Circular No. 34/2008/TT-BTC guides the implementation of saving 10% of regular budget expenditures for the year 2008 to curb inflation.

CIRCULAR

Guidelines for Implementing a 10% Reduction in Regular Expenditures from the State Budget in 2008 to Contain Inflation

Pursuant to Decree No. 77/2003/NĐ-CP dated July 1, 2003 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Finance;

Pursuant to Decision No. 1569/QĐ-TTg dated November 19, 2007 of the Prime Minister on the allocation of the state budget for 2008;

Pursuant to Decision No. 390/QĐ-TTg dated April 17, 2008 of the Prime Minister on managing the investment plan for construction projects and state budget expenditures in 2008 to serve the goal of containing inflation;

The Ministry of Finance hereby provides guidelines for implementing the allocation and execution of a 10% reduction in regular expenditures from the state budget in 2008 to contain inflation as follows:

A. GENERAL PROVISIONS:

1. Subjects Implementing the Reduction:

Ministries, agencies at the level of ministries, government agencies, other central-level agencies, People's Committees at all levels in localities, and agencies and units that have been allocated the regular expenditure budget of the state for 2008 by competent authorities.

2. Scope of the Reduction:

- Implement a 10% reduction in the regular expenditure budget of the state for 2008 already allocated at the beginning of the year (hereinafter referred to as a 10% reduction in regular expenditures), excluding: budgets for operating expenses of national target programs, Program 135, and subsidies for price and fare support; certain mandatory expenditures under current regulations as specified in Clause 1, Article 1 of Decision No. 390/QĐ-TTg dated April 17, 2008 of the Prime Minister.

- Based on the 10% reduction targets set by the Minister of Finance, the Ministers, heads of agencies at the level of ministries, government agencies, other central-level agencies, chairpersons of provincial and centrally-administered city People's Committees shall implement the allocation of detailed 10% reduction targets for regular expenditures according to each spending area for subordinate agencies and units and lower-level budgets for implementation, including administrative units that have been granted self-management mechanisms and responsibility for personnel establishment and administrative management costs under Decree No. 130/2005/NĐ-CP dated October 17, 2005 of the Government, public service units that have been granted authority and responsibility for their operations, organizational structures, staffing, and finances under Decree No. 43/2006/NĐ-CP dated April 25, 2006 or Decree No. 115/2005/NĐ-CP dated September 5, 2005 of the Government.

3. Utilization of Savings Funds:

Savings funds belonging to which level of budget shall be retained at that level to supplement the centralized contingency reserve fund for handling social security tasks, disaster prevention and control, disease prevention and treatment, and urgent tasks outside the allocated budget, and reduce the budget deficit (for savings from the central budget).

B. SPECIFIC PROVISIONS:

1. Principles for Determining and Allocating the 10% Reduction Targets for Regular Expenditures:

The regular expenditure budget of the state for 2008 to calculate the 10% reduction as prescribed in this Circular is the regular expenditure budget for 2008 already allocated but not yet utilized, minus certain mandatory expenditures under current regulations.

To simplify the determination and allocation of the 10% reduction targets for regular expenditures to subordinate agencies, units, and lower-level budgets, the Ministry of Finance guides the calculation by averaging the regular expenditure budget (after excluding non-reduction items) into 12 parts (corresponding to 12 months in a year) then multiplying by 8 (corresponding to the last 8 months of the year), followed by calculating the 10% reduction.

The specific formula is as follows:

The amount of the 10% reduction in regular expenditures for 2008 = {(A-(B+C+D+E+F)) x 8/12} x 10%

Where:

A is the regular expenditure budget for 2008 already allocated by the competent authority (excluding the operating expense budget for national target programs, Program 135, and subsidies for price and fare support).

B is the total salary, allowances with the nature of salary, wages, and other payments for personnel according to regulations.

C is the 10% reduction in regular expenditures to create a source for salary reform according to the annual plan.

D is the total payment for annual premiums, matching funds, and contributions to international organizations (if applicable).

E is the total expenditure for Vietnamese representative offices abroad (if applicable).

F is the total of special expenditures that cannot be reduced (if applicable).

2. Method for Allocating the 10% Reduction Targets for Regular Expenditures:

Based on the 10% reduction targets for regular expenditures allocated by the Minister of Finance:

- The Ministers, heads of agencies at the level of ministries, government agencies, and other central-level agencies shall determine the 10% reduction in regular expenditures according to the principles outlined in Clause 1, Section B of this Circular and allocate detailed reduction targets for each spending area to subordinate budgetary agencies and units for implementation.

