Circular No. 38/TC-CĐTC guiding the financial management regime for lottery companies

CIRCULAROF THE MINISTRY OF FINANCE

Guidelines for implementing financial management systems for
lottery companies

Implementing Decree No. 15/CP dated March 2, 1993 of the Government on "tasks, powers, and responsibilities of state management by ministries and ministerial-level agencies," Decree No. 155/HĐBT dated October 15, 1988 of the Council of Ministers on "functions, tasks, and organizational structure of the Ministry of Finance," and laws on turnover tax and income tax adopted pursuant to Resolution No. 351/HĐBT and Decree No. 353/HĐBT dated October 2, 1990 of the Council of Ministers detailing the implementation of tax laws;

Pursuant to the Accounting and Statistics Ordinance issued by the State Council on May 20, 1988 and Decree No. 25/HĐBT dated March 18, 1989 of the Council of Ministers promulgating the Regulations on Organizational Accounting of State Agencies;

The Ministry of Finance provides guidelines for implementing a uniform financial management system applicable to all Lottery Companies nationwide as follows:

II- SUPPORT MEASURES FOR STATE-OWNED AGRICULTURAL FARMS AND FORESTRY COMPANIES IN THE FIELD OF SCIENCE AND TECHNOLOGY

1. Lottery Company (XSKT) is a state-owned enterprise operating under general state regulations.

2. Lottery Company (XSKT) is an independent accounting unit with legal personality, endowed with statutory capital by the state, having autonomy over finances, being responsible for material results of business operations, preserving and developing capital, and fulfilling all obligations to pay state budget according to the law.

3. Lottery Company (XSKT) implements state financial systems, common regulations for state-owned enterprises, and specific guidelines set forth in this Circular.

II- SOME SPECIFIC PROVISIONS

1. State Capital and Responsibility for Preservation:

a) State capital allocated for use and preservation by Lottery Companies:

Budget capital includes: fixed assets, working capital, construction investment capital, and other sources of capital from the budget or originating from the state budget (such as price differences in goods and materials and amounts due to the budget but retained by the budget).

Self-supplemented capital includes: fixed assets, working capital, construction investment capital formed from retained profits and business development funds.

b) Responsibilities for preservation and development of capital:

All state budget capital and self-supplemented capital from after the date of allocation must be combined into the current capital of the company and preserved.

The company has autonomy in using, replacing, and modernizing fixed assets as stipulated for state-owned enterprises.

Annually, the Lottery Company reports to the supervising authority for verification and determination of the capital amount to be preserved as of December 31, which serves as the basis for checking preservation levels for the following year. The assessment of preservation and development levels of current capital of Lottery Companies is carried out according to the documents of the Ministry of Finance guiding the preservation and development system for state-owned enterprises.

2. Revenue of Lottery Companies:

Revenue from selling lottery tickets.

Ancillary business revenue.

Other financial service revenues.

3. Expenditures of Lottery Companies:

a) Payment for prize-winning tickets not exceeding 50% of ticket sales revenue.

b) Issuance expenses:

Commission payments to agents shall be made in accordance with current state regulations and guidance documents of the Ministry of Finance, specifically for plains provinces and cities up to a maximum of 13%, mountainous provinces and the Central Highlands up to 15% of ticket sales revenue.

Printing costs for lottery tickets.

Costs for publicity, advertising, and announcing draw results.

Costs for conducting draws.

Transportation costs.

Wages:

Based on the state's decision regarding wage scales for state-owned enterprises, units calculate wage rates according to the guidelines and submit to the competent authority for approval. Wage payments are based on business performance results.

Social insurance and health care contributions.

Costs for labor protective equipment for those entitled to such equipment according to state decisions.

Travel expenses as prescribed by the State.

Depreciation of fixed assets according to Decision No. 507-TC/ĐTXD dated July 22, 1986 and subsequent guidance documents of the Ministry of Finance.

Regular maintenance costs for fixed assets.

Costs for necessary tools for business activities.

Administrative management costs.

Costs for preservation and development of capital.

Other reasonable expenditures arising from business needs.

