Joint Circular No. 19/1999/TTLT/BLDTBXH-BTC supplements Circular No. 18/1998/TTLT-BLDTBXH-BTC dated December 31, 1998 on determining the wage fund for implementation in state-owned enterprises.

JOINT CIRCULAR

Supplemental Circular No. 18/1998/TTLT-BLDTBXH-BTC dated December 31, 1998 on the determination of the actual wage fund for state-owned enterprises

Regarding the determination of the actual wage fund to be implemented in state-owned enterprises

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Circular Joint No. 18/1998/TTLT-BLDTBXH-BTC dated December 31, 1998 of the Joint Circular of the Ministry of Labor, War Invalids and Social Affairs and the Ministry of Finance has not provided specific guidance on determining the actual wage fund of independent enterprises directly under ministries managing industries and fields, localities, and independent accounting units within State-Owned Enterprises 91/TTg and 90/TTg, leading to inconsistent implementation among enterprises. Based on the actual situation, the Joint Ministries of Labor, War Invalids and Social Affairs and Finance provide additional guidance as follows:

I. For general enterprises:

1/ When reviewing the wage rate, competent authorities according to their management level must consider the conditions for applying the adjustment factor to increase the minimum wage as stipulated in Decree No. 28/CP dated March 28, 1997 of the Government and Circular No. 13/LDTBXH-TT dated April 10, 1997 of the Ministry of Labor, War Invalids and Social Affairs, and then issue a decision assigning the wage rate with profit targets (must be based on the previous year) to serve as the basis for reducing the actual wage fund.

2/ When the enterprise's actual profit is lower than the assigned profit target for the wage rate decided by the competent authority, the actual wage fund must be reduced according to Clause II of Circular Joint No. 18/1998/TTLT-BLDTBXH-BTC.

II. For State-Owned Enterprises 91/TTg and 90/TTg:

1/ According to the provisions at Point 3, Section III of Circular Joint No. 18/TTLT-BLDTBXH-BTC, the wage rate that is effective for determining the actual wage fund for units within State-Owned Enterprises 91/TTg and 90/TTg is the decision assigning the wage rate by the Chairman of the Board of Management or General Director (for enterprises without a Board of Management) corresponding to the tax revenue and profit targets of the units, but when aggregated, it must not exceed the wage rate reviewed by the competent authority. Now, further detailed guidance is provided as follows:

a) The actual wage fund of independent accounting units within State-Owned Enterprises is determined according to the wage rate assigned by the Chairman of the Board of Management or General Director of the State-Owned Enterprise corresponding to the profit target assigned. If the actual profit of the unit is lower than the assigned profit target, the actual wage fund must be reduced according to Clause II of Circular Joint No. 18/1998/TTLT-BLDTBXH-BTC mentioned above.

b) State-Owned Enterprises 91/TTg and 90/TTg have the responsibility to:

Send the decision assigning the wage rate by the competent authority to the Provincial Tax Office where the State-Owned Enterprise is headquartered to serve as the basis for determining the actual wage fund of the entire State-Owned Enterprise.

Send the decision assigning the wage rate of each unit to the Provincial Tax Office where the unit is headquartered to serve as the basis for determining the actual wage fund of the unit.

c) State-Owned Enterprises 91/TTg and 90/TTg have the responsibility to aggregate the actual wage fund and actual profit of the units and the centralized accounting portion of the State-Owned Enterprise. The reduction of the actual wage fund is handled as follows:

If the actual profit of the State-Owned Enterprise is lower than the profit corresponding to the assigned wage rate, the actual wage fund must be reduced according to Clause II of Circular Joint No. 18/1998/TTLT-BLDTBXH-BTC. The Chairman of the Board of Management or General Director of the State-Owned Enterprise will review and allocate the reduced wage fund among the units of the State-Owned Enterprise.

If the actual wage rate of the entire State-Owned Enterprise exceeds the assigned wage rate reviewed by the competent authority, the Chairman of the Board of Management or General Director of the State-Owned Enterprise must adjust the actual wage fund of the units to ensure it does not exceed the assigned wage rate reviewed by the competent authority.

The State-Owned Enterprise has the responsibility to send a list of units required to reduce the wage fund to the Provincial Tax Office where the State-Owned Enterprise is headquartered and where the units are headquartered to serve as the basis for adjusting the actual wage fund.

III. Determination of the actual wage fund for 1999:

In 1999, which is the first year that state-owned enterprises implement the Value Added Tax Law (VAT), when reviewing the wage rate for 1999, the competent authority has calculated and brought it to the same level for comparison with the actual profit of 1998 and assigned the wage rate. Therefore, the determination of the actual wage fund for 1999 is based on the assigned wage rate and profit target corresponding to the wage rate reviewed by the competent authority according to the management level.

IV. This Circular takes effect from the date of issuance to determine the actual wage fund for enterprises starting from 1998 and replaces Clause b, Point 1, Part C, Clause IV of Circular No. 13/LDTBXH-TT dated April 10, 1997 of the Ministry of Labor, War Invalids and Social Affairs. As for Point 2, Clause II of Circular Joint No. 18/1998/TTLT-BLDTBXH-BTC dated December 31, 1998 of the Joint Ministries of Labor, War Invalids and Social Affairs and Finance, it is revised as follows:

"When the actual profit is lower than the profit target corresponding to the assigned wage rate reviewed by the competent authority according to the management level, the enterprise must reduce the actual wage fund corresponding to the profit decrease compared to the profit target corresponding to the assigned wage rate according to one of the two methods below:"

Symbol Pnt: actual profit of the previous year is now revised to Pkh: profit target corresponding to the assigned wage rate reviewed by the competent authority according to the management level.

The ministries managing industries and sectors, the People's Committees of provinces and centrally governed cities, and the State General Corporations 91/TTg and 90/TTg are responsible for guiding enterprises under their management to comply with the above regulations. Any difficulties encountered during implementation should be reported to the Joint Ministry of Labor, Invalids and Social Affairs - Finance for study and resolution./.