Circular No. 190/1998/TT-BTC guides the implementation of certain policies and measures for managing the state budget for the year 1999.

CIRCULAR

GUIDING IMPLEMENTATION OF CERTAIN POINTS ON POLICIES AND MEASURES FOR MANAGING THE STATE BUDGET IN 1999 PURSUANT TO CIRCULAR NO. 190/1998/TT-BTC ISSUED BY THE MINISTRY OF FINANCE ON DECEMBER 31, 1998

Pursuant to Decision No. Decision No. 248/1998/QĐ-TTg dated December 24, 1998 of the Prime Minister on certain policies and measures for managing the socio-economic development plan and state budget in 1999;

The Ministry of Finance provides detailed guidance on certain points regarding policies and measures for managing the state budget in 1999 as follows:

I. ON THE GRADING OF THE STATE BUDGET:

1- Sources of revenue and expenditure tasks of budgets at each level: In 1999, it is the third year of stabilization according to the State Budget Law and the first year of implementing the Law Amending and Supplementing Certain Provisions of the State Budget Law. Therefore, sources of revenue and expenditure tasks of each level's budget shall be implemented according to the State Budget Law, the Law Amending and Supplementing Certain Provisions of the State Budget Law, and guiding documents of the Law.

For village-level budgets, due to the absence of income from slaughter taxes, localities need to proactively examine and adjust their budgets to ensure that villages have sufficient resources to fulfill their expenditure tasks.

As for expenditure tasks serving national border work in localities, which were previously funded by the central budget, they will be transferred to the local budget starting from 1999.

2- Continue to implement mechanisms for using certain sources of revenue for investment in infrastructure construction and socio-economic development in localities:

2.1- All revenues from land use fees and land tax, including land rental fees from foreign-invested enterprises (excluding land rental fees from oil exploration and exploitation activities managed by the central government), shall be used for investment in infrastructure construction.

2.2- All revenues from the sale of state-owned housing shall be used for developing housing funds and constructing community infrastructure such as water supply and drainage systems, street lighting, public sanitation facilities, etc.

2.3- Lottery revenues, local budgets shall enjoy 100%, of which localities may use a portion or all for new investments, upgrading, and repairing educational, health, and social welfare facilities according to the principle: revenues up to 20 billion VND shall be fully used for investment; revenues above 20 billion VND shall additionally use 50% of the excess amount for investment.

2.4- Agricultural land use tax, local budgets shall enjoy 100%. The allocation of revenue sources between budgets at different levels shall be carried out according to the provisions of the State Budget Law (amended and supplemented), with the minimum percentage allocated to village, town, and ward budgets being 20%. Localities are responsible for allocating corresponding resources from agricultural land use tax revenues for investment in agriculture and rural development, paying particular attention to building, repairing irrigation works, field canals, dike systems, agricultural stations, fishery extension services, introducing advanced scientific and technological advancements into production and processing of agricultural and forestry products, and adjusting crop and livestock structures.

2.5- Forest resource tax, including standing tree sales revenue (if any), localities may use all of it for investment, encirclement protection, planting, and improving forests, promoting forestry, scattered tree planting, etc.

2.6- Advertising revenue from television broadcasting: Shall be entirely used for upgrading, improving, repairing, and purchasing equipment for television stations according to Circular No. 81/TC/HCSN dated December 23, 1996 issued by the Ministry of Finance.

2.7- All revenues from anti-smuggling activities captured and processed by anti-smuggling forces at various levels shall be used for the purposes specified in Circulars No. 09/1998/TT-BTC dated January 20, 1998 and No. 47/1998/TT-BTC dated April 9, 1998 issued by the Ministry of Finance.

The classification and distribution of the aforementioned revenue sources shall be carried out according to the provisions of the State Budget Law (amended and supplemented), Decree No. 51/1998/NĐ-CP dated July 18, 1998 of the Government, and the guiding circular No. 103/1998/TT-BTC dated July 18, 1998 of the Ministry of Finance; in classification, efforts should be made to create conditions for district and village levels to balance their budgets from local revenue sources, limiting top-up supplements from higher-level budgets. Provinces are responsible for allocating corresponding resources from these revenue sources to invest according to the approved project list to ensure balanced and reasonable development among regions within the province and are responsible for directing expenditures according to their intended purposes. Management and investment in basic construction projects shall be carried out according to current regulations and provincial-level classification decisions. All of the above sources must be included in the local revenue and expenditure budget and recorded in detail separately for each source to allocate expenditures according to projects and specific tasks, ensuring expenditures are purposeful, economical, and effective while aligning with the progress and potential revenue generation, avoiding overspending and causing instability in budget management. At the end of the fiscal year, if the revenue from each source does not match the expenditures, it must be monitored and addressed in the following year to ensure the minimum expenditure equals the revenue. By no later than January 30 of the following year, localities must report to the Ministry of Finance on the implementation results of projects and works funded by each revenue source.

