CIRCULAR

Guidelines for planning financial plans and state budget estimates for the year

1987

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The year 1987 is the second year of the five-year plan from 1986 to 1990, and at the same time, it is the first year to implement the economic and social tasks and goals set forth by the Sixth National Congress of the Party.

The main task of finance is to actively contribute to promoting production development, completing the complex of socialist transformation, expanding circulation and distribution, increasing national income, and accumulating revenue sources to serve production and people's livelihood; while striving to reduce the level of budget deficit.

In the process of building the financial plan and state budget estimate for 1987, the following requirements must be thoroughly understood by all sectors and localities:

1/ To fully mobilize the spirit of initiative and creativity of sectors, localities, and grassroots units to exploit to the fullest extent all available labor, land, equipment, materials, and capital resources to boost production, business, construction, transportation, and scientific research and technology in order to increase labor productivity, lower product costs and circulation expenses. On this basis, build the financial plan and state budget estimate for 1987 according to the principle of being proactive, realistic, and solid.

2/ Thoroughly economize on expenditures in production, construction, and consumption; use capital efficiently to achieve high economic returns. Concentrate financial and budgetary resources on key targets of the national economy such as production development and stabilizing people's livelihood.

3/ Fully grasp and strictly implement the resolutions of the Party and the Government regarding ensuring the autonomy of grassroots units in continuing socialist transformation and market management, material supply, and signing economic contracts to secure grain and agricultural products, thereby preventing sudden price increases that affect production and people's livelihood. Particularly, implement the conclusions of the Politburo meeting and decisions of the Council of Ministers in September 1986 on prices, wages, and money to serve as the basis for calculating the financial plan and budget revenues and expenditures.

4/ Improve planning work in accordance with the temporary regulations on the autonomy of grassroots economic units in the field of planning (issued together with Decision No. 76-HĐBT dated June 26, 1986 of the Council of Ministers), combining financial planning with economic planning right from the grassroots level, ensuring the establishment, protection, and consolidation of economic and financial-budgetary plans from the grassroots up..

To ensure the organization and construction of regional financial-budgetary plans, along with the construction of the national economic plan from the grassroots up and reflecting the new requirements of the financial plan and budget estimate for 1987, the Ministry of Finance highlights the following points:

I. ON THE ESTIMATE OF BUDGET REVENUES:

1/ Revenues from the state-owned economic sector:

a) State revenue: The state-owned revenue plan is based on the production and business plan indicators for 1987 in accordance with the spirit and content of Decision No. 76-HĐBT on planning and specific minimum revenue levels stipulated in Circular No. 47-TC/TQD dated February 27, 1986 and Supplemental Circular No. 21-TC/TQD dated August 21, 1986 of the Ministry of Finance.

For goods whose prices were adjusted from the end of 1986, the price adjustment difference is considered supplementary state-owned revenue and included in the state-owned revenue payment plan to the state budget.

b) Profit contribution: It is necessary to comprehensively consolidate profits generated from various sources: profits from production using state-supplied materials, self-balancing by enterprises, joint ventures and economic associations, profits from sideline production, basic and non-basic business operations... and determine the portion to be contributed to the state budget according to the profit contribution rates specified in the relevant circulars of the Ministry of Finance for each industry.

c) Price differential revenue: Based on commodity reserve planning, determine the retail commodity reserve according to the trading price in 1987, calculate all factors affecting retail prices and central-to-local price transfers, and thus establish the price differential revenue plan with a basis from the grassroots level for each budget level.

d) Basic depreciation revenue: Refer to Decision No. 507-TC/ĐTX dated July 22, 1986 of the Ministry of Finance to calculate the basic depreciation plan and refer to the ratios specified in Circular No. 10-TC/ĐTX dated July 22, 1986 to calculate the portion of basic depreciation retained by enterprises, with the remainder to be included in the state budget payment plan.

