Circular No. 49/2005/TT-BTC guiding the advance payment of capital by the State Treasury for the state budget

CIRCULAR

Guidelines for Temporary Advance of Funds from the State Treasury to the State Budget

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Pursuant to Decree No. 60/2003/NĐ-CP dated June 6, 2003 of the Government detailing and guiding the implementation of the Law on State Budget;

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 Decree No. 123/2004/NĐ-CP dated May 18, 2004 of the Government stipulating certain financial mechanisms for the special state budget of Hanoi;

Pursuant to Decree No. 124/2004/NĐ-CP dated May 18, 2004 of the Government stipulating certain financial mechanisms for the special state budget of Ho Chi Minh City;

Pursuant to Decision No. 235/2003/QĐ-TTg dated November 13, 2003 of the Prime Minister stipulating the functions, tasks, powers, and organizational structure of the State Treasury under the Ministry of Finance;

The Ministry of Finance hereby guides the temporary advance of idle funds from the State Treasury to the State Budget as follows:

I. GENERAL PROVISIONS

1. The State Treasury may temporarily advance funds to the central budget and to the budgets of provinces and centrally-administered cities (hereinafter referred to collectively as provincial-level budgets). The temporary advance of funds to the central budget shall be through the Ministry of Finance; the temporary advance of funds to provincial-level budgets shall be through the People's Committees of provinces and centrally-administered cities.

2. The temporary advance of funds from the State Treasury to the central budget and provincial-level budgets shall be decided by the Minister of Finance according to the principle of not affecting the settlement and payment responsibilities of the State Treasury.

3. The budget level receiving the temporary advance shall be responsible for using the temporarily advanced funds from the State Treasury for the approved purposes, repaying the advance fully and on time, and paying a fee to the State Treasury on the amount temporarily advanced as stipulated herein. The budget level that receives the advance shall be responsible for repaying the temporarily advanced funds to the State Treasury.

4. The temporary advance of funds to the State Budget can only be carried out at the State Treasury and the State Treasuries of centrally-administered cities when approved by the Minister of Finance and signed off by the State Treasury for the advance procedures. The State Treasuries of districts, counties, towns within provinces are not permitted to temporarily advance funds to any entity.

II. SPECIFIC PROVISIONS:

1. Purpose of Temporary Advance of Funds:

1.1. For the central budget: The State Treasury temporarily advances funds to address temporary shortfalls and meet urgent expenditure needs when the state budget has not yet collected sufficient revenue.

1.2. For provincial-level budgets: The State Treasury temporarily advances funds for the following projects:

1.2.1. Investment construction projects recorded in the annual plan and decided by the People's Councils of provinces and centrally-administered cities to accelerate progress to achieve economic benefits sooner (in accordance with Clause 3, Article 8 of the Law on State Budget).

1.2.2. Certain investment infrastructure projects generating revenues to repay the temporarily advanced funds, approved by competent authorities to attract domestic and foreign economic organizations' investments.

2. Level of Temporary Advance of Funds:

- The level of temporary advance for investment construction projects recorded in the annual plan under provincial-level budgets must ensure that the annual debt from fund mobilization (including temporarily advanced funds from the State Treasury and other sources) does not exceed 30% of the total annual investment in domestic construction projects of the provincial-level budget (except for Hanoi and Ho Chi Minh City, which should not exceed 100%). The total annual investment in domestic construction projects of the provincial-level budget includes:

- Capital for concentrated domestic investment construction;

- Capital for investment construction from land use fees;

- Additional targeted capital for stable domestic construction investment from the central budget (if applicable).

- The level of temporary advance for infrastructure investment projects generating revenues to repay the temporarily advanced funds, approved by competent authorities to attract domestic and foreign economic organizations' investments, shall be determined based on specific plans.

3. Procedures for Temporary Advance of Funds:

3.1. Temporary advance for the central budget:

When there is a need for a temporary advance, the Department of State Budget prepares a request for temporary advance (with comments from the State Treasury) for the Minister of Finance to consider and decide. Based on the Minister's decision, the State Treasury will coordinate with the Department of State Budget to implement it.

