Circular No. 64/2007/TT-BTC guiding the preparation of the state budget estimate for 2008

CIRCULAR

Guidelines for preparing the state budget estimate for 2008

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Implementing Directive No. 733/CT-TTg dated June 12, 2007 of the Prime Minister on the preparation of plans for economic and social development and the state budget estimate for 2008, the Ministry of Finance guides the work of evaluating the implementation of state budget tasks in 2007 and the preparation of the state budget estimate (NSNN) for 2008 as follows:

A. EVALUATION OF THE IMPLEMENTATION OF STATE BUDGET TASKS IN 2007:

Based on the state budget tasks for 2007 decided by the National Assembly, based on the goals, tasks of economic and social development, and the state budget revenue and expenditure estimates for 2007 assigned by the Prime Minister, leveraging the results achieved in the first six months of the year, ministries, central agencies, and localities in the second half of 2007 focus on fully implementing the solutions according to Resolution No. 68/2006/QH11 of the National Assembly on the state budget estimate for 2007, Resolution No. 03/2007/NQ-CP dated January 19, 2007 of the Government on key measures to guide the implementation of the economic and social plan and the state budget for 2007, and Circular No. 107/2006/TT-BTC dated November 20, 2006 of the Ministry of Finance guiding certain points on the organization of implementing the state budget estimate for 2007; striving to comprehensively exceed all targets and tasks of economic and social development and the state budget for 2007.

Along with the implementation of state budget tasks for 2007, ministries, central agencies, People's Committees of provinces and centrally governed cities organize the evaluation of the results of implementing state budget tasks for 2007 as the basis for building the state budget estimate for 2008 according to the following main contents:

I. Evaluation of the implementation of state budget revenue tasks in 2007:

Based on the results of the first six months of the year, evaluate the results of state budget revenue in 2007 on the basis of implementing measures to strive to complete and exceed the state budget revenue estimate assigned, focusing on analyzing the following main issues:

- The results of implementing state budget revenue in 2007 compared to the tasks assigned by the Prime Minister and the provincial People's Councils. In 2007, efforts should be made to achieve at least a 3% increase in state budget revenue over the estimate assigned by the Prime Minister, including domestic revenue (excluding oil revenue) increasing by at least 3-5%, and import-export revenue in accordance with regulations and actual import-export turnover.

- Evaluate and analyze factors influencing and affecting the results of revenue implementation in 2007 such as: new production and business capacity due to new investments, expanded investments, deepened investments; the transformation and restructuring of state-owned enterprises through forms such as shareholding, establishing holding companies and subsidiaries...; joint venture projects; reviewing and evaluating the results of revenue from domestic and foreign investment projects that have commenced operations and have completed their preferential periods; the results of achieving production volume and consumption targets for major products; cost; selling price; profit; the results of implementing land use fee auction tasks; real estate transaction situation;...

- Evaluate and analyze the impact of amendments and supplements to revenue management systems and policies in 2007 on the implementation of state budget revenue tasks such as: value-added tax, corporate income tax, fees and charges, revenues related to real estate; the implementation of the Law on Tax Administration; applying special preferential tariff rates of Vietnam to implement the Agreement on the Common Effective Preferential Tariff (CEPT) of ASEAN countries and other commitments to integration (GATT Agreement)... Evaluate and analyze the impact on state budget revenue when joining the World Trade Organization (WTO).

- Evaluate and analyze the results of economic and social management measures implemented by the Government, ministries, and provincial committees on the production and business plans of units within their jurisdiction, state budget revenue management work; the results of cooperation among relevant levels and sectors in state budget revenue management and the organization of inspection, collection of overdue taxes, prevention of revenue loss, smuggling, and commercial fraud,...

- Evaluate the tax arrears situation in 2007: clearly identify the amount of tax arrears carried over from 2006, the potential for new arrears in 2007, the expected amount of arrears recovered in 2007, and the amount to be recovered in 2008. Fully and accurately compile the total tax arrears, classify tax arrears according to the criteria specified in the tax arrears management process. Evaluate the results of handling tax arrears according to Directive No. 15/2005/CT-TTg dated April 15, 2005 of the Prime Minister.

- Evaluate the declaration and refund of value-added tax; the amount of VAT refunds generated in 2007; the amount refunded to businesses in 2007; the estimated amount of VAT refunds for 2007 to be refunded in 2008;... Particularly, it is necessary to thoroughly analyze the reasons for significant increases or decreases in VAT refunds compared to the previous year.

- Ministries, central agencies, and budgetary units evaluate the revenue implementation situation in 2007 (total revenue, amount remitted to the state budget, amount retained for expenditure according to regulations).

II. EVALUATION OF THE IMPLEMENTATION OF STATE BUDGET EXPENDITURE TASKS IN 2007:

1. For development investment expenditure tasks:

1.1. Evaluation of the allocation and implementation of construction investment capital in 2007:

- Evaluation of the allocation and assignment of the construction investment expenditure (XDCB) budget for 2007:

+ Evaluation of the allocation and arrangement of funds to implement investment construction projects in 2007, especially important projects ensuring progress, projects completed in 2007 (comparing and analyzing the capital requirements for approved construction projects with the allocated funds for implementation in 2007); arranging funds to settle construction investment debts from the state budget, to repay the temporarily advanced funds that must be repaid according to regulations.

