Circular No. 50/2004/TT-BTC guiding the establishment, management, and use of the Tobacco Raw Material Investment Fund

CIRCULAR

Guidelines for the establishment, management, and utilization of

The Tobacco Raw Material Investment Fund

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Pursuant to Decree No. 76/2001/NĐ-CP dated October 22, 2001 of the Government on tobacco production and business activities, the Ministry of Finance issues guidelines for the establishment, management, and utilization of the Tobacco Raw Material Investment Fund as follows:

Chapter I. SCOPE AND APPLICABLE OBJECTS:

1. The Tobacco Raw Material Investment Fund (hereinafter referred to as the Tobacco Raw Material Investment Fund) is established for the purpose of developing tobacco raw material regions to improve the quality of tobacco products, meet market demands both domestically and internationally, reduce the import ratio gradually, and increase the quantity of exported tobacco raw materials.

2. Enterprises (State-owned companies, joint-stock companies where the State holds more than 50% of the charter capital) that invest in growing tobacco plants according to the planning approved by the Prime Minister are eligible to establish the Tobacco Raw Material Investment Fund if they satisfy the following conditions:

- Pay all types of taxes to the State budget in accordance with current tax laws.

- Deduct sufficient depreciation expenses in accordance with current State regulations.

- Operate tobacco businesses profitably.

Enterprises that only purchase tobacco raw materials for production (without investing in growing tobacco plants) are not eligible to establish the Tobacco Raw Material Investment Fund.

Chapter II. SOURCES FOR FORMING THE TOBACCO RAW MATERIAL INVESTMENT FUND:

1. The rate of fund contribution: From 1% to 5% of the purchase price of the quantity of tobacco raw materials sold during the period or the purchase price of the quantity of tobacco raw materials put into production to create consumed products during the period. The specific annual contribution rate of enterprises under the General Corporation shall be decided by the Board of Directors of the General Corporation; enterprises without a Board of Directors shall be decided by the enterprise's General Director based on ensuring that the profit of the following year is not lower than the previous year.

+ Purchase price: is the actual price recorded on invoices, purchase lists, or the average actual inventory price of the enterprise, excluding tax and purchasing costs.

+ Quantity of tobacco raw materials sold during the period: is the amount of tobacco raw materials grown by the enterprise within the country consumed during the period.

- All quantities of tobacco raw materials purchased must have complete invoices and documents in accordance with State regulations.

- The amount of funds contributed to the Tobacco Raw Material Investment Fund is included in the cost of tobacco raw materials of enterprises that grow tobacco.

2. Other sources for forming the Tobacco Raw Material Investment Fund:

a. Depreciation of fixed assets invested using the Tobacco Raw Material Investment Fund.

Fixed assets serving scientific research at scientific research units with income from planting tobacco plants are only subject to amortization without depreciation.

b. Proceeds from the liquidation or sale of assets formed from the Tobacco Raw Material Investment Fund after paying taxes as prescribed by Law.

Liquidation or sale of assets must comply with current State regulations.

c. Recovered value of scientific research projects (projects that produce goods after paying taxes as prescribed by Law) funded from the Tobacco Raw Material Investment Fund.

Chapter III. ESTABLISHMENT AND MANAGEMENT OF THE TOBACCO RAW MATERIALS INVESTMENT FUND:

1. The Tobacco Raw Materials Investment Fund shall be used for the following purposes:

a. Investing in the construction of stations, farms, and technical centers of enterprises and scientific research units with income from tobacco cultivation to improve seed structure, planting techniques, preliminary processing, and technology transfer to tobacco farmers. Supporting investment in the construction of technical facilities (drying ovens, drying houses, warehouses, etc.) of raw material tobacco producers.

b. Allocating funds for research topics, experiments, and applications of scientific and technological progress aimed at improving seed structure, planting techniques, preliminary processing, and tobacco raw materials processing; purchasing equipment and tools for research centers, seed breeding stations and farms managed by enterprises and scientific research units with income from tobacco cultivation in approved tobacco raw material regions.

