Circular No. 192-TC/TQD on collecting financial accumulations from the commercial circulation sector transferred to industrial production enterprises

 

CIRCULAR

Regarding the collection of financial accumulation from the commercial circulation sector to industrial enterprises

MINISTER OF FINANCE

Pursuant to Directive No. 132-TTg dated December 4, 1969 of the Prime Minister on the implementation of the provisional regulations on the collection of finance and distribution of profits for state-owned enterprises in the domestic trade sector, starting from January 1, 1970, all state-owned trading enterprises purchasing goods from central or local industrial enterprises shall pay according to the new transaction price; this price is the new wholesale industrial price, generally higher than the current wholesale industrial price. As for the domestic trade sector, it will no longer enjoy the gross profit margin of 19.63% or 20.36% based on the retail price but will only be entitled to a fixed commercial discount rate of 9.5% on the retail price, sufficient to ensure the circulation cost standards, commissions for cooperative buying and selling societies, and the state's retained profit for trading enterprises, specifically:

a) For products of central industrial enterprises, the wholesale industrial price is the system I retail price minus the industry-wide commercial discount rate applicable to each group of goods.

b) For products of local industrial enterprises:

- If consumed locally, the wholesale industrial price is the system I retail price of the producing locality minus the second-level commercial discount rate of that locality, calculated for each group of goods;

- If they are goods under unified state management and distribution with regulated prices sold to first-level domestic trade or other localities, the wholesale industrial price is the system I retail price of the producing locality minus the industry-wide commercial discount rate, calculated for each group of goods.

The above provisional regulations stipulate that the financial accumulation previously held in the circulation sector should be transferred to the production sector, preparing for the centralized nationalization at the production stage. Therefore, starting from January 1, 1970, industrial enterprises must submit all such accumulations to the state budget without allowing them to be mixed with enterprise profits.

Based on the Prime Minister's directive, the Ministry of Finance has established specific measures for submitting the aforementioned financial accumulation at the production enterprise stage and requests relevant ministries to guide enterprises to implement these measures promptly and fully.

A. FOR STATE-OWNED CENTRAL INDUSTRIAL ENTERPRISES THAT HAVE IMPLEMENTED THE NATIONALIZATION SYSTEM

I. Enterprises that have implemented the nationalization system.

To collect all financial accumulation from the trading sector, industrial enterprises that have implemented the nationalization system, when selling goods, must pay the nationalization revenue at a new level consisting of the officially prescribed nationalization revenue plus the difference between the old and new wholesale industrial prices.

For each enterprise, the Ministry of Finance will issue formal documents announcing the new nationalization revenue levels. However, to expedite the collection from January 1, 1970, enterprises and revenue collection agencies are requested to calculate the new revenue levels based on this circular and begin paying the nationalization revenue into the budget from January 1, 1970, without waiting.

II. Central Industrial Enterprises That Have Not Implemented the Nationalization System.

The principle is that industrial enterprises not yet subject to nationalization revenue (i.e., still paying corporate tax or commodity tax) must not allow the financial accumulation from the trading sector (i.e., the difference between the old and new wholesale industrial prices) to be mixed with industrial profits.

1. Starting from January 1, 1970:

a) Must pay corporate tax or commodity tax based on the new wholesale industrial price.

b) Must pay the difference between the old and new wholesale industrial prices as follows, to simplify calculation:

- If the enterprise is required to pay corporate tax at 2%, the amount to be paid is 98% of the difference between the old and new wholesale industrial prices.

- If commodity tax is payable, for each taxable item, the applicable percentage must be determined based on the current commodity tax rate to calculate the amount to be paid.

Example:

For a commodity tax rate of 10%, the amount to be paid is 90% of the difference between the old and new wholesale industrial prices.

For a commodity tax rate of 15%, the amount to be paid is 85% of the difference between the old and new wholesale industrial prices.

c) Currently, some economic entities such as farms... are temporarily exempted or not required to pay corporate tax or commodity tax on certain items; for these items, starting from January 1, 1970, these entities must pay the full difference between the old and new prices into the budget.

2. Regarding the method of payment:

a) Corporate tax or commodity tax must be declared and paid according to the current procedures.

b) For the amount to be paid (as mentioned above), every time goods are sold, collected on behalf of others, or paid through other methods, the industrial enterprise must fill out a declaration form detailing the quantity, price of goods sold, and the amount to be paid. The declaration form must be sent to the revenue collection agency in one copy, and four copies to the bank, following the nationalization revenue collection procedure.

When the sale proceeds reach the bank, the bank must immediately transfer the declared amount to be paid into the budget.