+ Evaluate the implementation of programs and projects using official development assistance (ODA) funds; the fulfillment of counterpart funds for ODA projects according to commitments; the disbursement progress of ODA funds and counterpart funds.

+ Evaluate the implementation of regulations ensuring the allocation of counterpart funds for Group C projects completed within two years, and Group B projects completed within four years; efforts to prevent dispersion and prolongation of ineffective investment periods; the execution of reallocation and reduction of expenditures for unallocated funds for other projects and works.

- Evaluate the situation and results of construction investment capital utilization:

+ Evaluate the implementation of the 2007 construction investment plan according to the following contents: number of projects and works; allocated investment capital; completed construction volume; completed and accepted construction volume; paid capital (including payment for completed construction volume); number of completed projects and works, including completed work items... (categorized by Groups A, B, C).

+ Evaluate compliance with regulations on capital management: investment procedures; timeframes, progress, and final settlement of construction projects and works in 2007; existing issues in current investment management mechanisms and policies.

+ Summarize, evaluate, and analyze the situation of investment capital from government bonds, education treasury funds, and other sources as prescribed.

+ Consolidate, evaluate, and analyze the situation of accumulated construction investment volumes and the results of measures to address accumulated construction investment volumes.

+ Evaluate the effectiveness of construction investment in 2007 and previous years; analyze existing issues, causes, and solutions; focusing on evaluating and analyzing key national projects and ODA-funded projects; projects funded by government bonds, education treasury funds; projects funded by land use revenue, lottery proceeds;...

1.2. Evaluate the results of implementing development support tasks in 2007:

- Evaluate the implementation of preferential credit provided by the State, credit for poor households, and social policy households.

- Evaluate the implementation of trade promotion support policies, policies supporting public utility enterprises,...

- Evaluate the implementation of production and business development support: implementation of tax exemption and reduction regulations for fishing, salt production without processing, enterprises employing ethnic minority labor; support for small and medium-sized enterprises; localities should focus on evaluating the establishment, management, and implementation of financial and credit funds at the local level such as: Guarantee Fund for Small and Medium Enterprises Credit, Investment and Urban Development Support Fund,...

- Evaluate the implementation of national reserves.

2. For regular expenditure tasks:

2.1. Evaluate and analyze the results of budget allocation and management for implementing economic and social development tasks according to assigned indicators by the State for Ministries, central agencies, localities, and units in 2007; focusing on evaluating the results of important tasks, major programs, and projects in each sector, field, locality, and unit.

2.2. Evaluate the results of implementing mechanisms, policies, and expenditure systems in 2007 for the tasks of Ministries, central agencies, localities, and units. Focus on evaluating the results of the following mechanisms and policies:

- Evaluate the implementation results of the Law on Thrift and Anti-Waste and the Government's Action Program on Thrift and Anti-Waste pursuant to Decision No. 25/2006/QĐ-TTg dated January 26, 2006 of the Prime Minister; evaluate the situation of vehicle procurement, office equipment purchase, telephone usage, building and upgrading of office premises, conference and reception expenses, fuel savings, projects using ODA funds...

- Evaluate the implementation of Decree No. 130/2005/NĐ-CP dated October 17, 2005 of the Government on the mechanism of self-management and responsibility for personnel establishment and administrative management costs; evaluate the organization and implementation of the system of self-management and responsibility for task performance, organizational structure, personnel establishment, and finance for public service units under Decree No. 43/2006/NĐ-CP dated April 25, 2006 of the Government, and Decree No. 115/2005/NĐ-CP dated September 5, 2005 of the Government.

- Evaluate the implementation of medical examination and treatment benefits in 2007 for the poor according to the new poverty standard stipulated in Decision No. 170/2005/QĐ-TTg dated July 8, 2005 of the Prime Minister; free medical examination and treatment for children under six years old according to the Law on Protection, Care, and Education of Children; implementation of scholarship provisions for boarding and day students from ethnic minorities according to prescribed regulations.

- Evaluate the implementation of allowances for non-professional village-level cadres according to Decree No. 121/2003/NĐ-CP dated October 21, 2003 of the Government (evaluate the use of central budget support and local budget allocation to ensure implementation).

- Evaluate the implementation of subsidy fees, price subsidies, and provision of certain policy goods in 2007 in localities; implementation of policy provisions for free distribution of certain types of newspapers and magazines to ethnic minority and mountainous regions according to Decision No. 975/QĐ-TTg dated July 20, 2006 of the Prime Minister; support for creative literary and artistic works and press activities at the central level and local literary and artistic associations; support for high-quality local press works according to Decision No. 926/QĐ-TTg dated July 6, 2006 of the Prime Minister.

2.3. Ministries, sector management agencies shall assess the implementation of Resolution No. 05/2005/NQ-CP dated April 18, 2005 and Decree No. 53/2006/NĐ-CP dated May 25, 2006 of the Government on accelerating socialization of educational, health, cultural, and sports activities within their respective sectors; paying particular attention to assessing and analyzing the total resources and resource structure invested by society for sector development, the results of mobilizing resources from society for sector development, existing issues, causes, and solutions to better mobilize resources from society for sector development in the future.

