Decision No. 60/TTg On Certain Policies and Measures for Managing the Economic and Social Development Plan for 1994

Pursuant to …;

OF THE PRIME MINISTER

On certain guidelines and measures for managing the socio-economic development plan for 1994

In order to ensure the successful implementation of the orientation, objectives, and tasks of the socio-economic development plan for 1994-1995, to mobilize all resources to the maximum extent, establish order and discipline in socio-economic activities under the unified management and control of the State, the Prime Minister decides on certain guidelines and measures for managing the state plan as follows:

I. FINANCE, CURRENCY, PRICES

A. FINANCE - BUDGET

1. Regarding the decentralization of budget management to localities.

Pending the promulgation of the State Budget Law, continue to implement Decision No. 168/HĐBT dated May 16, 1992 of the Council of Ministers (now the Government) with the following supplementary and amended points:

a/ Supplement fixed revenue sources of the local budget as follows:

Agricultural land use tax.

Resource rental fees (excluding oil resources)

Income tax from high-income individuals (excluding income tax in Bà Rịa - Vũng Tàu).

b/ Regarding profit tax (excluding profit tax of units under full sectoral accounting):

Hanoi City, Ho Chi Minh City, Bà Rịa - Vũng Tàu Province, Long An Province, Kiên Giang Province, Dong Nai Province, Sông Bé Province, and Quảng Ninh Province retain 50%.

Other provinces and centrally-administered cities retain 100%.

c) In 1994, formal and informal import and export duties shall be collected by Customs, consolidated into the import and export tax account (items 04, 05, 33 of the current State Budget Classification).

d) For provinces and cities that have retained 100% of business tax but still do not have sufficient funds to meet the planned expenditure assigned by the central government, they may offset the absolute amount of central government revenues collected within their territory. If there is still a shortfall, the central government budget will supplement it.

e/ Regarding excess revenue over the plan assigned by the Government:

Retain 100% of the excess revenue from fixed revenue sources for the local budget.

If at year-end, the actual business tax revenue exceeds the plan assigned by the central government, the locality retains 60% of the excess.

Both excess revenues retained above must be used solely to build economic and social infrastructure based on approved economic and technical justifications, to replenish working capital deficiencies according to current regulations for state-owned enterprises, and to repay foreign debt (if any).

By February 1994, the Ministry of Finance must complete guidance on implementing the provisions of Article 1 mentioned above.

2. Regarding the system of paying basic depreciation of fixed assets.

All basic depreciation from state budget capital investment must be paid into the state budget. The state will allocate part of this capital for reinvestment in key enterprises that need investment to modernize technology, expand production, which have been approved by competent authorities and included in the basic construction investment plan.

The State Planning Commission and the Ministry of Finance will coordinate with relevant ministries and sectors to determine the objects eligible for reinvestment under central ministries and sectors based on investment needs, importance, and duration of operation of the enterprise, and report to the Prime Minister for decision. Objects eligible for reinvestment under provincial departments and sectors are decided by the Chairman of the People's Committee of the province or centrally-administered city.

Reinvestment using basic depreciation capital will be carried out in accordance with current regulations on basic construction investment management.

By February 1994, the Ministry of Finance will coordinate with the State Planning Commission and related agencies to provide guidance on the system of paying and using basic depreciation applicable for 1994; simultaneously study the management system of basic depreciation applicable for subsequent years and submit to the Prime Minister for issuance by June 1994.