3- Rewards for exceeding revenue forecasts:

3.1- Rewards for exceeding revenue forecasts for localities in the following areas:

+ Special consumption tax on imported goods, export tax, import tax;

+ Special consumption tax on domestically produced goods (excluding special consumption taxes where local budgets enjoy 100%).

3.2- Conditions and principles for granting rewards shall be implemented according to Circular No. 103 TC/NSNN dated July 18, 1998 issued by the Ministry of Finance.

3.3- The level of enjoyment shall be decided by the Prime Minister.

3.4- The rewards for exceeding revenue forecasts mentioned above shall be used for investment in economic and social infrastructure projects in localities. Specific uses for investment in individual projects and rewards for provincial, district, and village-level budgets shall be decided by the Provincial People's Committee and reported to the Provincial People's Council.

3.5- Do not award bonuses exceeding the budgeted revenue from value-added tax on imported goods.

II. ON BUDGET REVENUE:

Based on the revenue targets assigned by the Prime Minister, ministries, central agencies, provinces, and the General Department of Customs must promptly carry out the task of allocating budget revenue targets to subordinate units and lower levels. The minimum allocation level must be equal to the target set by the Prime Minister, and it is necessary to allocate revenue targets for striving to increase by 5% to 10% compared to the target set by the Prime Minister.

To achieve and exceed revenue targets, within their scope and authority, all levels and sectors need to take practical measures:

2- Closely monitor the situation of economic and financial turmoil in the region and globally, particularly exchange rates and commodity prices, to proactively develop plans for production and business development; establish reasonable mechanisms and policies to concentrate on resolving difficulties for enterprises, creating conditions to boost production and business operations and product consumption.

3- Vigorously reorganize state-owned enterprises, firmly implement shareholding reforms to mobilize additional capital for production and business development, solve employment and income issues for workers, and focus capital on enterprises with effective operations. Guide and direct enterprises to use additional income for investment in modernizing equipment and technology, thereby increasing revenue for the budget.

4- For households engaged in small-scale industrial and trade businesses, reassess reasonable tax levels, announce and publicize stable tax rates every six months to one year; simultaneously control and penalize those households deliberately evading taxes.

5- Strengthen management over non-budgetary revenues, fees, and charges. Do not record income and expenditure for cases where units arbitrarily appropriate revenue for their own use.

6- During the process of collecting value-added tax, if the collected value-added tax exceeds or falls short of the budgeted amount, the Ministry of Finance shall adjust according to the principle:

- If value-added tax decreases compared to the budget, increase the supplementary funding to ensure localities have sufficient resources to fulfill their budgeted spending tasks.

- If value-added tax increases compared to the budget:

+ Within 5% increase compared to the budget, the local budget enjoys the entire additional portion according to the adjustment ratio and the central government does not reduce the supplementary amount according to the budget.

+ An increase of more than 5% compared to the budget, redistribute between the central and local budgets as prescribed, but the portion exceeding 5% (which the locality receives) must correspondingly reduce the supplementary funding or the amount transferred from the central budget to the locality.

III. ON BUDGET EXPENDITURE AND ECONOMY:

1- Regarding budget expenditure:

1.1- The Government assigns the 1999 budget expenditure for ministries and central agencies at 90% of the regular budget expenditure according to the central budget allocation plan approved by the Standing Committee of the National Assembly (excluding salary expenses and salary-like expenses; expenses funded by aid and foreign loans). Provincial People's Committees implement the assignment of the 1999 budget expenditure for subordinate units at 90% of regular budget expenditure (excluding salary expenses and salary-like expenses; expenses funded by aid and foreign loans) and for lower-level budgets at 100% according to the local budget allocation plan decided by the People's Council. On this basis, district People's Committees assign to subordinate units at 90% and for lower-level budgets at 100% according to the budget allocation plan decided by the People's Council. The retained 10% must be strictly managed from the beginning of the year and can only be used upon approval by the Government. Provincial People's Committees report the results of retaining 10% in their locality to the Ministry of Finance before February 15, 1999.

