Joint Circular No. 47-TT/LB provides detailed guidance on implementing Decree No. 112-HÐBT dated August 25, 1984, concerning the collection of irrigation fees.

CIRCULAR

JOINT MINISTRY OF WATER RESOURCES AND FINANCE DECREE NO. 47-TT/LB ON November 2, 1984 GUIDING THE IMPLEMENTATION OF GOVERNMENT DECREE NO. 112-HĐBT
ON August 25, 1984 REGARDING THE COLLECTION OF WATER UTILIZATION FEES
The Joint Ministry of Water Resources and Finance guides the implementation of Government Decree No. 112-HĐBT on the collection of water utilization fees as follows:

I. COLLECTION OF WATER UTILIZATION FEES

All organizations and individuals including cooperatives, agricultural production groups, state-owned economic organizations, state agencies, and individual farmers who benefit from the use of water and other services provided by irrigation works managed by the State must pay water utilization fees starting from the time they begin to benefit.

1. Objects of CollectionThose benefiting from irrigation works constructed by the people or jointly by the people and the State but managed by the State shall pay water utilization fees at 50% to 70% of the rate specified in Point 2 below for the first five years. If the revenue collected is insufficient to cover the management and operation costs of such irrigation works, the Provincial People's Committee shall decide on a higher rate. In subsequent years, full payment at 100% of the rate shall be made. Areas benefiting from irrigation works managed by water users themselves (including works built by the State located within the territory of a cooperative that has been entrusted with management by the cooperative) but not using water from the State-managed irrigation system shall not be subject to water utilization fees. If water from State-managed irrigation works is used, water utilization fees shall be charged according to the rate set for revenue generation.

For mountainous highland communes, new settlement areas of ethnic minorities, and border communes adjacent to China, water utilization fees shall not be collected temporarily. The period during which no fees are collected shall be determined by the Provincial People's Committee, and all management and operation costs of the irrigation system shall be covered by the local budget (provincial or district level) allocated to the irrigation enterprise.

II. RATES FOR WATER UTILIZATION FEES

Efforts should be made to ensure sufficient revenue to cover management and operation costs throughout the province under normal weather conditions. Based on the principles stipulated in Article 2 and the collection ratio prescribed in Article 5 of the Decree, the Provincial People's Committee shall determine the collection ratio and rates applicable to each region, but the minimum ratio shall not be lower than the prescribed limit. If the maximum collection ratio has been reached but still does not cover the management and operation costs of local irrigation enterprises, permission from the Council of Ministers to increase the ratio is required. Until such permission is granted, if the provincial irrigation fund is insufficient to cover the costs, the local budget shall provide supplementary funding to ensure the management and operation expenses of the irrigation enterprise.

The basic rate shall be determined based on the average yield over the three-year period from 1981 to 1983 (not less than the agricultural tax yield) for each region, equivalent to the amount of rice for one hectare of land that can be irrigated and drained actively. This rate will remain stable for a certain period and serve as the basis for determining rates for various areas that can be partially irrigated and drained actively, areas that generate sources, etc.

An area that can be actively irrigated and drained is defined as an area where water is directly supplied to the field surface or drained from the field surface by the irrigation work, ensuring the requirements of crop growth and production without significant drought or flooding affecting crop yields. In cases where power supply or water supply from the main irrigation work is temporarily difficult, and households need to pump or drain additional times (less than one-third of the number of irrigations and drainage operations recorded in the contract), it is still considered an area that can be actively irrigated and drained. - An area that can be partially actively irrigated and drained is an area where water is supplied to or drained from the field surface by the irrigation work but remains irregular, requiring households to pump or drain more than one-third of the number of irrigations and drainage operations according to the procedure, and the water utilization fee shall be charged at 70% to 80% of the basic rate. - An area that generates sources is an area where households must pump or drain water from State-managed irrigation works onto the field surface or pump or drain water from the field surface into State-managed irrigation works. Areas irrigated and drained from natural canal water that the State still needs to dredge and areas protected from saltwater intrusion or drained of acid water are also considered source-generating areas, and the fee shall be charged at 50% to 70% of the basic rate.

In special cases in mountainous, midland, and coastal regions, if an area only requires irrigation without drainage or vice versa, the fee shall be charged at 50% to 60% of the basic rate.