c. Supporting raw material tobacco producers through advance capital, seeds, materials, and purchasing tobacco leaves when harvested under agricultural product sales contracts signed between enterprises and producers according to Decision No. 80/2002/QĐ-TTg dated June 24, 2002 of the Government Prime Minister on policies encouraging the consumption of agricultural products through contracts.

d. Providing support to mitigate consequences and compensate for part of losses caused by natural disasters to raw material tobacco producers who have signed tobacco planting contracts with enterprises and scientific research units with income from tobacco cultivation, after deducting insurance company compensation (if any).

e. Allocating funds for agricultural extension work, propaganda, and dissemination of guidance on tobacco cultivation techniques to farmers.

2. The organization of the Tobacco Raw Materials Investment Fund is as follows:

a. For enterprises independently implementing tobacco planting investments not belonging to State-Owned Corporations: The Fund shall be managed and utilized by the enterprise's General Director.

b. For State-Owned Corporations: The Tobacco Raw Materials Investment Fund in State-Owned Corporations shall be managed and utilized by the Corporation's General Director according to plans approved by the Board of Directors.

3. Establishment of the Tobacco Raw Materials Investment Fund:

- Based on the business situation of the planned year and the prescribed conditions, enterprises investing in tobacco planting must establish a plan for establishing and using the Tobacco Raw Materials Investment Fund in accordance with the approved domestic tobacco raw material production usage plan.

- The enterprise's plan for establishing and using the Tobacco Raw Materials Investment Fund must be registered with the same-level financial agency and the tax authority where the enterprise is headquartered as a basis for inspection and supervision. If the enterprise does not register, it will not be allowed to establish and use this fund.

- The time for developing and registering the fund establishment plan coincides with the time for developing the annual business and financial plan of the unit.

- Specifically for State-Owned Corporations: They are responsible for reviewing and consolidating the annual establishment and usage plans of member units reported to the Ministry of Finance (Enterprise Financial Department) and the Ministry of Industry.

Quarterly, member units of State-Owned Corporations subject to fund establishment shall temporarily set aside the fund (if there is profit) and transfer the entire amount to the Corporation for management and use according to the approved common purpose. At the end of the year, when preparing the annual financial report, member units shall determine the final amount to be set aside for the year and immediately supplement and transfer it to the Corporation.

4. Accounting and Settlement:

- All fund revenues and expenditures must have invoices and receipts in accordance with state regulations. If the expenditure involves basic construction investment, it must comply with current state regulations on basic construction investment management.

- Units utilizing the fund are responsible for accounting for fund revenues and expenditures in accordance with current regulations.

- At the end of the fiscal year, State-Owned Corporations and enterprises investing in tobacco planting are responsible for reporting on the establishment and use of the Tobacco Raw Materials Investment Fund and summarizing it in the annual financial settlement report of the unit to be sent to regulatory agencies according to current regulations. If the Tobacco Raw Materials Investment Fund is not fully utilized, the remaining balance will be carried over to the next year.

- For member units under State-Owned Corporations at the end of the year, based on the settled revenue and expenditure figures of the fund transferred, they shall settle the remaining balance to the Corporation's fund.

- The increase in fixed assets is recorded according to the current accounting system.

Chapter IV. IMPLEMENTATION:

This Circular shall take effect fifteen days after its publication in the Official Gazette. All other provisions regarding the establishment, management, and utilization of the Tobacco Raw Material Investment Fund that conflict with this Circular are hereby abolished.

Enterprises that were previously permitted by the Ministry of Finance and the Ministry of Industry to establish the Tobacco Raw Material Investment Fund, if there is any remaining balance in the Fund, may transfer it to the new Fund for management and utilization in accordance with the provisions of this Circular.

State-owned Joint Stock Companies and enterprises engaged in tobacco cultivation are responsible for managing and utilizing the Fund in compliance with the provisions of Section III of this Circular and current financial management regulations.

During implementation, if any difficulties or obstacles arise, the relevant sectors, provinces, cities, and units establishing and utilizing the Tobacco Raw Material Investment Fund are requested to promptly report them to the Ministry of Finance for study, guidance, and supplementation.