3. Regarding some budget expenditures of the State.

a/ With the spirit of spending according to objectives, regulations, and effectiveness, ministries, sectors, and localities must register specific levels of savings for each expenditure item, ensuring a minimum savings rate of 5% of total expenditure to contribute to reducing the budget deficit as resolved by the National Assembly. In the first quarter of 1994, the Ministry of Finance and the State Planning Commission will coordinate with related agencies to report to the Prime Minister on the level and measures to implement the aforementioned savings.

b/ For convalescent beds, the state budget will only cover the cost of beds in the health, defense, interior, and social welfare sectors; the remaining beds will be covered by enterprise welfare funds or converted to commercial operations.

c/ Implement the Health Insurance Charter and the prescribed hospital fee collection system. Concentrate state budget funds on disease prevention and treatment for policy beneficiaries, ethnic minorities, extremely poor people, and important national programs (goiter prevention, malaria control, expanded immunization, HIV/AIDS prevention...). Beds in central-level medical facilities under various ministries and sectors must be reallocated to maintain essential beds in hospitals under the Ministry of Health, Ministry of Defense, Ministry of Interior, and coal and railway sectors. Transfer other medical facilities to the Ministry of Health or local management. Reasonably arrange the network of central, provincial, district, and commune hospitals in each area.

d/ The state budget will ensure funding for universal primary education, especially prioritizing mountainous, highland, remote areas, and boarding schools for ethnic minorities.

For secondary and tertiary education, tuition fees will be collected according to prescribed regulations, while the state will ensure teachers' salaries, infrastructure, and part of teaching and learning costs.

For training work, the state will focus on ensuring infrastructure, management costs, teachers' salaries, and scholarships for priority students and social policies, gradually transitioning to a system where production and business units self-fund vocational training according to their needs.

e) For national programs and expenditures recorded through central ministries and agencies, the managing bodies of these expenditures need to coordinate with the State Planning Commission and the Ministry of Finance to forecast the distribution of funds within the approved annual limit and simultaneously announce the budget revenue and expenditure targets for each ministry, agency, and locality.

The State Planning Commission and the Ministry of Finance shall aggregate the expenditures on national programs and those recorded through central ministries and agencies on a regional basis and notify the People's Councils, People's Committees, and local representatives of the National Assembly to coordinate in directing implementation and monitoring enforcement.

The Ministry of Finance will directly allocate the portion of program funds for central agencies' implementation and authorize the provincial finance departments to allocate the program funds and expenditures recorded through central ministries and agencies for local implementation.

The managing bodies of programs and expenditures recorded through central ministries and the finance department shall inspect and urge the execution of the content and the use of funds; if misuse is detected, they must halt funding and recover the misused amount, while reporting to the Prime Minister for further handling measures.

g) The State Budget does not compensate losses for enterprises. In exceptional cases where loss compensation for enterprises is necessary, it must be decided individually by the Prime Minister.

h) Localities should utilize the contingency funds allocated in their budgets and the excess revenues from local budgets to address urgent spending needs arising during the implementation of plans. The management of central government contingency funds and excess revenues is carried out according to Directive No. 132-TTg dated March 27, 1993, issued by the Prime Minister. The Ministry of Finance and the State Planning Commission need to establish cooperation regulations to assist the Prime Minister in promptly and accurately handling the allocation of central government contingency funds and excess revenues.

i) By the first quarter of 1994, the Ministry of Finance, in collaboration with relevant agencies, will submit to the Prime Minister a system for thrift and waste prevention in production, business operations, basic construction, administrative services, and military units.

B. ON CREDIT AND CURRENCY

1. Immediately implement measures to mobilize all available capital from the public: people:

By the first quarter of 1994, the State Bank will issue long-term savings schemes, housing construction savings; expand the deposit savings scheme allowing deposits at one location but withdrawals at multiple locations; encourage private accounts at banks...

By the first quarter of 1994, the Ministry of Finance will present to the Government a proposal for organizing the issuance of long-term government bonds and corporate bonds; cooperate with Ho Chi Minh City to pilot the issuance of bonds for the Nguyen Tat Thanh Road construction project.

The State Bank will collaborate with the Ministry of Finance to propose to the Government the organization of a medium- and long-term credit market and study the establishment of a securities market in Ho Chi Minh City and Hanoi. In 1994, efforts will be made to form a Securities Exchange in Ho Chi Minh City.