For gravity-fed irrigation and electrically-powered drainage, the fee shall be charged according to the rate specified in Item B, Article 5 of Government Decree No. 112-HĐBT dated March 25, 1984.

For areas dedicated to sowing but not transplanting rice, the fee shall be charged at 30% to 50% of the prescribed rate for rice.

The rate for water utilization fees related to aquaculture business on the irrigation system shall be equivalent to 5 to 10 kilograms of rice per hectare per year based on the average area used (for reservoirs, this is the area corresponding to the normal water level plus half the area corresponding to the dead water level).

The rate for water utilization fees related to transportation services on the irrigation system shall be determined based on the transport capacity (regardless of whether goods are being carried). It shall be equivalent to the following amounts of rice:

Boats and barges with a carrying capacity of less than 3 tons shall be charged equivalent to 5 kilograms of rice.

Boats and barges with a carrying capacity of 3 to 10 tons shall be charged equivalent to 10 kilograms of rice.

Boats and barges with a carrying capacity of 11 to 20 tons shall be charged equivalent to 15 kilograms of rice.

Boats and barges with a carrying capacity of 21 to 40 tons shall be charged equivalent to 20 kilograms of rice.

Boats and barges with a carrying capacity of 41 to 60 tons shall be charged equivalent to 25 kilograms of rice.

Boats and barges with a carrying capacity exceeding 60 tons shall be charged equivalent to 30 kilograms of rice.

Wooden, bamboo, and reed rafts measuring 1 meter in length shall be charged equivalent to 1 kilogram of rice.

Rafts specifically designed to carry raw materials, fuels, and other supplies shall be charged equivalent to 2 kilograms of rice per meter in length.

For state-owned and collective means of transport used exclusively for agricultural production purposes, the charge shall be based on the directive price. Additionally, charges shall be based on the agreed price as stipulated by the Provincial People's Committee.

In addition to the rates specified in Articles 5, 6, 7, and 8 of Government Decree No. 112-HĐBT dated August 25, 1984, the Provincial People's Committee may establish water utilization fee rates for other beneficiaries of State-managed irrigation works if deemed necessary.

Wooden raft, bamboo raft, reed raft 1 meter² is equivalent to the collection of 1 kilogram of rice.

For rafts transporting various types of raw materials, every 1 meter² is equivalent to the collection of 2 kilograms of rice.

As for state-owned means of transport and collective means of transport carrying materials to serve agricultural production, they shall be calculated according to the directed price. Otherwise, they must be calculated according to the agreed price stipulated by the Provincial People's Committee.

In addition to the collection rates prescribed in Articles 5, 6, 7, and 8 of Decree No. 112-HĐBT dated August 25, 1984, if the Provincial People's Committee deems it necessary, it may stipulate the collection rates for water conservancy fees for other beneficiaries from state-managed waterworks.

In addition to paying water management fees to irrigation enterprises, households using water must also contribute labor for the repair, maintenance, and construction of irrigation works according to regulations.

Irrigation enterprises must allocate an appropriate proportion of the collected water management fees for regular repairs and maintenance to maintain the capacity of irrigation works (this amount must be reflected in the enterprise's production cost plan).

II. ESTABLISHING PLANS FOR THE COLLECTION, PAYMENT AND
SETTLEMENT OF WATER MANAGEMENT FEES

1. Establishing plans for collecting water management fees:

a. Signing irrigation and drainage contracts and collecting water management fees.

Irrigation enterprises must sign annual and seasonal irrigation and drainage contracts with households using water. The contract must clearly specify the irrigated area, irrigation methods, standards, quotas, quality, and time for irrigation and drainage, the amount of water management fees to be paid, reward and penalty provisions, and settlement procedures. If a household requests to improve the quality of irrigation and drainage to increase yield and pay corresponding water management fees, the irrigation enterprise will sign a contract at a higher level.

b. Consolidating, reviewing, and allocating targets for the collection of water management fees:

Based on the signed contracts with households using water, irrigation enterprises must consolidate their own plans for collecting water management fees. The collection plan must clearly state the irrigated area, unit price, payment levels in kind and in cash, including stable payment levels and higher registered payment levels, the collection time for each season, and report to the Water Resources Department and the Finance Department.