1.2- The expenditure level established by the Central Government is the average across regions used to allocate the budget to localities. Therefore, when allocating expenditure levels to lower levels and units, based on the general expenditure level established by the Central Government, taking into account the nature of work and specific characteristics of each level and unit, provinces and centrally-administered cities may apply the expenditure level appropriately.

1.3- When determining the local budget, priority areas should be identified:

+ In basic construction, focus on agricultural investment and rural development, paying particular attention to water conservancy projects, dykes, schools, etc., limit the commencement of new projects in groups B and C. Funding for group C projects must follow the principle: concentration, no dispersion, ensuring sufficient funds for 70% of projects to be completed within the year; projects without complete construction procedures will not be allocated funds; suspend non-urgent and ineffective projects, if funds are allocated, the finance authority has the right to refuse disbursement.

+ In regular expenditure, focus on education, training, science and technology, culture, and information.

+ Allocate budget reserves at a necessary level to proactively respond to potential adverse developments.

1.4- Based on the assigned budget expenditure, primary budget units must allocate detailed budget estimates to budget users according to the State Budget Manual; the finance authority actively coordinates with the State Treasury at the same level to provide specific guidance to budget units under their jurisdiction to implement in accordance with the provisions of the Law Amending and Supplementing Certain Articles of the State Budget Law and related Circulars issued by the Ministry of Finance, avoiding hindrances to the execution of assigned tasks. Effectively supervise expenditures for budget users.

During the implementation, management, and ensuring that expenditures are made for the intended purposes, to the correct recipients, and according to the approved budget estimates, the heads of ministries, sectors, Chairmen of People's Committees at all levels, and the heads of agencies and grassroots units shall be responsible for managing and using state budget funds effectively. Expenditures recorded in the budget estimates and having guaranteed sources of revenue, ministries, sectors, and localities may not arbitrarily reduce them. Financial authorities at all levels shall be responsible for disbursing funds according to the progress of work, avoiding concentrating disbursements at the end of quarters or years (including supplementary disbursements to lower-level budgets). In cases where revenues fall short of budget estimates, each level of budget must proactively rearrange expenditures, reducing them accordingly, with priority given to cutting non-essential items first. If revenues increase, the additional revenues shall be used to increase expenditures, prioritizing water resources, agriculture, education and training, science and technology, culture, and other essential expenditure items.

1.5- Agencies and units using state budget funds must prepare quarterly expenditure budgets (divided by month), submit final accounts reports or reports on the use of funds to the financial authority providing such funds in accordance with the provisions of the Law Amending and Supplementing Certain Provisions of the State Budget Law; in cases where there are no quarterly reports without justifiable reasons, the financial authority has the right to suspend the disbursement of the next quarter's budget (excluding salary-related payments) until these units provide their reports.

1.6- For unexpected tasks outside the plan (including famine relief, disaster recovery,...), ministries, sectors, localities, and units must proactively arrange expenditures within the scope of available revenues and total allocated funds to address these issues.

1.7- Regarding construction investment expenditures, ensure disbursement according to plans and only for completed works within the year that have all necessary settlement procedures. Projects or components that cannot be implemented in the current year should be scheduled in the following year's budget. In disbursements, prioritize projects in water resources, agriculture, education and training,...

1.8- From the beginning of the year, all levels and sectors and localities need to organize and direct the effective implementation of post-disaster recovery work from the 1998 natural disasters. Focus on investing and repairing water resource facilities, dykes, transportation,... to be prepared for any adverse developments during the 1999 rainy season.

2- On target programs:

2.1- For the eight national target programs and some target programs that are not national target programs but require high-level guidance and management, the planning mechanism and disbursement will still be carried out according to Decision No. 531/TTg dated August 8, 1996 of the Prime Minister.

2.2- For remaining target programs that are not national target programs, the disbursement for these target programs will be carried out through delegated funding or supplementary disbursements based on targets to local budgets.

Based on the expenditure budget assigned by the Prime Minister and guided by the Ministry of Finance, the program management agencies shall coordinate with the Provincial Department of Finance and Prices, the Provincial Department of Planning and Investment to draft a proposed allocation report to be submitted to the Provincial People's Council for decision-making, and the locality shall organize the allocation of the budget to subordinate levels and units in January 1999.

