Circular No. 483/TC/NSNN on the payment of additional salary for the year 2003

CIRCULAR

OF THE MINISTRY OF FINANCE NUMBER 16/2003/TT-BTC DATED MARCH 14, 2003 GUIDING THE SOURCES FOR IMPLEMENTING THE ADJUSTMENT OF WAGES AND SOCIAL ALLOWANCES IN 2003

Pursuant to Resolution No. 09/2002/QH11 dated November 28, 2002 of the National Assembly, Session 2, of the Eleventh Legislature on the state budget estimate for 2003;
Pursuant to Decree No. 03/2003/NĐ-CP dated January 15, 2003 of the Government on the adjustment of wages and social allowances and the initial reform of the wage management mechanism,
The Ministry of Finance guides the sources for implementing the adjustment of wages and social allowances in 2003 as follows:

I - GENERAL PROVISIONS:

1. Ministries, central agencies, and localities in allocating the state budget for the year 2003 must calculate and assign tasks to each administrative agency and public service unit to save 10% of regular expenditures (excluding salaries, allowances with the nature of salaries, contributions to international organizations, costs for national target programs, subsidies, and freight subsidies) to adjust salaries.

2. Public service units with income (including those that have implemented financial mechanisms under Decree No. 10/2002/NĐ-CP dated January 16, 2002 of the Government) shall use at least 40% of the retained income (after deducting collection expenses) for salary adjustments, except for the health sector which shall use at least 35% (including income from health insurance) for salary adjustments.

In cases where regulations stipulate that public service units with income must remit a portion of their income (from tuition fees, hospital fees, etc.) to the supervising authority for general adjustment, such units shall use at least 40% (except for the health sector which shall use at least 35%) of the retained income (after remittance) and income from the general adjustment fund (if any) for salary adjustments.

3. Administrative agencies with income shall use a minimum of 40% of the retained income (after deducting collection expenses) to implement the wage adjustment.

4. Local budgets shall allocate 50% of the increase in revenue in 2002 (the difference between actual revenue collected up to December 31, 2002 compared to the revenue forecast approved by the People's Council at the beginning of the year) and 50% of the increase in the revenue forecast for 2003 set by the Prime Minister compared to the revenue forecast for 2002 set by the Prime Minister to implement salary adjustments; allocate 50% of the increase in revenue in 2003 compared to the revenue forecast for 2003 set by the Prime Minister to implement salary adjustments for 2003 and carry over to 2004.

The central budget shall supplement the ministries, central agencies, and localities after they have implemented the above measures and still lack sufficient sources to ensure the implementation of the wage adjustment.

6. The central budget shall ensure payment of increased pensions and social insurance benefits (for those who retire on social insurance benefits guaranteed by the state budget) and additional preferential allowances for persons with meritorious service according to the Law on Persons with Meritorious Service. For those who retire on social insurance benefits (covered by the Social Insurance Fund), the Social Insurance Fund shall make the payments.

7. For laborers under contracts as prescribed in Decree No. 68/2000/NĐ-CP dated November 17, 2000 of the Government, the funds for paying salaries and allowances shall be self-funded by the agencies and units from their regular operating expenses and retained income (if any), and shall not be part of the agency or unit's salary fund.

II - SPECIFIC PROVISIONS:

1. For Ministries and Central Agencies:

Ministries and central agencies shall base their allocations of the state budget for 2003, as assigned in Decision No. 157/2002/QĐ-BTC or Decision No. 229/2002/QĐ-BTC dated December 24, 2002 of the Minister of Finance, on the announced savings targets of 10% of regular expenditures by sector, and allocate the budget to subordinate agencies and units, including immediately assigning each unit a savings target of 10% of regular expenditures to enable these agencies and units to proactively implement increased salary payments for 2003; they shall not retain the 10% savings of the units (concentrated at the first-level budget unit) to implement new salary increases.

When allocating the budget estimate and assigning savings targets to subordinate agencies and units, ministries and central agencies should note the following issues:

- For units that have piloted staffing quotas and administrative management costs under Decision No. 192/2001/QĐ-TTg dated December 17, 2001 of the Prime Minister, they must also save 10% of regular expenditures to implement new salary increases.

- For public service units that are not allocated staffing quotas by the State; operational funding (including salaries) is included in the product price set by the State (public services in transportation, land administration, geology, etc.): According to Decision No. 157/2002/QĐ-BTC dated December 24, 2002, the Ministry of Finance does not assign a savings target of 10% of regular expenditures; these units must base their implementation of increased salaries on the state budget allocation for 2003 according to the relevant regulations.

- For units that have implemented cost quotas (such as Tax Agencies, State Treasury, Vietnam Television...), within the cost quota permitted by the competent authority, during the quota period, the units must arrange within the quota to ensure newly issued policies and systems; these units must ensure the additional salary funding within the total allocated budget.