2.4. Assess and analyze the regular expenditure structure according to groups of items: salary expenses, allowances with salary nature, and other expenses deducted from salary (social insurance, health insurance, trade union fees); regular business expenses; extraordinary or non-regular expenses (purchases, repairs, etc.) in 2007 of the Ministry, agency, or locality.

2.5. The situation of allocating and assigning the regular expenditure budget for 2007, the implementation of adjustments and transfers of the state budget among tasks and units during the implementation process.

2.6. Administrative reform work in implementing the state budget in 2007; clearly stating existing issues, causes, and solutions to address them.

3. For national target programs, Program 135 (Phase II), and the project to plant five million hectares of new forests:

Assess the allocation and assignment of budgets for national target programs in 2007; based on the allocated financial budget and progress, ministries, agencies managing national target programs, projects, and localities shall evaluate the volume of implementation in 2007 in detail according to each program and project. Pay special attention to evaluating the appropriateness, difficulties, and unreasonable aspects regarding objectives, contents, and methods of implementation compared to the overall direction, objectives, tasks, and contents of the program for the period 2007-2010, and propose adjustments and measures to overcome these issues in 2007 to ensure the correct implementation of the program's objectives and tasks, and suggest improvements and completion of the management mechanism for the program and project.

For national target programs implemented with both domestic and foreign funds, it is necessary to carefully evaluate the disbursement of foreign funds (advantages and difficulties, identifying causes and solutions to address them).

4. Evaluate the results of the wage reform system:

The results of reviewing and determining the funding requirements for wage reform; the results of implementing financial measures to create sources for wage reform from: savings of 10% of regular expenditures (excluding salaries and allowances with salary nature); 35-40% of retained revenue according to regulations; 50% of increased local government revenue;... and determine unused revenue from previous years transferred to 2008 to continue creating sources for wage reform.

5. For provinces and centrally-administered cities::In addition to the above requirements, it is necessary to focus on evaluating the implementation of the following tasks:

- Work on mobilizing financial resources at the local level to implement the economic and social development tasks of the locality.

- Results of implementing the budget expenditure structure (investment spending, regular spending, etc.) to meet the requirements of local investment and development; results of implementing the National Assembly's resolution on preventing scattered and dispersed investment; handling construction debt,...

- Results of implementing infrastructure investment tasks according to National Assembly resolutions, Resolutions No. 37-NQ/TW, 39-NQ/TW of the Politburo, and decisions of the Prime Minister such as Decision No. 168/2001/QĐ-TTg dated October 30, 2001, Decision No. 120/2003/QĐ-TTg dated June 11, 2003, Decision No. 134/2004/QĐ-TTg dated July 20, 2004 of the Prime Minister,...

- Allocation of the budget (including central government support budgets for local governments if applicable) and use of reserves to fulfill security, defense tasks; prevention and control of diseases, natural disasters, droughts, floods, especially avian influenza, foot-and-mouth disease, etc.; implementation of state policies and programs aimed at economic and social development, poverty reduction (implementing national poverty reduction policies; education, health, culture, socio-economic development programs in difficult areas, ethnic minority regions, mountainous areas, etc.); implementation of social policies, policies for those who have rendered meritorious services to the revolution, war veterans and their children affected by Agent Orange, medical examinations and treatments for the poor, children under six years old, etc., in the locality.

- Evaluation of the allocation and use of the budget (including central government support budgets for local governments if applicable) and use of reserves to fulfill security, defense tasks; prevention and control of diseases, natural disasters, droughts, floods, especially avian influenza, foot-and-mouth disease, etc.

- Evaluation of the implementation of the provisions of Clause 3, Article 8 of the State Budget Law on mobilizing capital for infrastructure investment and the repayment of maturing debts, estimated outstanding debts up to December 31, 2007 (for Hanoi and Ho Chi Minh City, evaluate the mobilization of capital for investment according to the special financial-budget mechanism of the locality). Evaluate the implementation of land auctions and the allocation and use of land use fee revenues for local infrastructure investments.

- Evaluation of the allocation and repayment (both principal and interest) of loans and advances due: loans mobilized according to Clause 3, Article 8 of the State Budget Law; preferential credit loans for the program of reinforcing irrigation canals, rural roads, village industry infrastructure, aquaculture infrastructure; central government advance payments that must be recovered into the 2007 state budget,...

- Evaluation of the allocation and repayment (both principal and interest) of loans and advances due: loans mobilized according to Clause 3, Article 8 of the State Budget Law; preferential credit loans for the program of reinforcing irrigation canals, rural roads, village industry infrastructure, aquaculture infrastructure; central government advance payments that must be recovered into the 2007 state budget,...

On the basis of the results of evaluating the implementation of the State budget tasks in 2007, evaluating the implementation of policies and systems for revenue and expenditure of the State budget and other related policies and systems; ministries, central agencies, and localities proactively propose specific amendments and supplements to policies and systems for revenue and expenditure of the State budget and other policies and systems, suggest guidance, direction, and organization of the implementation of State budget tasks, and submit them to the Ministry of Finance and relevant ministries and agencies for study, amendment, and supplementation or submission to competent authorities for timely amendment and supplementation.

