Circular No. 64/2006/TT-BTC guiding the implementation of Decision No. 42/2006/QĐ-TTg dated February 16, 2006 of the Prime Minister on certain financial and budgetary preferential mechanisms for the City of Can Tho.

CIRCULAR

Guidelines for implementing Decision No. 42/2006/QĐ-TTg dated February 16, 2006 of the Prime Minister on certain financial and budgetary mechanisms with preferential treatment for the City of Can Tho concerning the City of Can Tho

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 Decision No. 42/2006/QĐ-TTg dated February 16, 2006 of the Prime Minister on certain financial and budgetary mechanisms with preferential treatment for the City of Can Tho;

The Ministry of Finance guides the implementation of certain financial and budgetary mechanisms with preferential treatment for the City of Can Tho as follows:

A- GENERAL PROVISIONS:

1. These Circulars guide the implementation of provisions regarding financial and budgetary mechanisms with preferential treatment for the City of Can Tho, including: mechanisms for budget management and mechanisms for mobilizing financial resources for the development of the City of Can Tho.

2. In addition to the financial and budgetary mechanisms with preferential treatment prescribed in Decision No. 42/2006/QĐ-TTg dated February 16, 2006 of the Prime Minister and guided in these Circulars, the City shall implement general regulations on financial and budgetary management as prescribed 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 and budgetary matters.

B- SPECIFIC PROVISIONS:

I. REGARDING THE BUDGET MECHANISM:

1. Regarding the allocation of investment capital through ministries and central agencies and the provision of investment capital from the central budget for key projects within the city's territory.

1.1. During the period from 2006 to 2010, each year based on the city’s budget allocation capacity and the central budget's balancing capacity, the central budget will allocate and provide support from the central budget to implement important projects that are significant to the City of Can Tho and the Mekong Delta provinces according to the list of projects specified in Point a, Clause 1, Article 1 of Decision No. 42/2006/QĐ-TTg dated February 16, 2006 of the Prime Minister.

1.2. Principles for allocation and support of capital: For investment projects under the city's management, the central budget will provide targeted support to the city's budget to implement them. For projects within the city's territory managed by ministries and central agencies, the central budget will allocate capital through ministries and central agencies to implement them. Implementation methods are as follows:

1.2.1. For investment projects under the city's management: Each year, before July 25 of the previous year, the Department of Finance will coordinate with the Department of Planning and Investment and relevant departments to assist the People's Committee of the City. Based on the total project capital approved by the competent authority and divided into annual implementation phases; the progress of project implementation and the capital needs for project implementation in the planning year, clearly identifying the city's budget allocation, central budget support, and other financial sources according to the prescribed regime, they will send it to the Ministry of Finance and the Ministry of Planning and Investment for consolidation and reporting to the Government to submit to the National Assembly for decision on the level of targeted supplementary funding from the central budget to the city's budget for each project in the annual budget estimate.

1.2.2. For investment projects within the city's territory managed by ministries and central agencies: Each year, based on the total project capital approved by the competent authority, the progress of project implementation in the planning year, ministries and central agencies with related projects will prepare the budget demand for capital and send it to the Ministry of Planning and Investment and the Ministry of Finance before July 25 of the previous year for consolidation and reporting to the Government to submit to the National Assembly for decision in accordance with the State Budget Law.

2. For other important projects such as municipal multi-specialty hospitals, etc., based on the total investment capital of the project decided by the competent authority, the progress of project implementation in the planning year, the city's budget capacity and the central budget capacity; based on the proposal of the People's Committee of the City, the Ministry of Finance and the Ministry of Planning and Investment will consolidate and report to the Government to submit to the National Assembly for targeted support from the central budget to the city's budget in accordance with the State Budget Law.

3. Regarding the allocation of investment capital from government bonds: Based on the plan for issuing government bonds and the purpose of using government bond funds for development investment; the Ministry of Planning and Investment will coordinate with the Ministry of Finance to incorporate three projects managed by the City of Can Tho into the list of investment projects from government bond funds, with phased investment suitable to the implementation schedule, including: Mauthan Street - Tra Noc Airport Road; Bong Tong Street - One Thousand Street and the Project to Upgrade and Expand Cai Cu Port, and submit to the competent authority for decision.

4. Regarding rewards and targeted support from the excess revenue of the central budget generated on the city's territory:

4.1. Regarding rewards for excess revenue of the central budget: Each year, in cases where there is an increase in revenue allocated to the central budget compared to the budget assigned by the Prime Minister from shared revenue between the central budget and the city's budget on the city's territory as prescribed by the State Budget Law, the city's budget will be rewarded 30% of the increased revenue, but not exceeding the increase compared to the actual amount achieved in the previous year. The method for determining the reward level, principles for using the reward money, and accounting methods for the reward money are implemented in accordance with Section 17, Part IV of Circular No. 59/2003/TT-BTC dated June 23, 2003 of the Ministry of Finance.

4.2. For the annual increase in central budget revenue compared to the estimate assigned by the Prime Minister (excluding: value-added tax on imported goods; revenues not managed by the City, not generated within the City's territory but only recorded and paid at the City level; revenues and expenditures recorded according to the provisions of the law, revenues retained by units for management through the budget according to the provisions of the law), based on the ability to balance the state budget and the need for support from the City, the Ministry of Finance will coordinate with the Ministry of Planning and Investment to report to the Government for submission to the Standing Committee of the National Assembly for comments, prioritizing targeted support for the City's budget according to the provisions of the State Budget Law. Based on the Prime Minister's decision regarding the targeted supplementary allocation from the annual increase in central budget revenue to the City's budget, the People's Committee of the City shall implement investment in accordance with the supported objectives.