3.2. Temporary advance for provincial-level budgets:

To enable the Ministry of Finance to decide on the temporary advance of funds from the State Treasury, the People's Committees of provinces and centrally-administered cities need to follow these procedures:

- In cases where the temporary advance is for accelerating basic construction progress: The People's Committee of the province or centrally-administered city sends a letter to the Ministry of Finance (attached with the temporary advance plan approved by the People's Council) requesting a temporary advance of funds from the State Treasury. The temporary advance plan must clearly specify the list of projects to be temporarily advanced; the schedule for temporary advance; the schedule for repayment of the temporary advance; the total outstanding debt from all sources of funding raised and commitments to use the temporarily advanced funds for their intended purpose and effectiveness, serving as the basis for the Ministry of Finance to consider and decide.

- In cases where the temporary advance is for attracting investment projects: The People's Committee of the province or centrally-administered city sends a letter to the Ministry of Finance (attached with the temporary advance plan) requesting a temporary advance of funds from the State Treasury. The temporary advance plan must clearly specify the list of projects to be temporarily advanced; the investment level of each project; the schedule for temporary advance; the area of land for lease and auction of land use rights...; the amount of rent and proceeds from the auction of land use rights; the schedule for repayment of the temporary advance and other commitments for the Ministry of Finance to consider and decide.

After being approved in writing by the Ministry of Finance, the People's Committee of the province or centrally-administered city prepares the temporary advance procedure (according to the attached model) to send to the State Treasury to temporarily advance funds as prescribed. The People's Committee of the province is responsible for managing and using the temporarily advanced funds in accordance with current regulations and committing to repay the State Treasury both principal and fees on time.

4. Duration of Temporary Advance and Recovery of Temporary Advance:

4.1. Duration of Temporary Advance:

4.1. Advance payment period:

- For advances to the central budget, the Minister of Finance shall decide.

- For advances to provincial budgets to accelerate investment construction progress for infrastructure (as mentioned in paragraph 1.2.1 above), the term shall not exceed twelve months for each advance.

- For advances to infrastructure investment projects to attract investment capital (as mentioned in paragraph 1.2.2 above), the term of the advance shall be decided by the Minister of Finance.

- The central budget and local budgets must repay advances to the State Treasury within the agreed deadlines stated in the advance request forms, except in cases where an extension of the repayment period is granted by the Minister of Finance.

4.2. Recovery of Advances:

Fifteen days before the deadline for recovery of advances, the State Treasury shall proactively notify the financial authorities to arrange for the budget reserves to repay the advances. For overdue advances, the State Treasury has the right to automatically deduct from the budget reserves to recover the debt; simultaneously, it shall inform the Department of Finance (for provincial budgets) and the State Budget Department (for the central budget).

5. Advance Fees:

Monthly, the financial authority shall pay to the State Treasury an amount of fee calculated on the outstanding balance of advances based on the actual number of days of the advance. The unified rate for advance fees for state budgets is 0.15% per month (30 days) on the outstanding balance of advances. The advance fees shall be recorded and utilized according to the regulations of the Ministry of Finance by the State Treasury.

6. Accounting Records and Reporting:

- The State Treasury shall record advances, repayments of advances, and advance fees according to the current state budget classification and in accordance with the regulations of the Ministry of Finance.

- Periodically (quarterly, annually), the State Treasuries of provinces and centrally-administered cities shall report on the status of advances, recovery of advances, and collection of advance fees to the State Treasury no later than the fifth day of the following quarter and the fifteenth day of the first month of the following year for annual reports (according to the attached form).

III/ IMPLEMENTATION:

1. The State Treasury shall take the lead and coordinate with the State Budget Department and relevant units to submit to the Minister of Finance for consideration and decision regarding advances from the State Treasury to provincial and centrally-administered city budgets.

2. State Treasury units and financial authorities must closely cooperate in planning revenue and expenditure budgets, urging timely collection, ensuring rational, timely, and effective use of funds, and full and timely repayment.

3. This Circular takes effect fifteen days from the date of publication in the Official Gazette and replaces Circular No. 52/1999/TT-BTC dated May 7, 1999, of the Ministry of Finance guiding advances from the State Treasury to the state budget. All previous regulations of the Ministry of Finance and the State Treasury concerning advances to the state budget that conflict with this Circular are no longer in effect./.