B. TASKS OF BUILDING THE STATE BUDGET ESTIMATE FOR 2008 AND THE PERIOD 2008-2010:

The task of building the State budget estimate for 2008 is carried out concurrently with the implementation of the Resolution of the 10th National Party Congress on the orientation and tasks of economic and social development during the 2006-2010 period and the Resolutions of the National Assembly. It is requested that ministries, sectors, localities, and units base their work on the Resolution of the 10th National Party Congress, the Resolutions of the National Assembly, and the resolutions of the Party congresses at all levels of ministries, sectors, localities, and units to organize the construction of the State budget revenue and expenditure estimates for 2008 and the period 2008-2010 (with annual breakdowns) in accordance with the provisions of the State Budget Law and guiding documents, ensuring consistency between the goals, plans, and tasks and the State budget resources to strive for the successful realization of the economic and social development goals set forth in the Resolution of the 10th National Party Congress, the National Assembly's Resolutions, and the resolutions of the Party congresses at all levels; pay attention to the following main contents:

I. OBJECTIVES AND PRINCIPLES:

- The State budget estimate for 2008 must be constructed in a positive and effective manner, creating conditions to promote economic growth at a higher level, while addressing social issues, accelerating poverty reduction efforts, and ensuring national financial security.

- The State budget revenue estimate for 2008 and the period 2008-2010 must be built based on an objective and scientific analysis and forecast of factors such as economic growth, structural transformation, market fluctuations, domestic and international prices, and the impact of Vietnam's deeper integration into the global economy, especially after its accession to the WTO. The State budget revenue estimate for 2008 must ensure positivity, compliance with tax policies and regimes, and international tax commitments, ensuring the implementation of policies to encourage production and business development, market development, maintaining a stable and favorable business environment, and promoting the development of stable and solid revenue sources; at the same time, there must be effective measures to strengthen revenue management, prevent tax evasion and fraud, combat smuggling and commercial fraud, and reduce tax arrears.

- To create conditions for economic development, the State budget estimate for 2008 must reflect the view of creating a transparent, open, and equal investment and business environment, providing better services to investors, businesses, and traders nationwide; State budget investment capital should focus on developing economic and technical infrastructure, while attracting additional resources from the state, residents, and foreign investors, ensuring a significant increase in total social resources dedicated to economic and technical infrastructure development; the State budget must concentrate on human resource development investments, improving labor force skills, through ensuring funding for education, training, health, science and technology, culture, etc.; concentrating resources to meet the requirements of continuing salary policy reform; promoting administrative reform, restructuring government management bodies, and reducing staff.

At the same time, the State budget in 2008 and subsequent years needs to play a more active role in ensuring social equity, reducing wealth disparities among different strata of the population and regions within the country. Accordingly, it is necessary to reduce the financial burden on farmers and the poor, ensure funding for activities aimed at accelerating poverty reduction; create maximum conditions to support ethnic minority groups and social policy beneficiaries who enjoy public services provided by the state; the central budget should focus on supporting truly difficult localities.

- Achieving a positive, healthy, and solid fiscal balance for the State budget and local budgets; ensuring national financial security and the safety of local budgets.

II. MAIN CONTENTS:

The State budget estimate for 2008 and the period 2008-2010 is built in accordance with the provisions of the State Budget Law, Decree No. 60/2003/NĐ-CP dated June 6, 2003 of the Government, Directive No. 733/CT-TTg dated June 12, 2007 of the Prime Minister, and Circular No. 59/2003/TT-BTC dated June 23, 2003 of the Ministry of Finance, and other related documents. Among which, the following main contents need to be noted:

1. Tasks of building the financial and budgetary resource plan to implement the economic and social development goals and tasks according to the Resolution of the 10th National Party Congress and the Resolutions of the National Assembly:

Ministries, sectors, localities, and units build detailed financial and budgetary resource plans for 2008 and the period 2008-2010 (detailed for each year) to ensure the achievement of the goals and tasks set by ministries, sectors, localities, and units until 2010 to implement the Resolution of the 10th National Party Congress and the Resolutions of the National Assembly, and submit them to the Ministry of Planning and Investment and the Ministry of Finance for consolidation and reporting to the Prime Minister. In this process, it is necessary to analyze, forecast, and specifically formulate plans for mobilizing resources and implementing solutions; prioritize the allocation of resources for key tasks, overcoming the basic problem of dispersion. Specifically analyze changes and supplements compared to the projected State budget revenue and expenditure and development investment resources for the period 2008-2010, as stipulated in Circular No. 44/2005/TT-BTC dated June 3, 2005 of the Ministry of Finance, guiding the construction of the State budget estimate for 2006 and the period 2006-2010.

For ministries, sectors, and localities implementing pilot programs to develop medium-term financial plans and medium-term expenditure plans pursuant to Decision No. 432/QĐ-TTg dated April 21, 2003 of the Prime Minister (Ministries of Planning and Investment, Finance, Transport, Agriculture and Rural Development, Education and Training, Health; localities of Hanoi, Ha Tay, Binh Duong, Vinh Long) shall carry out the development of medium-term financial plans and medium-term expenditure plans for the period 2008-2010 concurrently with the preparation of the state budget estimate for 2008 and must be linked to the implementation of the goals and tasks of the five-year plan from 2006 to 2010. The requirements regarding content, procedures, timeframes, and responsibilities of ministries and localities in developing medium-term financial plans and medium-term expenditure plans will be detailed in specific guidance documents issued by the Ministry of Finance.

