Circular No. 162/2012/TT-BTC on the temporary advance of funds from the State Treasury

CIRCULAR

Regulations on the Advance Payment of State Treasury Funds

_________________

 

Pursuant to Decree No. 60/2003/NĐ-CP dated June 6, 2003 of the Government detailing and guiding the implementation of the Law on State Budget;

Pursuant to the Decree No. 118/2008/NĐ-CP dated November 27, 2008 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Finance;

Pursuant to Decree No. 123/2004/NĐ-CP dated May 18, 2004 of the Government on certain special financial and budget mechanisms for Hanoi;

Pursuant to Decree No. 124/2004/NĐ-CP dated May 18, 2004 of the Government on certain special financial and budget mechanisms for Ho Chi Minh City;

Pursuant to Decision No. 108/2009/QĐ-TTg dated August 26, 2009 of the Prime Minister on the functions, tasks, powers, and organizational structure of the State Treasury under the Ministry of Finance;

At the proposal of the General Director of the State Treasury, the Ministry of Finance guides the implementation of advance payment of State Treasury funds as follows:

PART I

GENERAL PROVISIONS

Article 1. Subjects Eligible for Advance Payment of State Treasury Funds

The State Treasury may provide advance payments to the following subjects:

- Central budget;

- Provincial budgets (hereinafter referred to collectively as provincial-level budgets);

Article 2. Scope of Advance Payment of State Treasury Funds

1. Advance payment of State Treasury funds to the central budget to address temporary shortfalls and meet urgent expenditure needs when state revenues have not yet been collected.

2. Advance payment of State Treasury funds to provincial budgets to implement the following projects and works:

2.1. Investment construction projects and works recorded in the annual plan that need to be expedited to ensure timely completion and put into operation to achieve economic and social benefits approved by the People's Council of the province or centrally-administered city (hereinafter referred to collectively as the People's Council of the province).

2.2. Infrastructure investment projects and works that generate revenue to repay the advance payment already approved by the competent authority to attract domestic and foreign economic organizations' investments.

- Advance payment of State Treasury funds to the state budget shall be decided by the Minister of Finance according to the principle of not affecting the settlement and payment tasks of the State Treasury.

- Any advance payments used for purposes not approved will be recovered.

- Advance payment of State Treasury funds shall be carried out at the State Treasury and the State Treasuries of centrally-administered provinces and cities. District, county, town, and centrally-administered city State Treasuries are not permitted to carry out advance payment of State Treasury funds.

- All advance payments from State Treasury funds must be repaid on time and in accordance with regulations. In cases where advance payments are not repaid on time and in accordance with regulations, the State Treasury has the right to deduct from the treasury fund to recover the full amount of the advance payment, advance payment fees, and late advance payment fees (if applicable).

Units receiving advance payments from State Treasury funds are responsible for using the advance payments for approved purposes, fully and timely repaying the advance payments, and paying the State Treasury the fees on the amount of advance payments according to this Circular. Additionally, for advance payments from State Treasury funds to provincial budgets (as stipulated in Point 2.1 Clause 2 Article 2 of this Circular), the People's Committee of the province or centrally-administered city (hereinafter referred to collectively as the People's Committee of the province) is responsible for implementing the advance payment of State Treasury funds in accordance with the Resolution of the People's Council of the province.

Chapter II

SPECIFIC PROVISIONS

Article 5. Procedures for Advance Payment of Funds

1. Procedures for Advance Payment of Funds for the Central Budget

Based on the total amount of advance payment of funds approved by the Ministry of Finance at the beginning of the year, when there is a need for advance payment, the State Budget Department shall prepare an advance payment form according to Form 01. On the basis of the advance payment form prepared by the State Budget Department and based on the funds of the State Treasury, the State Treasury shall make advance payments of funds to the central budget.

- When there is a need for advance payment of funds from the State Treasury, the People's Committee of the province shall implement the following procedures:

+ In the case of advance payment to accelerate the progress of basic construction projects (as stipulated in Point 2.1, Clause 2, Article 2 of this Circular): The People's Committee of the province, based on the Resolution of the People's Council of the province approving the advance payment of funds from the State Treasury, shall send a letter to the Ministry of Finance requesting advance payment of funds from the State Treasury. The letter shall clearly state the list of projects for which funds are being advanced; the schedule for advance payment of funds; the schedule for repayment of advance payments; the total outstanding debt from all sources of funds raised (including other sources such as issuing bonds, borrowing from banks, etc.) and commitments to use the advance funds for their intended purpose, effectively, and to repay them on time, along with other commitments for the Ministry of Finance to consider and decide.