- For administrative agencies and public service units with retained income according to regulations, the sources for implementing increased salaries are as follows: using a portion of the retained income according to regulations (as stipulated in Points 2 and 3 of Section I above), using 10% of regular expenditure savings to implement salary adjustments. Ministries and central agencies need to instruct subordinate agencies and units to calculate and report the following indicators:

+ Increased wages as prescribed.

+ Retained income according to regulations if applicable (after deducting collection expenses), including the amount used for increased salary payments; the amount remitted to the supervising authority for general adjustment according to regulations (if applicable).

When ministries and central agencies allocate the budget and assign regular expenditure savings targets to subordinate agencies and units, they must calculate the income of each unit and the regular expenditure savings used for increased salary payments, ensuring that after deducting the savings for salary increases, there remains a reasonable increase level among units and the implementation of important tasks assigned.

- The use of revenue and 10% regular expenditure savings to implement additional salary increases shall be based on the following principles:

+ Units may not use revenue (including revenue adjusted between units) and regular expenditure savings from this field to implement additional salary increases for other fields.

+ For units without separate staffing structures to perform tasks, they may use regular expenditure savings and retained income according to regulations (if applicable) to cover regular tasks.

+ If the source for salary increases (as stipulated in Section I above) exceeds the required expenditure for new salary payments according to regulations, the unit may use the surplus to cover other business expenses.

+ Public service units with income that self-fund operations, if after using retained income according to regulations they still lack funds to pay salaries as required, they should report to the supervising authority for consolidation and submission to the finance authority at the same level for consideration and approval of supplementary funding.

2. Regarding provinces and centrally-administered cities:

2.1. Determine the total additional financial needs when implementing the new salary system for local management and salary payment subjects, including kindergarten teachers managed by communes who have been recruited into the establishment according to the prescribed regulations, and commune health workers receiving salaries based on rank and grade.

For kindergarten teachers managed by communes but not part of the state establishment, after rearranging tasks and applying measures to generate sources according to the above principles without ensuring sufficient funds to pay salaries and social insurance and health insurance at the minimum wage level, they shall be supported from the local budget's education and training expenditure to ensure that kindergarten teachers earn no less than the minimum wage and pay social insurance and health insurance as stipulated in Decision 161/2002/QĐ-TTg dated November 15, 2002 of the Prime Minister on certain policies for developing preschool education.

2.2. The People's Committee of provinces and centrally governed cities shall direct the calculation and determination of funding sources from the local budget and a portion of revenue from public institutions and administrative units to implement the increased salary in 2003, specifically as follows:

- Specifically determine the results of tax revenue collection on the local territory in 2002 (the actual amount deposited into the State Treasury by December 31, 2002), and on this basis calculate the source of 50% of the increased revenue in 2002 that the local budget enjoys according to the classification of the State Budget Law compared to the approved 2002 budget by the People's Council at the beginning of the year (excluding the increase in revenue from reinvestment in the locality from land use rights, land rental fees, proceeds from the sale of state-owned housing, agricultural land use tax, forest resource tax, a portion of lottery revenue, etc.).

- The source of 50% of the increased revenue in the 2003 budget compared to the 2002 budget assigned by the Prime Minister (excluding reinvestment in the locality according to the prescribed regulations as mentioned above), with the minimum level announced and assigned by the Ministry of Finance in Decision No. 158/2002/QĐ-BTC dated December 24, 2002 of the Minister of Finance.

In cases where the People's Council decides to allocate an increase in revenue compared to the budget assigned by the Prime Minister, then the additional revenue should reserve 50% to prepare for the implementation of the increased salary in 2003 and carry over to 2004, and the locality only allocates spending tasks corresponding to 50% of the increased revenue; in management, it also follows this principle.

- Determine and assign an index of saving 10% of the regular budget expenditure for departments, sectors, and subordinate levels of the budget to ensure that the total savings of 10% of regular expenditures of the province or city does not fall below the savings of 10% already assigned in Decision No. 158/2002/QĐ-BTC dated December 24, 2002 of the Minister of Finance.

Local budgets at all levels shall not retain 10% of regular expenditure at the budget level.

- Determine and consolidate a portion of the revenue retained according to the regulations to implement salary adjustments for departments, sectors, and subordinate levels of the budget according to the principles stated in Points 2 and 3 of Section I of this Circular.

2.3. Guidelines for lower-level budgets (districts, communes) to organize the calculation and determination of the portion of the increased salary from 50% of the increased revenue in 2002; 50% of the increased revenue in the 2003 budget compared to the 2002 budget; the source of savings of 10% of regular expenditure; and a portion of revenue to implement the new salary at public institutions and administrative units as stipulated in Points 2 and 3 of Section I above.