2. Budget revenue estimation work for the State budget in 2008:

The State budget revenue estimate must be positive, solid, highly feasible, aiming to achieve over 22% of GDP, with tax and fee revenues reaching over 21% of GDP. The domestic revenue estimate (excluding oil revenue and land use fees) must increase by at least 16-18% compared to the estimated actual achievement in 2007 (the estimated actual achievement in 2007 increased by at least 3-5% compared to the State budget revenue estimate for 2007 assigned by the Prime Minister). Specifically:

2.1. Domestic revenue estimate: Develop the State budget revenue estimate based on forecasts of economic growth in 2008 for each industry and sector, and economic bases of each locality to accurately calculate each sector and type of tax according to relevant tax laws and collection regulations. The domestic revenue estimate of each province and centrally-administered city must include all sources of revenue within the communes, wards, and towns. The revenue estimate must have economic basis and detail down to each industry, key units, and economic zones. Based on this, evaluate the results of implementation in 2007; set targets for 2008 and review the domestic revenue estimate for 2008 as announced, organize its preparation and report it according to the prescribed form in Circular No. 59/2003/TT-BTC dated June 23, 2003 of the Ministry of Finance and this Circular. At the same time, pay attention to new tax policies and regulations such as:

- Regarding Value Added Tax: Implement according to the guidelines in Circular No. 32/2007/TT-BTC dated April 9, 2007 of the Ministry of Finance guiding the implementation of Decree No. 158/2003/NĐ-CP dated December 10, 2003, Decree No. 148/2004/NĐ-CP dated July 23, 2004, and Decree No. 156/2005/NĐ-CP dated December 15, 2005 of the Government detailing the implementation of the Law on Value Added Tax and the Law Amending and Supplementing Certain Provisions of the Law on Value Added Tax.

- Regarding Corporate Income Tax: Implement according to the guidelines in Decree No. 24/2007/NĐ-CP dated February 14, 2007 of the Government detailing the implementation of the Law on Corporate Income Tax and related guidance documents of the Ministry of Finance.

- Regarding Water Resources Tax: Calculate and prepare the estimate according to the guidelines in Decree No. 147/2006/NĐ-CP dated December 1, 2006 of the Government amending and supplementing certain provisions of Decree No. 68/1998/NĐ-CP dated September 3, 1998 of the Government detailing the implementation of the Law on Resource Tax (amended) and the guidance circular of the Ministry of Finance No. 42/2007/TT-BTC dated April 27, 2007.

- Regarding Land Use Fees: On the basis of land planning and usage plans approved by competent authorities, accelerate the progress of allocating land with land use fees, leasing land, auctioning land use rights, or tendering projects using land according to the law; prepare the estimate of land use fees when the State allocates land with land use fees through auctions or without auctions according to Circular No. 70/2006/TT-BTC dated August 2, 2006 of the Ministry of Finance guiding amendments and supplements to Circular No. 117/2004/TT-BTC dated December 7, 2004 of the Ministry of Finance guiding the implementation of Decree No. 198/2004/NĐ-CP dated December 3, 2004 of the Government on collecting land use fees.

- Regarding Stamp Duty: Calculate and prepare the estimate according to the guidelines in Circular No. 02/2007/TT-BTC dated January 8, 2007 of the Ministry of Finance amending and supplementing Circular No. 95/2005/TT-BTC dated October 26, 2005 of the Ministry of Finance guiding the implementation of legal provisions on stamp duty.

- For other fees and charges: Implement according to Decree No. 24/2006/NĐ-CP dated March 6, 2006 of the Government amending and supplementing certain provisions of Decree No. 57/2002/NĐ-CP dated June 3, 2002 of the Government detailing the implementation of the Law on Fees and Charges and related guidance documents.

2.2. Revenue Estimate from Export and Import Activities:

- The revenue estimate must be developed based on analysis and forecasting of global, regional, and domestic economic situations; assessing and quantifying the impact of implementing the Agreement on Trade Liberalization (CEPT), bilateral trade agreements, the impact of Vietnam's accession to the World Trade Organization (WTO); the schedule for reducing import tariffs under the ASEAN-China Free Trade Area and ASEAN-Korea Free Trade Area; the State's policies and regulations on export and import activities for important goods; the rate of economic growth, domestic demand for imports to serve production and consumption; fluctuations in domestic and international market prices... affecting export and import activities.

- The revenue estimate must be developed based on effective management of revenue collection; strengthening measures to prevent revenue loss such as: handling overdue debts, combating smuggling, tax evasion, and commercial fraud.

3. Work on preparing the State budget expenditure estimate for 2008:

The Ministries, sector management agencies, and provincial People's Committees at the central level and in centrally governed cities, and budgetary units at all levels shall prepare the state budget expenditure plan for 2008 within the scope of the preliminary state budget expenditure plan for 2008 announced by the Ministry of Finance (for expenditures from foreign sources, prepare the expenditure plan according to the disbursement progress of borrowing and aid projects); based on expenditure regulations and standards, taking into account assigned tasks, allocate funds primarily for key important tasks, strictly implement thriftiness, and prevent waste. Prepare the state budget expenditure plan for 2008 by sector. Focus on allocating the state budget to implement important tasks for economic and social development, ensuring national security, defense, and poverty reduction. In particular:

3.1. Expenditure Plan for Development Investment:

- Concentrate on allocating investment development funds for national key projects; priority programs for economic and social development, poverty reduction, and promoting structural economic transformation during the 2006-2010 period. Prioritize funding for education and training development and health care services.