Ancillary business expenses (if any).

Lottery Companies must fully and accurately account for expenditures in accordance with prescribed regulations. Total issuance costs (including agent commissions) of the company must not exceed 18% of ticket sales revenue for plains provinces and cities, and not more than 22% for mountainous and Central Highland provinces.

Encouragement is given to companies that save on issuance costs below the control limit mentioned above. Quarterly (after paying turnover taxes as required by current regulations), Lottery Companies may use savings on issuance costs to supplement their business development fund.

4. Agent credit period: Implement the provisions of the Ministry of Finance, agent collateral must ensure at least 70% of the allowed credit period.

5. Obligation to pay the State Budget of Lottery Companies:

The company must comply with laws on turnover tax, income tax, usage of state budget capital, property tax, business license tax, and other payments as prescribed by state regulations.

6. Profit distribution and establishment of funds:

a) Retained profit of Lottery Companies is determined as follows:

b) Retained profit is distributed as follows:

Establishment of three funds:

Amount of retained profit (after deducting any fines if applicable)

The company establishes three funds (business development fund, reward fund, welfare fund) in accordance with current state regulations and the guidelines in this Circular.

c) Use of the three funds:

Reward and welfare funds are implemented according to current state regulations like other enterprises.

Business Development Fund:

Construction, renovation, and expansion of workplace facilities.

Supplementing working capital for lottery activity development approved by the supervising authority.

Purchasing equipment such as lottery number drawing devices, communication tools, computers for managing issuance, financial management, and other necessary means.

In case of sudden incidents such as fire or natural disasters like storms and floods, the Lottery Company shall report to the supervising authority and relevant agencies to conduct inspections and determine the extent of damage in writing. The unit shall settle accounts if the loss is under fifty million dong, which must be approved by the supervising authority; if the loss exceeds fifty million dong, it must be approved by the Provincial People's Committee, and the company may draw from the business development fund to cover the approved losses.

Training and enhancing the professional skills of staff, workers, and officials.

Strictly prohibit the use of the business development fund for purposes of rewards and benefits.

Specifically, for the Lottery Company which has made many efforts but faces significant difficulties in lottery operations, after tax payment, there is no profit left to establish three funds or the remaining amount is too small, the company shall report to the Department of Finance and Prices and the Provincial People's Committee for consideration, and may draw from the local budget a certain amount to support the company, with the level of extraction decided by the Provincial People's Committee to ensure harmony among enterprises in the province.

For newly established Lottery Companies without adequate facilities or facing significant facility difficulties, the Lottery Company shall report to the Department of Finance and the Provincial People's Committee to implement necessary initial assistance measures to ensure that these companies have conditions for development.

III- REGIME FOR ESTABLISHING AND REPORTING IMPLEMENTATION
FINANCIAL PLAN

The Lottery Company shall submit financial plans and implementation reports in accordance with the Accounting and Statistics Ordinance of the State, the provisions of Circular No. 27-TC/CĐKT dated July 17, 1990, and subsequent regulations issued by the Ministry of Finance.

Quarterly, no later than the 15th to 20th day of the first month of each quarter, the company shall submit a report on the implementation of the previous quarter's plan to the Ministry of Finance.

The annual final account report must be completed and approved by the supervising authority and submitted to the Ministry of Finance no later than March 31 of the following year.

The annual final account must fully and clearly reflect the financial results of the year, while also reflecting the situation of fulfilling the obligation to pay state budget according to the law.

The annual final account report includes the implementation report of the approved financial plan, along with a report on the actual situation of the enterprise and the balance sheet, and the company's asset summary table.

VI- IMPLEMENTATION

The Lottery Company is responsible under the law for effectively using state assets and capital, preserving and developing capital, and fulfilling the obligation to pay state budget according to the law.

The company is subject to inspection and audit by state financial authorities according to the Tax Law, Accounting and Statistics Ordinance, and Audit Ordinance.

This Circular takes effect from the date of signature. Previous regulations contrary to this Circular are abolished.

During implementation, if there are any issues, please report to the Ministry of Finance for timely supplementation and amendment./.