Circular No. 53/2004/TT-BTC guiding the implementation of Decision No. 54/2004/QĐ-TTg dated April 5, 2004 of the Government on financial and budgetary mechanisms for preferential treatment of Hai Phong City.

CIRCULAR

Guidelines for implementing Decision No. 54/2004/QĐ-TTg dated April 5, 2004 of the Government on preferential financial mechanisms for Haiphong City

Regarding preferential financial mechanisms for Haiphong City

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Pursuant to the State Budget Law No. 01/2002/QH11 dated December 16, 2002, and Decree No. 60/2003/NĐ-CP dated June 6, 2003 of the Government detailing and guiding the implementation of the State Budget Law;

Pursuant to Decree No. 77/2003/NĐ-CP dated July 1, 2003 of the Government stipulating functions, tasks, powers, and organizational structure of the Ministry of Finance.

The Ministry of Finance guides the implementation of Decision No. 54/2004/QĐ-TTg dated April 5, 2004 of the Prime Minister on preferential financial mechanisms for Haiphong City as follows:

A. GENERAL PROVISIONS:

1. This Circular guides the implementation of preferential financial mechanisms for Haiphong City according to Decision No. 54/2004/QĐ-TTg dated April 5, 2004 of the Prime Minister.

2. Preferential financial mechanisms for Haiphong City include: preferential mechanisms for budget management and preferential mechanisms for mobilizing capital for investment development.

3In addition to the preferential financial mechanisms prescribed in Decision No. 54/2004/QĐ-TTg dated April 5, 2004 of the Prime Minister and guided for implementation in this Circular, the city shall implement general regulations on financial management stipulated in the State Budget Law, Decree No. 60/2003/NĐ-CP dated June 6, 2003 of the Government, Circular No. 59/2003/TT-BTC dated June 23, 2003 of the Ministry of Finance, and other legal documents on financial management.

B. SPECIFIC PROVISIONS:

I. ON THE BUDGET MECHANISM:

1. On the implementation of targeted supplementary funds from the central budget to the city budget:

From now until 2010, the central budget will provide targeted supplementary funds to the city budget to support the implementation of important projects that are significant for Haiphong City and the Northern Key Economic Region according to the list of works specified in Clause 1, Article 1 of Decision No. 54/2004/QĐ-TTg dated April 5, 2004 of the Prime Minister.

Implementation method: Annually, before July 25 of the previous year, the Department of Finance will coordinate with the Department of Planning and Investment and relevant departments to advise the People's Committee of the city based on the total project capital approved by the competent authority, the progress of the project, and the funding needs for implementation in the planned year, clearly identifying the city budget allocation, central budget support, and other financial sources according to regulations, and submit to the Ministry of Finance and the Ministry of Planning and Investment for consolidation and reporting to the Government for submission to the National Assembly to decide on the level of targeted supplementary funds from the central budget to the city budget for each project in the annual budget estimate.

2. On rewarding excess revenue over the state budget estimate and targeted support from increased central budget revenue: central book:

Annually, if there is an increase in revenue allocated to the central budget compared to the estimate assigned by the Prime Minister, the central budget will reward the excess revenue to the city as follows:

2.1. For the increase in revenue allocated to the central budget compared to the estimate assigned by the Prime Minister from revenues shared between the central budget and the city budget according to the State Budget Law, the Haiphong City budget will be rewarded at 30% of the increase in revenue, but not exceeding the increase compared to the previous year's actual performance. The method of determining the reward amount, principles of using the reward money, and accounting methods for the reward money are implemented according to the provisions in Section 17, Part IV of Circular No. 59/2003/TT-BTC dated June 23, 2003 of the Ministry of Finance.

2.2. For the increase in revenue compared to the central budget estimate annually, based on the state budget balance capacity and the city's need for support, the Ministry of Finance and the Ministry of Planning and Investment will report to the Government to seek the Standing Committee of the National Assembly's opinion, prioritizing targeted support for the city budget according to the State Budget Law.

The excess revenue rewards and annual targeted support amounts mentioned above shall be used in accordance with the provisions in Point c, Clause 1, Article 1 of Decision No. 54/2004/QĐ-TTg dated April 5, 2004 of the Prime Minister on certain preferential financial mechanisms for Haiphong City.