- Allocate capital according to the progress of ongoing projects and works, especially key and urgent projects, basic construction projects expected to be completed and put into use in 2008; ensure sufficient counterpart funds for programs and projects using ODA funds according to commitments, planning, and pre-investment preparation as prescribed.

- Within the 2008 investment plan, repay the State budget for previously advanced amounts; settle outstanding debts for completed basic construction works; prioritize sufficient funding for completed projects with approved investment final accounts; simultaneously, ensure no new basic construction debts arise during implementation.

- For Group C projects, ensure completion within two years; for Group B projects, ensure completion within four years; firmly refrain from spreading out funds and extending ineffective investment periods. Only include newly completed investment construction projects that have been approved before October of the previous year in the annual state budget expenditure plan.

- Project sponsors funded through government loans must arrange sufficient counterpart funds for these projects in accordance with signed agreements and domestic financial regulations to not affect implementation schedules.

- For interest subsidy expenditures on development credit and policy credit, base the expenditure plan on the actual situation in 2007, anticipated policy changes, and tasks for 2008, following current regulations.

- For supplementary national reserve expenditures: based on assigned national reserve tasks, central ministries and agencies responsible for managing reserves must assess and determine the national reserve levels as of December 31, 2007; estimate the additional reserve levels for each type of goods and materials, and the state budget expenditure plan for increasing national reserves, preserving goods, and plans for rotating and updating national reserve items managed in 2008.

- Central ministries and agencies, and localities assigned by the Prime Minister to invest in construction from government bonds shall prepare the 2008 investment expenditure plan for key transportation and water conservancy projects from this source according to established regulations. Simultaneously, they must strictly direct implementation to ensure compliance with specified timelines and objectives.

3.2. Expenditure Plan for Public Services in Education and Training, Science and Technology, Health Care, Culture and Society, Physical Education and Sports, Economic Services, Information Technology, National Security and Defense, Administrative Management, Party Affairs, Mass Organizations...:

- Prepare the expenditure plan for developing public services in education and training, culture, health care, environment, science and technology, society; ensuring national defense and security; administrative management expenditures, party affairs, mass organizations... based on the 2008 economic and social development plans of each ministry, central agency, and locality, and existing policies and regulations.

- Nationwide, allocate the state budget expenditure plan for 2008 (including both development investment and regular expenditures, salary reform expenditures) for the education and training sectors to reach 20% of total state budget expenditures (including lottery revenue); the cultural information sector over 1.5%; the science and technology sector 2%; environmental protection activities over 1%. Allocate the public service health care expenditure plan to ensure stipulated policies and regulations (funds for implementing medical treatment benefits for the poor, free medical treatment for children under six years old...), prioritizing preventive health care funding to prevent diseases.

- The expenditure plan for economic public services shall be based on the volume of tasks assigned by authorized bodies and state budget expenditure regulations and standards; concentrate on allocating funds for key tasks: maintaining and repairing critical economic infrastructure systems (transportation, water conservancy...) to increase usage time and investment efficiency; implementing agricultural, forestry, fisheries, and industrial promotion tasks; land administration public services... contributing to promoting growth and economic structural transformation.

- For administrative state agencies that prepare budgets and implement according to the mechanism of delegated autonomy and responsibility for staffing and administrative expenses as prescribed in Decree No. 130/2005/NĐ-CP dated October 17, 2005 of the Government to enhance autonomy tied with responsibility, improve financial management efficiency and operational performance. Public service units shall implement according to the provisions of Decree No. 43/2006/NĐ-CP dated April 25, 2006 of the Government on autonomy and responsibility for implementing tasks, organizational structure, staffing, and finance for public service units and Decree No. 115/2005/NĐ-CP dated September 5, 2005 of the Government on the autonomous mechanism and responsibility of public scientific and technological organizations; for public service units whose operating costs are fully or partially covered by the budget, the 2008 budget will be built based on continued stability and adjustments according to the increase in budget spending of the sector or field.

State administrative agencies and public service units with income as prescribed by law must prepare full revenue and expenditure budgets for tasks funded from fees, charges, and other revenues retained by the unit under the prescribed regime.

- For expenditure programs, research topics at the national and ministerial levels, expenditures for state-ordered tasks, and other important expenditures, units shall prepare budget expenditures according to current regulations and guidance provided in this Circular, while providing detailed explanations of the calculation bases.

- The budget for implementing policies of free distribution of certain types of newspapers and magazines to ethnic minority and mountainous regions, the budget for supporting creative works, cultural and artistic works, journalism, and high-quality local journalism works shall be implemented according to the Prime Minister's decision. The subsidy budget for publication prices, seed preservation subsidies, etc., shall be implemented according to the current system. Ministries, central agencies, localities, and units need to calculate subsidies based on determining quantities, production costs, transportation costs, and specific subsidy rates for each item according to the prescribed system.