The Water Resources Department and the Finance Department review and consolidate the plans for collecting water management fees from irrigation enterprises within the province, distribute them by county, and report to the Provincial People's Committee and the Ministry of Water Resources.

The Provincial People's Committee assigns the water management fee collection plan in kind to the County People's Committees, which are included in the total mobilization quota of food in the entire county. The county assigns the plan to communes, cooperatives, production groups... simultaneously with the agricultural tax collection plan and food purchase plan.

2. Organizing collection, payment, and settlement:

Based on the results of final acceptance and evaluation of contract implementation, irrigation enterprises establish a water management fee collection book and report it to the County People's Committee. The water management fee collection book must clearly state the name of the water user unit, the amount of water management fees payable in kind and in cash, including the amount collected under high-level registered irrigation and drainage contracts (if applicable) and the outstanding water management fees from previous years. The County People's Committee approves the water management fee collection book and officially hands it over to communes, cooperatives, agricultural production groups, and related sectors in the county. After each harvest, households using water must directly, fully, and promptly hand over the water management fee collection book in kind along with the agricultural tax and food purchase to the food sector. Within fifteen days of receiving the food, the food sector must settle the money to the irrigation enterprise at the directed price. For additional food received due to increased collection from high-level registered contracts, the food sector will settle at the encouraged price (procedures to be guided separately).

Irrigation enterprises must closely monitor the collection of water management fees, urge households using water to timely and fully submit the required water management fees, and request the food sector to promptly settle payments.

Any water management fees permitted to be collected in cash, irrigation enterprises directly collect from households using water.

Irrigation enterprises managing branches of inter-provincial or inter-county irrigation systems must allocate a portion of their income to pay the enterprise managing the main works according to the signed contracts. The allocation rate is based on ensuring the operating costs of the enterprise managing the main works distributed across the benefiting area, proposed by the system management council and decided by the competent authority on a stable payment level for a certain period.

III. INCENTIVES, PENALTIES, AND WAIVERS OF WATER MANAGEMENT FEES

1. Incentives and penalties:

At the end of each irrigation and drainage season, irrigation enterprises must base on the results of periodic inspections of irrigation and drainage to jointly inspect and evaluate the contract performance with households using water.

- If favorable weather conditions result in fewer irrigation and drainage sessions than stipulated in the contract without affecting the production efficiency of water users, or if due to objective reasons some irrigation and drainage sessions do not meet requirements but do not exceed one-third of the stipulated sessions, it is still considered contract fulfillment and water management fees will be settled as agreed.

- If the number of irrigation and drainage sessions does not meet requirements exceeds one-third of the stipulated sessions in the contract, water management fees will be settled at 85% of the stipulated level in the contract.

- If the number of irrigation and drainage sessions does not meet requirements exceeds two-thirds of the stipulated sessions in the contract, water management fees will be collected at 70% of the stipulated level in the contract.

2. Waivers:

Article 10 of Decree No. 112-HĐBT dated August 25, 1984 stipulates that the extent of tax exemption and reduction for agricultural production losses shall be determined based on an assessment of the loss in output. The People's Committee of the district shall propose to the People's Committee of the province to make the decision. If the income of the enterprise is insufficient to cover the minimum expenses due to exemptions and reductions, it shall be compensated from the reserve fund or the portion of the provincial irrigation fund collected through redistribution. If this is still insufficient, the provincial irrigation fund may temporarily borrow from other parts (depreciation of basic assets, major repair depreciation), but must repay in subsequent years. If it remains insufficient, the local budget (province, district) shall provide special subsidies to the irrigation enterprises.

IV. MANAGEMENT AND USE OF THE RESERVE FUND

Irrigation enterprises are permitted to establish a reserve fund to offset increased costs during years of natural disasters.

1. Sources of Establishment:

The source for establishing the reserve fund is the difference between actual reasonable expenditures lower than approved expenditures. This difference (if any) shall be allocated:

- 50% to supplement the reward and welfare funds.

- 50% transferred into the reserve fund held in a separate account at the bank.

2. Use of the Reserve Fund

In years when weather conditions are more difficult than normal (as directed by the Ministry of Water Resources), if there are increased costs exceeding approved expenditures and these are reviewed and approved by the competent authority, the enterprise may draw from the reserve fund to offset the approved differences. If the reserve fund and the provincial irrigation fund subsidy are still insufficient, the local budget may temporarily advance funds and deduct them from the reserve fund of subsequent years.