2. The State Bank will perfect the mechanism for money supply, ensuring effective regulation of currency circulation to meet production, construction, commodity circulation, and people's living needs.

3. Adjust interest rates for deposits and loans flexibly, closely aligning with the supply and demand for capital, inflation indices, and harmonizing the relationship between domestic and foreign currency interest rates. Unify the direction of monetary policy on interest rates under the State Bank.

4. Expand payment activities and organize domestic and international payment services. The Ministry of Finance and the State Bank will present to the Government proposals for handling overdue debts in phase two; suggest solutions for local and enterprise foreign debt.

5. Regarding foreign exchange management, by the first quarter of 1994, the State Bank will work with relevant agencies to propose to the Government regulations on foreign exchange management, aiming for the Bank to buy and sell foreign currencies as needed. Initially in 1994, implement the full purchase and sale of foreign currencies for administrative and service units; set foreign currency reserve limits for enterprises, exceeding which the Bank will be responsible for buying and selling when enterprises require foreign currencies. The buying and selling exchange rate is the rate published by the State Bank at the time of transaction. The announced rate must ensure principles encouraging exports and imports according to planned directions, meeting requirements in foreign currency transactions without adversely affecting market price stability. The State Bank is responsible for publishing daily foreign exchange rates as a basis for commercial banks and financial companies authorized to trade in foreign currencies.

By the first quarter of 1994, the State Bank will propose to the Government a plan to transform the operations of the two foreign exchange trading centers in Hanoi and Ho Chi Minh City into inter-bank foreign exchange markets to gradually establish a foreign exchange market in Vietnam.

6. By the first quarter of 1994, the Ministry of Finance, the State Planning Commission, and the State Bank will complete guidance on implementing the Regulation on Foreign Borrowing and Debt Repayment according to Decree No. 58/CP dated August 30, 1993, issued by the Government.

C. ON PRICES

1. Achieve price stabilization throughout the year, particularly for important materials and essential goods for the people, contributing to curbing inflation as required by the Fourth Session of the Ninth National Assembly Resolution.

2. The Government Price Board is responsible for closely monitoring market price trends to detect and promptly recommend necessary measures to the Prime Minister to prevent price spikes. By the first quarter of 1994, the Government Price Board will research and report to the Prime Minister the price level for 1994, focusing on important materials still priced by the state such as electricity, oil, steel, cement...

II. RAISING, USING, AND MANAGING INVESTMENT CAPITAL

 A. RAISING INVESTMENT CAPITAL

1. The investment plan must encompass and guide all sources of investment capital for the entire national economy, including:

State budget investment capital.

Investment capital self-raised by state-owned enterprises.

Investment capital from non-state economic sectors.

Foreign direct investment.

Medium-term and long-term investment credit.

2. Implement diversification of forms to mobilize capital from the public to rapidly increase domestic investment sources. Based on planning and specific projects, provinces and cities shall develop plans to lease or transfer land and real estate usage rights to supplement capital for urban infrastructure construction. This plan may only be implemented after approval by the Prime Minister.

3. Industries and localities must prepare well programs, projects, and lists of works in priority order as a basis for attracting foreign investment.

Enterprises must calculate their ability to borrow and repay through a bank guarantee (if required by the foreign side) to borrow funds for production and business construction projects.

4. By the first quarter of 1994, the State Committee on Cooperation and Investment shall coordinate with relevant agencies to submit to the Government a decision to amend and supplement regulations implementing the Law on Foreign Investment to create a favorable legal environment for foreign investors.

B. USE OF INVESTMENT CAPITAL

1. State budget capital shall only be invested in socio-economic infrastructure projects. All production and business projects, and socio-economic infrastructure projects capable of recovering costs such as airports, ports, electricity, postal and telecommunications... must switch to a self-borrowing and self-repayment model. For the electricity sector, in 1994, the state budget will only allocate capital to complete the 500KV transmission line, the Hoa Binh hydroelectric power plant, and 35KV and below transmission lines.