3. On mobilizing and effectively utilizing land use fees for economic and social development in Haiphong City:

To effectively utilize the land fund managed by the city, the People's Committee of the city may allocate the city budget and mobilize resources (local government bonds, other sources as provided by law) for infrastructure construction projects under the budget investment program, relocating production and business establishments within the city to suburban areas or industrial zones to create land funds; based on which, auctioning the right to use land and public assets according to regulations, generating capital for development and repaying the previously allocated funds from the city budget and other mobilized sources. Implementation method as follows:

- Based on the city's land use planning; investment projects under the budget investment program have been approved by the competent authority.

- The People's Committee of the city decides to allocate the city budget and mobilize resources for the project. The investment project allocation amount is based on the volume and progress of implementation, up to the approved budget estimate; management and distribution must comply with the state's regulations on managing state budget funds.

- The proceeds from the auction of land use rights will repay the previously allocated funds from the city budget and other mobilized sources, with the remainder being fully deposited into the city budget (land use fee) for investment in infrastructure under the budget investment program as stipulated.

- The accounting of budget revenue and expenditure for these tasks shall be carried out in accordance with the prescribed regulations.

II. ON MOBILIZING FINANCIAL RESOURCES FOR INVESTMENT DEVELOPMENT:

1The city of Hai Phong shall implement a mechanism to subsidize part of the interest rate for organizations and individuals when borrowing funds to invest in areas with the potential to recover capital (tourism infrastructure investment, transportation route investment; urban environmental service activities, medical examination and treatment, etc.) in accordance with the provisions of the law. The specific level of support and duration of interest rate subsidy for each organization and individual in each field within the scope and budgetary capacity of the city. The Department of Finance, the Department of Planning and Investment, and relevant departments and units shall be responsible for assisting the People's Committee of Hai Phong City to determine the annual budget allocation for this financial support to prepare the budget estimate for submission to the People's Council of Hai Phong City for decision in accordance with the State Budget Law.

2. Annually, based on the budget estimate for official development assistance (ODA) funds and the commitments made with sponsors, priority shall be given to allocating ODA funds to Hai Phong City for projects that cannot recover capital, to invest in important infrastructure projects under the investment tasks of the city budget; the counterpart funding for these projects shall be guaranteed by the city budget. The management and implementation procedures shall follow the current regulations of the State on managing official development assistance (ODA) funds.

3. For the need to borrow foreign funds to implement important projects: The city may mobilize foreign loans for developing infrastructure within the expenditure tasks of the city budget according to the principle: The People's Committee of the city shall develop a plan, seek loan sources, solicit opinions from the Ministry of Finance, the Ministry of Planning and Investment, and the State Bank of Vietnam before submitting to the Prime Minister for consideration and decision in accordance with the mechanism where the Government lends to the city which then lends back to implement projects as proposed by the People's Committee of the city. The city shall be responsible for allocating from the city budget to repay principal, interest, and fees in accordance with the loan contracts signed in compliance with the law.

4. The total domestic debt raised in accordance with Clause 3, Article 8 of the State Budget Law and foreign debt raised as stipulated in Section 3, Part II of this Circular shall not exceed 30% of the total construction investment capital of the city budget as decided by the People's Council of the city for the current fiscal year (excluding investment capital from raised funds and projects funded from supplementary targeted but unstable funds from the central government to the city budget - if any).

C. IMPLEMENTATION

This Circular shall take effect fifteen days from the date of publication in the Official Gazette. Based on the provisions of this Circular, the People's Committee of the city shall direct the Department of Finance to coordinate with relevant agencies to organize its implementation; during the implementation process, if there are difficulties, they are requested to report to the Ministry of Finance for consideration and resolution.

Note: On June 16, 2004, the Ministry of Finance issued Circular No. 6618 TC/NSNN regarding the correction of Circular No. 53/2004/TT-BTC dated June 9, 2004 as follows:

Circular guiding the implementation of Decision No. 54/2004/QĐ-TTg dated April 5, 2004 of the Government on preferential financial and budget mechanisms for Hai Phong City is corrected to read: Circular guiding the implementation of Decision No. 54/2004/QĐ-TTg dated April 5, 2004 of the Prime Minister on preferential financial and budget mechanisms for Hai Phong City.

The Ministry of Finance requests the People's Committee of Hai Phong City to be informed of this correction and to organize its implementation accordingly./.