JOINT CIRCULAR No. 36-TC-NL/TTLB of the Ministry of Finance and the Ministry of Energy guiding the implementation of budget payments and certain financial measures for the electricity sector in 1992.

JOINT CIRCULAR

Guidelines for Implementing Budget Payments and Certain Financial Measures in 1992 for the Electricity Industry

year 1992 for the electricity sector

Pursuant to Circular No. 94-TB dated July 4, 1992 of the Office of the Council of Ministers regarding "the conclusions of Vice Chairman Phan Van Khai on the 1992 financial plan of the electricity industry."

To implement correctly the Tax Laws and current collection regulations, while creating conditions for the electricity industry to fulfill its production and business plans, budget payments to the State Treasury, and investment capital for construction and development in 1992, the Ministry of Finance and the Ministry of Energy hereby unify guidelines for implementing budget payments and certain financial measures in 1992 for the electricity industry as follows:

1. Regarding turnover tax: Directly affiliated electricity enterprises shall declare and pay turnover tax to the State Treasury at their locations - the turnover tax rate for commercial goods is 8%. The revenue from electricity sales for calculating and paying turnover tax and the procedures for payment shall be implemented according to Circular No. 294 TC/TCT dated March 11, 1991 of the Ministry of Finance regarding the implementation of the Turnover Tax Law for electricity and coal.

In areas where progressive electricity pricing is applied, the revenue from electricity sales for calculating turnover tax includes all progressive electricity revenue. In all cases, units must pay the correct amount of turnover tax.

2. Revenue from water resource taxes used for hydropower production.

Electricity companies have the responsibility to accurately calculate and promptly pay the water resource tax used for hydropower production on behalf of hydropower plants according to Circular No. 766 TC/TCT dated June 11, 1991 of the Ministry of Finance regarding the water resource tax for water used in hydropower production. Electricity companies have the responsibility to notify the tax authorities at the location of the hydropower plant of the water resource tax paid on their behalf, along with copies of the payment receipts, for monitoring the results of State Treasury payments.

3. Revenue from the use of state budget funds.

Electricity companies must calculate the revenue from the use of state budget funds according to the table of revenue from the use of state budget funds issued together with Circular No. 13 TC/TCT dated February 23, 1991 of the Ministry of Finance.

- Electricity Company I must pay the entire revenue from the use of state budget funds into the State Treasury (by recording the use of state budget funds by Electricity Company I and recording expenditures for price subsidies to Electricity Company III).

- Electricity Companies II and III are temporarily exempted from paying the revenue from the use of state budget funds in 1992.

Based on the final accounts of each company in 1992, the Ministry of Finance will consider and decide on the reduction or exemption of the formal revenue from the use of state budget funds for each company.

4. Handling the results of profits and losses in 1992.

- Electricity Company I has advantages and hydropower water resources, thus generating some excess profit (land rent differential). This excess profit is determined as the planned profit for 1992; Electricity Company I must pay the entire amount into the State Treasury (recorded under profit) as a source for price subsidies to Electricity Companies III and II.

The profit generated from efforts to reduce costs is determined as realized profit, after paying corporate income tax, the company can establish reserves according to regulations.

- After being temporarily exempted from paying the revenue from the use of state budget funds, the remaining loss of Electricity Companies II and III due to objective reasons will be subsidized by the Ministry of Finance in the form of price subsidies.

The source of price subsidies for Electricity Companies II and III is the excess profit and revenue from the use of state budget funds paid by Electricity Company I into the State Treasury and resolved through monthly records of income and expenditure through the State Treasury. In principle, the Ministry of Finance will not provide subsidies exceeding the amounts submitted by Electricity Company I.

5. Deduction and handling of capital for construction and development projects.

a. Deduction for Construction and Development Capital: To ensure balanced sources of capital for construction and development projects for the electricity industry according to the 1992 plan; the electricity industry implements the deduction and payment of the full basic depreciation according to the plan assigned by the Council of Ministers to the Ministry of Energy in Decision No. 180/HĐBT dated May 25, 1992, the basic depreciation that the electricity industry must pay is 859 billion VND.

Units in the electricity industry deduct basic depreciation according to Circular No. 59 TC/CN dated December 5, 1990 and Decision No. 507 TC/ĐTXD dated July 22, 1985 of the Ministry of Finance; the value of fixed assets for determining basic depreciation is the original cost of fixed assets already calculated for capital preservation according to current regulations.

The amount of basic depreciation deducted into production costs, if lower than the amount required by the plan, the Ministry of Energy will assign to each electricity company, which will then record the additional amount in the final accounts of the entire company.

b. Implementation of deduction and provision of capital for construction and development projects from the deduction.

- In the first six months of the year, the basic depreciation deducted from fixed assets funded by the state budget, electricity companies have deducted and actually spent on construction and development projects listed in the state budget capital plan can be recorded as income and expenditure through the state treasury; the remaining amount not yet spent must be fully paid into the state treasury; electricity companies must follow the procedures specified in Circular No. 944TC/ĐT dated May 28, 1992 of the Ministry of Finance and Circular No. 645 TC/TCT/NV2 dated June 23, 1992 of the General Department of Taxation to complete the income and expenditure recording procedures in a timely manner.

From July 1, 1992, electricity companies must pay 100% of the basic depreciation deducted from fixed assets funded by the state budget into the National Treasury - the Ministry of Finance will provide the capital for construction and development projects for the electricity industry in 1992.

6. Deduction and use of capital for major repairs.

The deduction and use of capital for major repairs must be in accordance with the purpose and regulations stipulated in Circular No. 33 TC/CN dated July 31, 1990 of the Ministry of Finance regarding the system of depreciation of fixed assets. Based on the need for major repairs of fixed assets in 1992, the electricity industry determines the deduction for major repairs according to actual reasonable costs into product costs. The difference between the deduction for major repairs and the actual reasonable expenses is recorded as a reduction or increase in the product cost of electricity in 1992.

7. Implementation organization.

Based on the above provisions and guidelines, it is requested:

- Electricity companies instruct provincial electricity departments and subordinate units to promptly pay turnover tax and other types of taxes and revenues into the State Treasury.

- For the provisions regarding the recording of revenue for Electricity Company I and the recording of subsidies (loss compensation) for Electricity Companies II and III, the units need to report to the two Ministries for examination and promptly complete the necessary procedures for recording revenue and expenditure for the first six months of 1992.

Starting from the third quarter of 1992, the Ministry of Energy will calculate and specifically determine the amounts for recording revenue and expenditure for each company, coordinating with the Ministry of Finance to resolve them.

The Tax Departments shall inspect the implementation of tax calculation and payment, revenues at each company, and the Power Departments according to the established regulations and the above provisions.

During the implementation process, if any difficulties arise, it is recommended that units within the electricity sector, finance, and tax departments promptly reflect these issues to the two Ministries for study and resolution./.