2. Medium-term and long-term credit according to the plan shall be limited to lending to enterprises that the state requires to maintain and develop.

Investment credit raised by banks will be widely available to all economic sectors based on borrowing and repayment capacity, at market interest rates.

C. MANAGEMENT OF INVESTMENT CAPITAL

1. Only record and allocate capital according to the approved total budget estimate. Additional quantities due to design changes shall only be recorded in the plan and allocated capital after approval by the competent authority.

2. Improve bidding mechanisms and record capital plans and advance payments according to progress after bidding.

3. The Ministry of Construction shall coordinate with relevant agencies to review survey, design prices, especially material purchase and sale prices between state agencies. In 1994, investment cost standards shall be issued, and unsuitable fee ratios shall be removed from the budget.

III. CIRCULATION OF MATERIALS AND GOODS

A. ON EXPORTS AND IMPORTS

1. In February 1994, the Ministry of Trade shall submit to the Government a new decree on state management of exports and imports to replace Decree No. 114-HĐBT dated April 7, 1992; publish the following lists:

Prohibited export and import items.

Export items managed by quotas.

Export and import items under planned guidance.

Export and import items guided by specialized management agencies.

Items designated by the state for enterprises to handle exports and imports.

The Ministry of Trade shall coordinate with relevant agencies to issue regulations on managing exports and imports of items listed above.

The National Planning Commission and relevant agencies shall balance and forecast promptly to manage exports and imports of items under planned guidance, ensuring domestic production and consumption needs during periods of excess or shortage.

2. The import of equipment must be carried out in accordance with the provisions of Decision No. 91-TTg dated November 13, 1992, of the Prime Minister.

3. The Ministry of Finance and the Ministry of Trade shall coordinate with relevant agencies to study production conditions and markets, and promptly propose adjustments to import and export tax rates, financial support... to implement state policies of encouragement or restriction for certain specific items.

B. DOMESTIC CIRCULATION

1. The Ministry of Trade, the Ministry of Agriculture and Food Industry, the Ministry of Heavy Industry, and the Ministry of Construction shall be responsible for guiding subordinate trading organizations to ensure circulation reserves of oil products, fertilizers, steel, cement, sugar, rice, and timely intervene in the market to prevent sudden price fluctuations.

2. Continue to supply social policy goods to mountainous areas and ethnic minorities in difficult regions. Starting in 1994, ensure sufficient iodized salt for mountainous provinces. The Ministry of Trade shall lead relevant ministries and agencies to submit to the Government a suitable implementation method.

3. The Ministry of Trade shall submit to the Government a commodity policy for the first six months of 1994, creating a legal environment for trading units and facilitating supervision, inspection, and handling of compliance by organizations and individuals engaged in trade.

4. By the first quarter of 1994, the Ministry of Trade shall submit to the Government a proposal to reorganize the state trading system nationwide.

5. Organize the reorganization of the national reserve system towards reducing the range of items, only reserving truly essential items for the economy, particularly those needed to respond to natural disasters and enemy threats.

IV. SYSTEM OF PLANNING INDICATORS

1. The system of planning indicators assigned by the Prime Minister to ministries and localities shall be implemented according to Decision No. 61-TTg dated February 8, 1994.

2. The Chairman of the National Planning Commission shall guide ministries and localities on certain necessary indicators to ensure major balances in the national economy and implement the state plan's orientation.

The Minister of Finance shall coordinate with the Chairman of the National Planning Commission to guide ministries and localities on indicators related to state budget revenue and expenditure.

The budget revenue collection targets assigned by state management agencies to enterprises are guiding indicators. Enterprises of all economic sectors shall fulfill their financial obligations to the State in accordance with the provisions of tax laws, tax ordinances, and other State revenue collection regimes./.