Based on this, clearly announce the level of support from the provincial or city budget for lower-level budgets in cases where the sources of lower-level budgets are insufficient to implement additional salaries.

2.4. For budgetary units at all levels (departments, bureaus, etc., under the province; offices, bureaus, etc., under the district), they shall organize implementation similar to central ministries and agencies as stated in Point 1 above.

III- PROCEDURES FOR REPORTING, REVIEWING FUNDS, ISSUANCE, PAYMENT, AND SETTLEMENT OF THE SALARY, ALLOWANCES, SUBSIDIES, AND INCREASED LIVING EXPENSES FUND FOR 2003:

1. Preparing reports:

1.1. Heads of Ministries and central agencies are responsible for compiling reports on the increased salary fund and allowances and the sources of implementation (including the savings of 10% of regular expenditure, a portion of retained revenue) and the amount requested for supplementary funding from the State Treasury (if insufficient) according to Form No. 1 and 2 (attached) to be sent to the Ministry of Finance before March 31, 2003, for review and consolidation to submit to the Prime Minister for decision on supplementary funding for the increased salary.

- The People's Committees of provinces and centrally governed cities are responsible for compiling and reporting on the increased salary fund and allowances of the locality and the sources of implementation (as stipulated in Section I of this Circular) and the amount requested for supplementary funding from the State Treasury (if insufficient) according to Form No. 3, 4, 5, and 6 (attached) to be sent to the Ministry of Finance before March 31, 2003, for review and consolidation to submit to the Prime Minister for decision on supplementary funding for the increased salary.

1.2. Based on the supplementary amount decided by the Prime Minister, heads of ministries and central agencies and People's Committees of provinces and centrally governed cities are responsible for organizing the examination and approval of the increased salary and the sources to ensure the implementation of the new increased salary for subordinate units and budget levels; based on this, allocate the supplementary amount for the implementation of the new increased salary to subordinate units and budget levels. Report the situation of implementation regarding the increased salary fund and allowances and the sources of implementation to the Ministry of Finance and the Ministry of Home Affairs according to the form and regulations stipulated in Joint Circular No. 03/2003/TTLT-BNV-BTC dated February 17, 2003 of the Ministry of Finance and the Ministry of Home Affairs guiding the implementation of Decree No. 03/2003/NĐ-CP dated January 15, 2003 of the Government.

Depending on the specific circumstances of their own agencies and localities, heads of ministries and central agencies, and People's Committees of provinces and centrally governed cities shall specify the reporting time for units and subordinate budget levels.

2. Regarding the distribution and payment of increased salaries:

2.1. When budgetary units allocate detailed budget estimates according to the budget classification and send them to the same-level finance authority as the basis for issuance, they must pay attention to allocating the savings of 10% of regular expenditure to corresponding items to implement salary adjustments as prescribed.

2.2. The Ministry of Finance shall temporarily allocate the support amount from the central budget to provinces and centrally governed cities and central ministries and agencies (after using the sources of funds in Section I and still lacking sources) according to the progress of implementation until the Prime Minister's Decision on the supplementary amount for provinces and centrally governed cities and central ministries and agencies (the remaining part) to implement the salary and social assistance system in 2003.

2.3. Pending a supplementary decision from the competent authority, financial agencies at all levels shall temporarily allocate the support amount from the budget for units to implement the additional salary for 2003 (after utilizing revenue sources and saving the remaining 10% shortfall) according to the progress of implementation until there is a Decision from the competent agency regarding the supplementary amount from the budget (the remaining shortfall) for units implementing the 2003 salary system and social allowances.

2.4. Units using the budget are responsible for paying the additional salary for 2003 to employees in accordance with Circular Joint No. 03/2003/TTLT-BNV-BTC dated February 17, 2003, issued by the Ministry of Home Affairs and the Ministry of Finance guiding Decree No. 03/2003/NĐ-CP dated January 15, 2003, of the Government on adjusting salaries, social allowances, and reforming the salary management mechanism in one step; the provisions of this circular and current regulations.

2.5. Specifically, the implementation of the distribution and payment of increased salaries for January and February 2003 shall be carried out according to Circulars No. 483 TC/NSNN, 485 TC/NSNN, and 486 TC/NSNN dated January 14, 2003, of the Ministry of Finance.

3. Settlement: The settlement of funds for implementing increased salaries and social allowances shall be conducted in accordance with the Law on State Budget and current legal documents.

IV- This Circular takes effect concurrently with the effectiveness of Government Decree No. 03/2003/NĐ-CP dated January 15, 2003. In the course of implementation, if any difficulties arise, units are requested to report promptly to the Ministry of Finance for study and resolution.