resources to allocate two bonus and welfare funds totaling two months' actual salary, the public service inland waterway enterprise shall be provided with the shortfall by the state.

2. For inland waterway public service enterprises that are paid for their public services products and services according to approved budget prices but still incur losses due to insufficient coverage of reasonable expenses (including expenses incurred from flood and storm prevention and rescue missions), after using 50% of profits from business operations and other activities to offset these costs, if there are still losses, the State will support as follows:

- Provide sufficient subsidies to cover the remaining losses (within the approved budget).

- Allocate two welfare and reward funds equal to two months' actual salary of the enterprise, with the remaining profit from business operations and other activities being allocated to the development fund at 80% and the financial reserve fund at 20%.

3. The procedures, timing for setting up, and purposes of the funds of inland waterway public service enterprises shall be carried out in accordance with those for state-owned enterprises engaged in business operations.

IV. ACCOUNTING AUDITS, FINANCIAL REPORTS, AND FINANCIAL TRANSPARENCY

1. Preparation of financial statements:

Quarterly and annually, inland waterway public service enterprises are responsible for preparing financial reports in accordance with current regulations. The General Director of inland waterway public service enterprises is responsible before the State and the law for the accuracy and truthfulness of the financial reports.

Financial quarterly and annual reports must be submitted to the following agencies:

+ The agency deciding on the establishment of the enterprise.

+ Vietnam Inland Waterways Administration (for central units), Department of Transport or Department of Public Works and Transport (for local units).

+ The agency managing state capital and assets in the enterprise.

+ Tax authority.

+ Statistical agency.

2. Accounting audits and financial report audits:

- Quarterly and annually, inland waterway public service enterprises are responsible for self-auditing accounting and financial reports.

- The agency deciding on the establishment of the enterprise, together with the agency managing state capital and assets in the enterprise, organizes the audit and approval of the annual financial reports of inland waterway public service enterprises.

- The financial agency has the responsibility to inspect compliance with financial systems, accounting practices, revenue and expenditure discipline, and the truthfulness of financial reports.

Violations of accounting systems, financial income and expenditure systems, revenue and expenditure to the State Budget, and the establishment and use of funds by inland waterway public service enterprises will be subject to administrative and economic penalties as prescribed by law.

3. Public disclosure of financial reports:

- Based on the annual financial report already approved by the competent authority, inland waterway public service enterprises must publicly disclose certain financial indicators at the workers' and staff congress of the enterprise.

- The contents of the financial indicators to be publicly disclosed are stipulated in the annex of this Circular.

V. IMPLEMENTATION PROVISIONS

1. In addition to the provisions set forth in this Circular, inland waterway public service enterprises must also comply with other legal regulations concerning financial management systems for state-owned enterprises.

2. This Circular takes effect fifteen days from the date of signature. All previous regulations regarding financial management for economic institutions (now converted to inland waterway public service enterprises) that conflict with this Circular are abolished.

3. During implementation, any difficulties should be promptly reported by inland waterway public service enterprises to the Ministry of Transport and the Ministry of Finance for study and appropriate amendments.

SOCIALIST REPUBLIC OF VIET NAM

Independence - Freedom - Happiness

                                Date...

TABLE OF PUBLIC DISCLOSURE OF FINANCIAL REPORTS

Year...

 

The enterprise is responsible for the accuracy and truthfulness of this report.

 

LIST OF KEY ASSETS FOR THE OPERATIONS OF PUBLIC SERVICE ENTERPRISES- Office of the President of the State-CP DATED SEPTEMBER 13, 2002 OF THE GOVERNMENT AMENDING AND COMPLEMENTING THE DECREE - Office of the President of the StateẾN HOẠT - Office of the President of the StateỘNG CÔNG ÍCH CỦA DOANH NGHIỆP
CÔNG ÍCH - Office of the President of the StateƯỜNG THUỶ NỘI - Office of the President of the StateỊA

 

1. Various types of water and land transport equipment.

2. Various types of houses, stations.

3. Various types of surveying machinery.

4. Various types of communication machinery.

5. Various types of depth-measuring machinery.

6. Various types of buoys and signs.