3.3. For programs and projects using ODA funds, they must prepare full budgets strictly following the procedures, forms, and decisions on state budget management as stipulated by the State Budget Law and guiding documents, Government Decrees on investment management and basic construction, management and use of ODA funds, and Joint Circular No. 02/2003/TTLT-BKH-BTC dated March 17, 2003 of the Ministry of Planning and Investment and the Ministry of Finance; particularly detailing ODA and counterpart funds for each program and project, according to the nature of investment and non-investment expenditures, ensuring alignment with implementation schedules; submitting to the Ministry of Planning and Investment and the Ministry of Finance as required for consolidation in the 2008 state budget proposal submitted to the Government and the National Assembly for approval.

3.4. Continue to allocate state budget resources and mobilize financial sources to implement salary reform. Ministries, sectors, central agencies, localities, and units using state budget funds should proactively calculate and reserve resources to implement salary reform in the direction of saving 10% of regular expenditures in 2008 (excluding salaries and salary-like allowances); using at least 40% of the retained earnings according to the 2008 system of administrative agencies and revenue-generating public service units, while public health service units use at least 35% of retained earnings (after deducting drug, blood, transfusion fluid, and chemical costs); local budgets use at least 50% of the increase in local budget revenue forecasted for 2008 compared to the 2007 budget and 50% of the actual increase in local budget revenue in 2007 compared to the Prime Minister's allocation; simultaneously transferring unutilized salary reform funding sources from previous years (if any) to 2008 for continued implementation; all these funds must be accounted for and managed separately to continue implementing salary reform, not to be used for other purposes. The Ministry of Finance will issue specific guidelines on calculating and determining the funding sources reserved for implementing salary reform.

3.5. Central and local government budgets at all levels shall allocate budget reserves as prescribed by the State Budget Law to proactively respond to natural disasters, floods, epidemics, and urgent tasks outside the budget.

During the preparation of the 2008 budget, ministries, central agencies, localities, and budgetary units at all levels are responsible for proactively forecasting full requirements for expenditures to implement new policies, systems, and tasks (if any) that may arise in 2008; based on which, they shall allocate budgets to ensure the implementation of assigned important tasks and newly arising tasks; no situation should occur where after the budget is allocated by the competent authority, there is insufficient funding to implement existing policies and newly arising tasks.坚决拒绝为未充分预算规定的制度和规定实施的任务补充预备费。

3.6. Expenditure for national target programs and important projects:

BASED ON THE OBJECTIVES, TASKS, AND CONTENT OF NATIONAL TARGET PROGRAMMES FOR THE 2006-2010 PERIOD AS APPROVED BY THE PRIME MINISTER, THE MINISTRIES AND AGENCIES RESPONSIBLE FOR THE PROGRAMMES AND PROJECTS SHALL EVALUATE THE IMPLEMENTATION RESULTS OF THE PROGRAMMES AND PROJECTS IN THE 2006-2007 PERIOD, SPECIFY ANNUAL OBJECTIVES AND TASKS, AND DETERMINE SPECIFIC OBJECTIVES AND TASKS FOR THE YEAR 2008; BASED ON THE CURRENT FINANCIAL REGIME, THEY SHALL PREPARE THE BUDGET ESTIMATE FOR NATIONAL TARGET PROGRAMMES, PROGRAMME 135 (PHASE II), AND THE PROJECT TO PLANT 5 MILLION HA OF NEW FORESTS IN 2008 AND PREDICT THE BUDGET ESTIMATE FOR THE 2008-2010 PERIOD, PREDICT THE ALLOCATION SCHEME FOR THE BUDGET ESTIMATE OF THE NATIONAL TARGET PROGRAMMES AND PROJECTS FOR 2008 FOR CENTRAL MINISTRIES AND AGENCIES AND LOCALITIES (FOR PROGRAMMES IMPLEMENTED WITH FOREIGN FUNDS, THE ALLOCATION SCHEME INCLUDES BOTH DOMESTIC AND FOREIGN FUNDS), AND SUBMIT THESE TO THE MINISTRY OF PLANNING AND INVESTMENT AND THE MINISTRY OF FINANCE BEFORE JULY 20, 2007 FOR COMBINATION AND SUBMISSION TO THE GOVERNMENT AND THE NATIONAL ASSEMBLY FOR CONSIDERATION AND DECISION IN ACCORDANCE WITH THE PROVISIONS OF THE STATE BUDGET LAW.

3.7. THE MINISTRIES AND CENTRAL AGENCIES SHALL PREPARE THE BUDGET ESTIMATE FOR EXPENSES ACCORDING TO THE EXECUTING UNITS AND IMPORTANT EXPENDITURE TASKS (INCLUDING DETAILED EXPLANATIONS ON THE BASIS, POLICY, REGIME, IMPLEMENTATION SITUATION (RESULTS, FUNDS...), THE BUDGET ESTIMATE FOR EXPENSES IN 2008 AND SUBSEQUENT YEARS,...), AND SUBMIT THEM TO THE MINISTRY OF FINANCE AND THE MINISTRY OF PLANNING AND INVESTMENT FOR COMBINATION AND REPORTING TO THE PRIME MINISTER. THE MINISTRIES, CENTRAL AGENCIES, AND LOCALITIES SHALL ACTIVELY PREPARE CLEAR AND DETAILED REPORTS ON THE BUDGET ESTIMATE FOR REVENUE AND EXPENSES IN 2008 FOR THEIR SECTORS, INDUSTRIES, AND LOCALITIES IN ACCORDANCE WITH THE REGULATIONS.