2/ Revenues from collective and individual economic sectors:

a) Business tax: Strictly implement the ordinance on business tax, integrate tax work with business transformation, market management, and through this organize the re-establishment of business households, reassessing turnover and taxes closely aligned with market prices.

b) Agricultural tax: Calculating the agricultural tax revenue plan must be based on strictly implementing the State's ordinance, checking and processing all previous years' tax arrears, accurately determining crop yields, and calculating taxes closely aligned with market prices for perennial crops and orchards, ensuring the mobilization of 10% of taxable yields.

3/ Other revenues: Proactively forecast and take measures to exploit revenue sources for the state budget.

II. ON THE ESTIMATE OF BUDGET EXPENDITURES:

1/ Expenditures for investment in basic construction:

The allocation of investment projects for basic construction in 1987 must be based on the analysis and evaluation of the investment construction work over the past five years (1981-1985) and in 1986, specifically examining the effectiveness of projects and the balance of materials, labor, and capital, focusing funds on agricultural production, consumer goods industry, and export...

All sources of basic construction funds (central government budget funds, local and grassroots self-owned funds, and credit funds) must be reflected in the balance of the sector, locality, and grassroots unit plans.

2/ Working capital: Units must base their working capital quotas on production and business plans, material and commodity inventory capacity, and the need to increase working capital turnover. The state budget will only provide working capital for newly operational units.

3/ Subsidies for production and business losses: Localities must urgently organize the restructuring of production and take measures to address the situation of production and business losses at units. The state budget will only subsidize enterprises for losses caused by national policies and must lease cost calculation bases to strictly calculate production costs and circulation fees.

4/ Price subsidies: Localities that have the conditions to control goods, cash, and manage the market well may sell at a unified price according to commercial trade and subsidize prices into salaries for cadres, workers, and employees for the six items specified by the Council of Ministers. The State will subsidize losses for the trade sector. Where there are insufficient goods, the six items must be sold at stable prices to cadres, workers, and employees and armed forces, and the State will subsidize losses for the trade sector.

Regarding the subjects, standards, and quantities, they shall still be applied according to the provisions in Circular No. 02 issued on April 15, 1986, by the Ministry of Internal Trade. Reasonable price subsidy levels for each region shall be applied according to the unified regulations of the Ministry of Finance and the Price Control Committee.

The state budget will only subsidize the price difference for goods supplied according to quotas for subjects in the administrative and public service sector, armed forces, and policy beneficiaries. The price difference subsidy for cadres, workers, and employees in the production and business sector shall be accounted for in production costs and circulation fees.

5/ Administrative and public service expenses: These must be calculated with utmost strictness and thrift, avoiding ostentation and waste, and based on the reorganization of institutions, reduction of administrative and public service staff, and their transfer to production bases. Resolutely reduce expenses related to administrative management, asset purchases, conferences, etc. Utilize existing inventory materials in units and strive to maintain or reduce expenditure levels compared to 1986.

III. ON THE PROGRESS OF ESTABLISHING AND COMBINING THE FINANCIAL PLAN AND THE 1987 BUDGET ESTIMATE:

1/ By October 25, 1986, all Ministries, General Departments, State Committees, and other agencies directly under the Council of Ministers, provinces, cities, and central special zones must compile financial plans and budget estimates and submit them to the Council of Ministers and the Ministry of Finance. The Ministry of Finance will organize discussions on the plan with Ministries and localities (the schedule will be announced later).

2/ Based on the State budget estimate decided by the National Assembly and the targets set by the Council of Ministers, the Ministry of Finance will notify specific revenue and expenditure targets for Ministries, sectors, and localities to implement from the beginning of the year. It is requested that all Ministries, General Departments, State Committees, and other agencies directly under the Council of Ministers, People's Committees of provinces, cities, and central special zones promptly direct subordinate units to closely coordinate with financial authorities at all levels to discuss and resolve specific issues to establish the financial plan and the 1987 budget estimate within the time frame mentioned above.

It is requested that all Ministries, General Departments, State Committees, and other agencies directly under the Council of Ministers, People's Committees of provinces, cities, and central special zones promptly direct subordinate units to closely coordinate with financial authorities at all levels to discuss and resolve specific issues to establish the financial plan and the 1987 budget estimate within the time frame mentioned above./.