2.3- For the socio-economic development program for particularly difficult poor communes:

- Based on the state budget expenditure budget assigned by the Government and the list of poor communes on the territory already approved, the Provincial People's Committee shall determine specific funding amounts for each commune and publicly announce the funding amount for each target program in 1999, including ensuring that each commune completes one essential construction project such as: water resources, drinking water, transportation, schools, health stations, electricity, markets. The Commune People's Committee shall base on the actual situation of the commune to determine the type of construction project to be built and report to the Commune People's Council for approval and report to higher levels. The Provincial People's Committee shall compile and report to the Prime Minister, the Ministry of Planning and Investment, and the Ministry of Finance before March 31, 1999.

- On the basis of the report of the Provincial People's Committee, the Ministry of Finance shall organize the disbursement of funds according to the progress of implementation in accordance with the approved list by the Provincial People's Committee. The procedures and regulations for the disbursement and management of funds for particularly difficult poor communes will be detailed in separate documents.

- In addition to the central government budget transfer, localities need to proactively arrange their budgets to supplement additional resources for particularly difficult poor communes to better achieve set goals. Quarterly, the Provincial People's Committee shall be responsible for reporting to the Prime Minister, the Ministry of Finance, and the Ministry of Planning and Investment on the organization and implementation, difficulties, and obstacles needing resolution.

3- On cost savings:

To use state budget funds economically and effectively, in addition to retaining 10% as prescribed, continue to implement the policy of thorough thrift in state budget spending and the use of public assets. Strictly implement the provisions stipulated in Decision No. 248/1998/QĐ-TTg dated December 24, 1998 of the Prime Minister and the provisions in Circulars No. 93/1998/TT-BTC, Circular No. 94/1998/TT-BTC dated June 30, 1998 of the Ministry of Finance,... regarding travel expenses, conference expense regulations,... Implement measures to save money in conjunction with the transparency of the budget.

3.1- Ministries, central agencies, and localities need to proactively arrange and reasonably allocate existing office premises and equipment to serve assigned tasks well. Do not construct new office premises and conference halls (except for newly divided localities and cases already arranged in the annual plan). Based on the standard usage quotas for cars, adjust from surplus to shortage areas, and the ministries and localities shall report to the Ministry of Finance their car purchase needs for the Ministry of Finance to consolidate and report to the Prime Minister for decision.

3.2- Ministries, sectors, localities, and units shall be responsible for implementing and supervising the correct application of state policies and expenditure regulations. Strictly prohibit administrative and service agencies from unilaterally issuing and implementing expenditure systems outside the state's regulations; using official vehicles for personal matters, using official vehicles to transport officials beyond specified standards, using public funds for gifts and donations, taking advantage of meetings and conferences to organize vacations, ... taking advantage of management authority to arbitrarily mobilize assets and money from enterprises for their own administrative expenses; taking advantage of reputation to borrow and lend, occupying amounts due to the state budget.

3.3- Based on the announced support level, State-owned Joint Stock Corporations shall be responsible for reorganizing public service activities (training, healthcare, scientific research, economic services) and accounting for the costs of these activities in production and business expenses according to prescribed regulations.

3.4- In the allocation of the budget and during the organization and implementation process, savings and reductions compared to the implementation in 1998 shall be made in the following areas:

- Reduce by 30% compared to the implementation in 1998 for domestic travel expenses. Reduce by 40% for outbound and inbound delegation budgets.

- Reduce by 60-70% for equipment procurement, maintenance, conference, reception, ceremonial, and front office expenses of administrative and service agencies.

3.5- Ministries, sectors, localities, and units that use state budget funds shall proactively implement measures to save, register with higher-level authorities and financial bodies the amounts and levels of savings. Ministries and localities shall compile and report to the Ministry of Finance on the levels and measures of savings before March 1, 1999, for the Ministry of Finance to compile and report to the Government and National Assembly.

VI. IMPLEMENTATION ORGANIZATION:

This Circular takes effect from January 1, 1999. Ministries, sectors, and People's Committees of provinces shall base themselves on Decision No. 248/1998/QĐ-TTg dated December 24, 1998, of the Prime Minister and this Circular to guide agencies, units, and local government levels in implementation.