V. MANAGEMENT AND USE OF THE PROVINCIAL IRRIGATION FUND

Provinces and cities are allowed to establish a provincial irrigation fund directly managed by the Provincial People's Committee (Department of Finance).

1. Sources of Establishment Include the Following:

- Depreciation of fixed assets put into use (excluding large pumps with a flow rate of 8,000 m³/h or higher and earth structures not subject to basic depreciation).³/hour and construction works made of earth without basic depreciation).

- Depreciation of fixed assets for major repairs.

- Redistribution revenue from irrigation enterprises operating under favorable objective conditions.

- Water management fees collected from areas benefiting from water usage from irrigation works under construction and partially operational for irrigation and drainage, but not yet managed by irrigation enterprises, organized and submitted by the Provincial or District People's Committees, with 50% deposited into the provincial irrigation fund and 50% supplemented into the district budget.

2. Regulations on the Use of the Irrigation Fund:

The irrigation fund aims to create conditions for the province to have capital to use for:

- Major repairs and modernization of machinery and equipment.

- Major repairs of earth structures.

- Support for enterprises facing difficult objective conditions where revenues do not meet approved expenditure needs.

- Reserves for particularly severe disaster years (dam breaches, large-scale structure collapses requiring immediate repair to maintain operations) where revenues and enterprise reserve funds are insufficient.

- In cases where modernization of machinery and equipment or major repairs of structures are required while the provincial irrigation fund has not yet accumulated sufficient capital, the local budget may temporarily advance funds (to be recovered in subsequent years).

- In cases of major disasters causing extensive damage to structures or requiring major repairs of severely damaged structures due to long-term neglect or excessive channel dredging beyond the designed cross-section, if the provincial irrigation fund has not accumulated sufficient capital, the local or central government may allocate funds from the construction investment budget according to the approved construction plan.

Annually, the Department of Water Resources reviews and aggregates the needs for expenditures from the irrigation fund to submit to the Provincial People's Committee for approval.

To facilitate proactive management by enterprises needing to use the irrigation fund as approved by the Provincial People's Committee, the Department of Water Resources and the Department of Finance may allow irrigation enterprises to retain the amount they are required to pay into the provincial irrigation fund according to their plans, to spend on their own enterprises according to the approved irrigation fund expenditure plan. Enterprises only need to pay (or receive additional funding if needed) the difference between the amount required to be paid and the amount spent.

After using the funds for the above purposes and setting aside necessary reserves, the Provincial People's Committee may mobilize remaining funds for the completion, improvement, and expansion of irrigation works within the province. The irrigation fund shall not be used for other purposes.

VI. IMPLEMENTATION PROVISIONS

To ensure the maintenance and effective operation of irrigation works through fair and reasonable contributions from water users, and to enable irrigation enterprises to conduct economic accounting, improve irrigation and drainage quality, and better serve agricultural production, the Provincial People's Committee must strictly direct the collection of water management fees. Those who intentionally evade payment of water management fees, such as misrepresenting categories, concealing benefited areas, or delaying settlement of water management fees, must be dealt with appropriately.

The District People's Committee must strictly direct the signing of irrigation and drainage contracts and the acceptance of results between irrigation enterprises and water users. They must urge cooperatives, production groups, and individual water users to fully and timely settle water management fees. Irrigation enterprises must organize repairs and protection of works, distributing water to fields according to signed contracts.

Cooperatives, production groups, and individual water users are responsible for constructing and repairing irrigation works in their areas to prevent water leakage and waste; organizing dedicated irrigation teams to protect works in their areas, guiding water into fields, and accepting the results of each irrigation cycle with the irrigation company as a basis for overall acceptance and evaluation of contract performance.

Local levels and sectors need to quickly implement the new regulations on water management fee collection to ensure good collection from the 1984 crop season as stipulated in Decree No. 112-HĐBT dated August 25, 1984, avoiding arbitrary and unreasonable regulations at local levels.

Each Ministry, within its functions and powers, shall provide specific guidance.

During implementation, if any difficulties arise, they should be promptly reported to the Ministry of Water Resources and the Ministry of Finance for joint examination and resolution.