The excess budget revenue and the annual targeted support from the central budget to the City's budget as stipulated in Points 4.1 and 4.2, Clause 4, Section I, Part B of this Circular shall be used in accordance with the provisions set forth in Point d, Clause 1, Article 1 of Decision No. 42/2006/QĐ-TTg dated February 16, 2006 of the Prime Minister on certain preferential financial and budget mechanisms for the City of Can Tho.

5. Regarding the 2007 budget estimate:

For the 2007 budget estimate (the first year of the next stable budget period), the Ministry of Finance and the Ministry of Planning and Investment shall cooperate with the People's Committee of the City of Can Tho to prepare the City's budget estimate based on the principle: The budget estimate for development investment under the City's management includes: the budget estimate for development investment within the local government budget balance estimate (excluding infrastructure investment funds from land use fees revenue) and the budget estimate for development investment from targeted supplementary allocations from the central budget to the local budget (excluding foreign investment funds) corresponding to the level of development investment managed by the City of Hai Phong or the City of Da Nang; The regular expenditure budget estimate shall be prepared according to standard rates and reported to the Government for submission to the National Assembly and the Standing Committee of the National Assembly for decision in accordance with the State Budget Law.

II. ON RAISING FINANCIAL RESOURCES FOR DEVELOPMENT INVESTMENT:

1. The City of Can Tho is permitted to organize domestic capital raising through the issuance of local government bonds in accordance with Decree No. 141/2003/NĐ-CP dated November 20, 2003 of the Government and other methods prescribed by law; the City's budget is responsible for paying principal, interest, and related costs in accordance with the regulations.

When there is a need to raise capital for investment, the People's Committee of the City shall prepare a plan to submit to the Municipal People's Council for decision in accordance with Point 1.3.4, Clause 1.3, Section 1, Part II of Circular No. 59/2003/TT-BTC dated June 23, 2003 of the Ministry of Finance.

2. The City of Can Tho may raise external loans to implement important infrastructure projects within the City's budgetary responsibilities based on the principle: The People's Committee of the City shall develop a plan, seek loan sources, obtain 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 according to the mechanism where the Government lends to the City which then lends back to implement projects and works as proposed by the People's Committee of the City. The City is responsible for allocating from its budget to repay principal, interest, and various fees in accordance with the loan contracts signed in accordance with the law.

The total debt raised through the methods prescribed in Clauses 1 and 2, Section II, Part B of this Circular shall not exceed 30% of the total basic construction investment capital of the City's budget as decided annually by the Municipal People's Council (excluding funds raised for investment in projects as prescribed by law, and unstable supplementary funds from the central budget for the City's budget - if any).

3. The City of Can Tho may implement a mechanism to partially subsidize interest rates for organizations when they borrow funds to invest in important projects with the potential to recover capital (industrial zones, environmental services, public sanitation, drainage, etc.) in accordance with Vietnamese laws and without violating international agreements to which Vietnam is a party. The specific amount and duration of interest rate subsidies for each organization and project within the scope and capacity of the city's budget shall be determined annually by the Department of Finance, the Department of Planning and Investment, and relevant departments to assist the People's Committee of the City of Can Tho in preparing the budget estimate for submission to the Municipal People's Council for decision in accordance with the State Budget Law.

4. Annually, based on the budget estimate for Official Development Assistance (ODA) funds and commitments made with donors, priority shall be given to allocating ODA funds to the City of Can Tho for important infrastructure projects that cannot recover capital, which fall within the City's budgetary investment responsibilities; the City's budget shall ensure the provision of domestic counterpart funds for these projects. Management and implementation procedures shall follow the current regulations of the State concerning the management of Official Development Assistance (ODA) funds.

5. On raising and effectively utilizing land use fee revenues for economic and social development investment in the City of Can Tho:

To use the city-managed land fund effectively, based on the city's land use plan according to the approved planning decision by the competent authority, and the capital mobilization and infrastructure investment tasks decided by the People's Committee of the City, the People's Committee of the City may borrow from the city budget and from mobilized sources (local government bonds, other mobilized sources as prescribed by law) for infrastructure construction projects within the budget investment tasks, relocating production and business establishments within the city to suburban areas and industrial zones to create land funds; on this basis, auction the right to use land and state assets according to the prescribed regime, generating capital for development investment and repaying the advance loans from the city budget and the mobilized sources. The implementation method is as follows:

- Based on the city's land use planning; the investment project within the budget task that has been approved by the competent authority and the project implementation schedule, the People's Committee of the City decides to borrow from the city budget and from mobilized sources for the project. The amount borrowed for investment projects is based on the volume of work progress, up to the maximum level of the approved budget estimate.

- Management and disbursement shall be carried out in accordance with the State's regime for managing state budget capital.

- The proceeds from the auction of land use rights shall be used to repay the borrowed sources from the city budget and from mobilized sources, with the remainder being deposited at 100% into the city budget (land use fee) for investment in infrastructure within the budget investment tasks as prescribed.

C - IMPLEMENTATION:

This Circular takes effect fifteen days after its publication in the Official Gazette. Based on the guidance provided in this Circular, the People's Committee of Can Tho City directs the Department of Finance to coordinate with relevant agencies to organize its implementation; during the implementation process, if there are any difficulties, they are requested to report to the Ministry of Finance for consideration and resolution./.