+ In the case of advance payment for investment projects attracting investment capital (as stipulated in Point 2.2, Clause 2, Article 2 of this Circular): The People's Committee of the province shall send a letter to the Ministry of Finance requesting permission to make advance payments of funds from the State Treasury. The letter shall clearly state the list of projects for which funds are being advanced; the level of investment capital for each project; the schedule for advance payment of funds; the source and schedule for repayment of advance payments and commitments to use the advance funds for their intended purpose, effectively, and to repay them on time, along with other commitments for the Ministry of Finance to consider and decide.

- After receiving the approval letter for advance payment of funds from the State Treasury from the Ministry of Finance, the People's Committee of the province shall prepare an advance payment form according to Form 02 and send it to the State Treasury to make advance payments of funds as prescribed.

- Based on the advance payment form of the People's Committee of the province that has been signed off by the State Treasury, the State Treasuries of provinces and centrally-administered cities (hereinafter referred to collectively as the provincial-level State Treasury) shall make advance payments of funds from the State Treasury to the provincial budget.

Article 6. Level of Advance Payment of Funds from the State Treasury

1. The level of advance payment of funds for the central budget shall be decided by the Minister of Finance.

2. The level of advance payment of funds for provincial budgets

2.1. Basis for Determining the Level of Advance Payment of Funds from the State Treasury

- For investment projects and works included in the annual plan under the provincial budget as stipulated in Point 2.1, Clause 2, Article 2 of this Circular: the level of advance payment must ensure that the annual outstanding debt of the provincial budget (including advance payments from the State Treasury and other sources of funding) does not exceed 30% of the total annual investment capital for domestic basic construction projects in the provincial budget (except for Hanoi and Ho Chi Minh City, which should not exceed 100%). Among these, the total annual investment capital for domestic basic construction projects in the provincial budget includes:

+ Domestic centralized investment capital for basic construction within the provincial budget balance;

+ Investment capital for basic construction from land use fees;

+ Targeted supplementary sources of investment capital for basic construction with a stable nature from the central budget (if any);

+ Investment capital for basic construction from lottery revenue.

- For infrastructure investment projects with revenue to repay advance payments as stipulated in Point 2.2, Clause 2, Article 2 of this Circular: the level of advance payment shall be determined on a case-by-case basis based on the availability of funds in the State Treasury and the specific needs of the provincial budget.

2.2. The specific level of advance payment of funds shall be decided by the Minister of Finance.

Article 7. Advance Payment Period and Withdrawal Period

1. Advance payment period for the central budget: not exceeding 12 months from the date of advance payment by the State Treasury.

- For advance payments to provincial budgets to accelerate the progress of basic construction projects listed in the annual plan of the province, city (as stipulated in Point 2.1 Clause 2 Article 2 of this Circular):

+ Advance payment period: maximum 12 months from the date the State Treasury approves the advance payment on the advance payment voucher of the State Treasury.

+ Withdrawal period: within the fiscal year in which the advance payment is approved by the Ministry of Finance. After the adjustment period for the final settlement of the fiscal year, the advance payment will cease to be valid for withdrawal.

- For advance payments to provincial budgets for investment in infrastructure projects to attract investment (as stipulated in Point 2.2 Clause 2 Article 2 of this Circular):

+ Advance payment period: decided by the Ministry of Finance.

+ Withdrawal period: maximum 12 months from the date the Ministry of Finance approves the advance payment; in cases of multiple withdrawals, the above period applies to the last withdrawal. After the withdrawal period, the advance payment will cease to be valid for withdrawal.

Article 8. Recovery of Advance Payments

1. Recovery of advance payments upon maturity

- For the central budget: 15 days before the recovery deadline, the State Treasury notifies the Department of State Budget to arrange sources for repayment of the advance payment.

- For provincial budgets:

15 days before the recovery deadline, the provincial State Treasury notifies the financial authority to arrange sources for repayment of the advance payment.

Upon maturity, if the advance payment has not been repaid, the provincial State Treasury sends a notice to the Provincial People's Committee informing them that the advance payment is overdue and the late fee amount.