Upon receiving the declaration form, the revenue collection agency must:

- Review the declaration and calculation of the amount to be paid by the enterprise;

- Monitor and urge the enterprise to pay accurately, sufficiently, and timely; together with the bank, promote and assist the enterprise to collect sale proceeds on schedule and pay into the budget promptly.

In exceptional cases where small enterprises have low sales volume per transaction, the revenue collection agency may agree to allow the enterprise to make payments at least twice a month, without having to pay per transaction, but each payment must be detailed and the revenue collection agency must conduct thorough reviews.

If the enterprise sells goods and receives payment by check, the enterprise must declare and pay immediately.

3. As instructed by the Prime Minister, it is requested that the Ministries of Production direct industrial enterprises to apply new prices in their transactions with trading enterprises, and together with the Ministry of Finance direct basic enterprises to fully remit to the State budget the financial accumulations previously held in the distribution sector but now transferred to the production sector.

III. For certain special goods.

1. From January 1, 1970, products of industrial enterprises sold to the defense sector, or directly to other state-owned enterprises for production purposes, shall be subject to the new wholesale industrial price applicable to domestic trade. However, medical alcohol from the Hanoi Distillery sold to military hospitals and the health sector shall still follow the old wholesale industrial price.

2. For bicycles and bicycle parts, the new wholesale industrial price paid by the domestic trade sector to state-owned enterprises producing these items shall be the supply price of the domestic trade sector minus (-) the industry-wide discount rate set for bicycles and bicycle parts.

B. FOR STATE-OWNED AND LOCAL INDUSTRIAL ENTERPRISES

I. For the few industrial enterprises currently applying the method of remitting accumulations to the budget under the state-owned collection system, they shall act according to the provisions in Part A, Section I. It is requested that the Provincial People's Committees lead all necessary preparations to ensure collection at the new rate starting from January 1, 1970.

II. For the majority of industrial enterprises currently remitting accumulations to the budget under Decree 93-TTg dated September 17, 1962, and Decision 45-CP dated March 29, 1965: it is requested that the Provincial People's Committees lead the implementation of the organization of collection as follows:

1. Urge the commerce bureaus and departments to report to the Committee on calculations and construction of the second-level commercial discount rates for each group of goods during this month of December. At a central inter-ministerial meeting on internal trade, finance, banking, and pricing scheduled for early December, the Ministry of Internal Trade has guided the commerce bureaus and departments on unified calculations of these discount rates with the finance bureaus and departments to submit to the Committee for review. The Provincial People's Committee shall approve and announce the new discount rates to the industrial bureaus and departments; the industrial bureaus and departments must guide local industrial enterprises to calculate and apply the new wholesale industrial prices for the goods produced.

2. Based on the new wholesale industrial selling price, each enterprise, together with the collection agency, immediately determine the difference between the old and new wholesale industrial selling prices. Local industrial enterprises, collection agencies, and banks have the responsibility to ensure the remittance to the budget of the difference amount according to the formula and procedures specified in Part A, Section II, regarding central industrial enterprises.

3. For local industrial enterprises approved to incur planned losses, it is necessary to fully calculate the difference between the new and old wholesale industrial selling prices; active measures should be taken to reduce the planned loss level, aiming towards zero loss. In each settlement period, enterprises must clearly separate and distinctly record the difference between the new and old wholesale industrial selling prices, not mixing them with the enterprise's loss amount.

4. From now until January 1, 1970, after receiving materials from the Ministries of Internal Trade and Finance, the finance bureaus and departments must inform the industrial bureaus and departments and local industrial enterprises about the industry-wide discount rates for each group of goods, so that enterprises have a basis for calculation when selling out-of-province industrial goods produced locally but under unified national management and pricing.

C. PROVISIONS ON ENTERPRISE ACCOUNTING

To fully and clearly reflect the difference between the old and new wholesale industrial selling prices to be settled with the budget, state-owned enterprises shall account as follows:

1. For enterprises already applying the state-owned collection system: Since the difference between the old and new wholesale industrial selling prices has been included in the new state-owned collection rate, accounting in the "settlement with the budget" account will continue as before, without any changes.

2. For industrial enterprises not yet implementing the state-owned collection system, enterprises need to open an account titled "settlement with the budget for the difference between the old and new wholesale industrial selling prices," designated as Account 095, with the following content:

The Debit side reflects the amount of the difference already remitted.

The Credit side reflects the amount of the difference to be remitted.

Specifically:

- After calculating the amount of the difference to be remitted, record:

Debit the "sales" account.

Credit the "settlement with the budget for the difference between the old and new wholesale industrial selling prices" account.

- When remitting this difference to the budget, record:

Debit the "settlement with the budget for the difference between the old and new wholesale industrial selling prices" account.

Credit the "bank deposit" account.