- Chairpersons of provincial and centrally-administered city People's Committees shall determine the 10% reduction in regular expenditures according to the principles outlined in Clause 1, Section B of this Circular and allocate detailed 10% reduction targets for regular expenditures for each spending area to subordinate agencies and units and provincial budgets; instruct district People's Committees to allocate the 10% reduction targets for regular expenditures to subordinate agencies and units and village budgets based on the approved budget and allocations by the People's Council and People's Committee.

- Decisions allocating reduction targets to budgetary units shall be simultaneously sent to the State Treasury where transactions are conducted for implementation and monitoring.

3. Tasks Required of Agencies and Units Benefiting from the Budget to Implement the Reduction:

To ensure the completion of assigned professional tasks at the beginning of the year under the condition of implementing a 10% reduction in regular expenditures as decided by the Prime Minister and stipulated in this Circular, it is requested that Ministries, ministerial-level agencies, agencies under the Government, other central agencies, and People's Committees at all levels direct subordinate agencies, units, and lower-level budgets to review and adjust the regular expenditure tasks assigned at the beginning of the year, focusing on the following actions:

- Temporarily suspend the purchase of cars, means of transportation, and other valuable assets; major repairs of office premises.

- Minimize expenses for conferences, seminars, festivals, summaries, reviews, award ceremonies for medals and commendations, anniversaries, and domestic and international working delegations funded by the state budget.

- Maximize savings in electricity, water, telephone, office supplies, and fuel consumption (at least 10%).

- Cease funding for non-urgent tasks and unnecessary content.

4. Inspection and Control:

The State Treasury shall base on the decision allocating the 10% reduction target in regular state budget expenditures for 2008 issued by Ministers, heads of ministerial-level agencies, agencies under the Government, other central agencies, and Chairpersons of People's Committees at all local levels to record the reduced budget estimates for each agency and unit; implement control over regular state budget expenditures for 2008 according to current laws.

Financial management agencies of Ministries, ministerial-level agencies, agencies under the Government, other central agencies, and local authorities shall guide, inspect, and control the implementation of savings in regular expenditures by agencies and units under their jurisdiction.

5. Utilization of the 10% Savings in Regular Expenditures:

- For the 10% savings in regular expenditures of Ministries, ministerial-level agencies, agencies under the Government, and other central agencies: The Ministry of Finance will aggregate and report to the Government to submit to the Standing Committee of the National Assembly for using these savings to supplement the central government budget reserve for social welfare expenditures, disaster prevention and mitigation, disease control, and urgent and important tasks outside the approved budget, with the remainder used to reduce the state budget deficit.

- For the 10% savings in regular expenditures of local agencies and units: Financial agencies at each level of budget shall be responsible for aggregating and reporting to the People's Committee to submit to the Standing Committee of the People's Council at the same level (for commune level, coordinate with the Chairman and Vice-Chairman of the Commune People's Council) for using these savings to supplement the budget reserve at their level for social welfare expenditures, disaster prevention and mitigation, disease control, and urgent and important tasks outside the approved budget.

C. IMPLEMENTATION:

1. This Circular takes effect 15 days from the date of publication in the Official Gazette.

2. Ministers of Ministries, heads of ministerial-level agencies, agencies under the Government, other central agencies, and Chairpersons of Provincial and Municipal People's Committees directly affiliated with the Central Government shall organize the allocation of the 10% savings targets to subordinate agencies, units, and lower-level budgets; bear responsibility for organizing implementation and reporting to the Ministry of Finance detailed results of the 10% savings in regular expenditures by category, and the results of reviewing and adjusting regular expenditure tasks as specified in Point 3, Section B of this Circular. The deadline for submitting reports to the Ministry of Finance is no later than May 20, 2008, to allow timely aggregation and reporting to the Prime Minister before May 30, 2008.

3. Agencies and units allocated stable funding according to separate decisions of the Prime Minister (State Bank, Social Insurance, Vietnam Television) shall organize the allocation and implementation of the 10% savings in regular expenditures for subordinate agencies and units according to the guidance in Points 1 and 3, Section B of this Circular; report the results of savings implementation to the Ministry of Finance for aggregation and reporting to the Prime Minister according to the work items specified in Point 2, Section C of this Circular; simultaneously remit the saved funds into the central budget for the tasks specified in Point 5, Section B of this Circular.

Any difficulties encountered during implementation should be reported to the Ministry of Finance for prompt resolution./.