One month after the repayment deadline, if the advance payment has not been repaid, the State Treasury reports to the Ministry about deducting the provincial treasury balance to recover the advance payment, late fees, and overdue late fees. Based on the approval of the Ministry of Finance, the State Treasury informs the Provincial People's Committee about the deduction of the provincial treasury balance to recover the advance payment and overdue late fees; the provincial State Treasury calculates the overdue late fee and implements the deduction of the provincial treasury balance to recover the advance payment and late fees.

2. Recovery of advance payments used for improper purposes:

2.1. Advance payments from the State Treasury used for purposes not approved by the Ministry of Finance will be recovered prematurely.

2.2. Based on notifications and conclusions regarding improper use of advance payments from the State Treasury by competent state agencies, reports on the use of advance payments from the State Treasury by the entity receiving the advance payment compared with the list of requested advance payments from the State Treasury; the State Treasury will recover the improperly used advance payment. The process of recovering advance payments used for improper purposes for local budgets is as follows:

The State Treasury reports to the Ministry of Finance and notifies in writing the Provincial People's Committee about the improperly used advance payment and the remaining undrawn advance payment (if any); at the same time, requests the Provincial People's Committee to immediately arrange sources for repayment of the advance payment. The latest repayment deadline is one month from the date of issuance of the notification.

Upon expiration of the repayment deadline, if the Provincial People's Committee has not repaid the advance payment, the State Treasury reports to the Ministry about deducting the provincial treasury balance to recover the advance payment, late fees, and overdue late fees. Based on the approval of the Ministry of Finance, the State Treasury informs the Provincial People's Committee about the deduction of the provincial treasury balance to recover the advance payment, late fees (if any), and overdue late fees; the provincial State Treasury implements the calculation of late fees (if any), overdue late fees, and the deduction of the provincial treasury balance to recover the advance payment, late fees, and overdue late fees. Overdue late fees are calculated from the date of issuance of the notification to the Provincial People's Committee regarding the improperly used advance payment.

Article 9. Advance Fee and Overdue Advance Fee

- The advance payment fee rate for the State Treasury shall be uniformly applied at 0.15%/month (30 days) based on the outstanding balance of the advance payment.

- The overdue advance fee level is calculated based on the basic interest rate published by the State Bank at the time of calculating the overdue advance fee. The overdue advance fee is calculated based on the overdue advance fee level and the number of overdue days.

2. Payment and Management of Fees:

- The advance fee is paid periodically monthly to the State Treasury based on the outstanding balance of advances and the actual number of advance days.

- The overdue advance fee is paid when recovering the overdue advance amount and is calculated based on the outstanding balance of overdue advances and the number of overdue advance days.

- The State Treasury manages and uses the advance fee from the State Treasury and the overdue advance fee according to the regulations of the Ministry of Finance.

Article 10. Accounting Entries and Reporting

- Advances, refund of advances, advance capital fees (including advance fees and overdue advance fees) of the State Treasury are recorded according to the current state budget account and in accordance with the regulations of the Ministry of Finance.

- Periodically (monthly, quarterly, annually), the provincial State Treasury reports the situation of advances, recovery of advances, and advance fee revenue to the State Treasury before the 15th day of the following month, quarter, and before February 20th of the following year for annual reports. The content and format of the report are specifically guided by the State Treasury.

- Every six months and annually, the State Treasury reports to the Ministry of Finance the situation of advances, recovery of advance capital of the State Treasury.

Chapter III

IMPLEMENTATION

Article 11. Tasks of the State Treasury and Related Units

1. The State Budget Department takes the lead and coordinates with the State Treasury to develop the annual plan for State Treasury advances for the central budget to be submitted to the Ministry of Finance for consideration and decision; leads and coordinates with the State Treasury to implement advances and refunds of central budget advances, and pays the advance fee of the central budget to the State Treasury.

2. The State Treasury takes the lead and coordinates with the State Budget Department and related units to submit to the Ministry of Finance for consideration and decision on State Treasury advances for provincial and centrally-administered city budgets.

4. Provincial Departments of Finance and State Treasuries must closely coordinate in planning revenues and expenditures, urging timely collection, ensuring reasonable, timely, and effective use of advances, and full and timely repayment of advances and payment of advance capital fees to the State Treasury.

Article 12. Effective Date

This Circular takes effect from January 1, 2013, and replaces Circular No. 49/2005/TT-BTC dated June 9, 2005, of the Ministry of Finance guiding State Treasury advances for the state budget. All previous regulations of the Ministry of Finance and the State Treasury regarding State Treasury advances for the state budget that contradict this Circular are not enforceable./.