BASED ON THE AUDITED REVENUE AND EXPENSES BUDGET FOR 2008, THE MINISTRIES, CENTRAL AGENCIES, AND LOCALITIES MUST BUILD A TIGHT AND DETAILED BUDGET ESTIMATE FOR EACH TASK AND EACH DIRECTLY SUBORDINATE BUDGET USING UNIT; AFTER CONSULTATION AND AGREEMENT WITH THE MINISTRY OF FINANCE AND THE MINISTRY OF PLANNING AND INVESTMENT, THE MINISTRIES, CENTRAL AGENCIES, AND THE PROVINCES AND CITIES DIRECTLY UNDER THE CENTRAL GOVERNMENT SHALL IMMEDIATELY IMPLEMENT THE WORK OF DEVELOPING THE ALLOCATION SCHEME FOR THE 2008 BUDGET OF THEIR MINISTRIES, AGENCIES, AND LOCALITIES SO THAT WHEN RECEIVING THE BUDGET FROM THE PRIME MINISTER, THEY CAN PROMPTLY SUBMIT TO THE AUTHORIZED AUTHORITIES FOR DECISION ON ALLOCATION AND ASSIGNMENT OF THE BUDGET TO THE BUDGET USING UNITS TO ENSURE COMPLETION BEFORE DECEMBER 31 IN ACCORDANCE WITH THE PROVISIONS OF THE STATE BUDGET LAW.

THE MINISTRIES, CENTRAL AGENCIES, AND LOCALITIES MUST CONCENTRATE ON GUIDING THE REVIEW OF ALL STAGES IN THE WORK OF BUDGET ALLOCATION, MANAGEMENT, AND USE, ESPECIALLY CAPITAL INVESTMENT AND LOAN ASSISTANCE FUNDS, TO ENSURE THAT BUDGET ALLOCATION IS ACCORDING TO THE OBJECTIVES, REGIMES, AND TARGET GROUPS; BUDGET MANAGEMENT AND USE MUST BE TIGHT AND EFFECTIVE, WITH REPORTING, AUDITING, AND INSPECTION SYSTEMS TO AVOID WASTAGE AND LOSS.

4. BUILD THE STATE BUDGET ESTIMATE TO ENSURE BALANCE IN THE STATE BUDGET AND LOCAL GOVERNMENT BUDGETS AT ALL LEVELS IN ACCORDANCE WITH THE PROVISIONS OF THE STATE BUDGET LAW AND DIRECTIVE NO. 733/CT-TTg DATED JUNE 12, 2007 OF THE PRIME MINISTER.

- THE BUDGET ESTIMATE FOR TAX AND FEE REVENUES OF THE STATE BUDGET MUST ENSURE REGULAR EXPENSES, PAYMENT OF DOMESTIC AND FOREIGN DEBTS DUE, AND FUNDS FOR IMPLEMENTING SALARY REFORM, WITH ACCUMULATION FOR DEVELOPMENT INVESTMENTS. THE STATE BUDGET DEFICIT SHOULD NOT EXCEED 5% OF GDP, BEING SUITABLE WITH DOMESTIC AND FOREIGN GRANTED LOAN CAPABILITIES, WITHOUT COMMERCIAL LOANS FROM ABROAD TO COVER THE BUDGET DEFICIT.

- THE PROVINCES AND CITIES DIRECTLY UNDER THE CENTRAL GOVERNMENT MUST BUILD THE BUDGET ESTIMATE FOR LOCAL GOVERNMENT EXPENSES WITHOUT EXCEEDING THE LOCAL GOVERNMENT REVENUE SOURCES AND THE SUPPLEMENTARY BALANCE FROM THE CENTRAL GOVERNMENT BUDGET TO THE LOCAL GOVERNMENT BUDGET AT THE STABLE LEVEL AS DETERMINED BY THE PRIME MINISTER FOR THE LOCALITY IN 2007.

- FOR PROVINCES AND CITIES DIRECTLY UNDER THE CENTRAL GOVERNMENT THAT NEED TO RAISE ADDITIONAL FUNDS FOR INCREASED DEVELOPMENT INVESTMENTS, THEY MUST BUILD THE BUDGET ESTIMATE IN ACCORDANCE WITH CLAUSE 3, ARTICLE 8 OF THE STATE BUDGET LAW TO ENSURE THAT THE LEVEL OF DEBT RAISED (INCLUDING THE AMOUNT EXPECTED TO BE RAISED IN 2008) DOES NOT EXCEED 30% (FOR HANOI AND HO CHI MINH CITY, IT IS 100%) OF THE BUDGET ESTIMATE FOR CAPITAL INVESTMENT AND CONSTRUCTION OF THE PROVINCIAL BUDGET OF THE LOCALITY; AT THE SAME TIME, THEY MUST ARRANGE FUNDS TO REPAY MATURING DEBTS (INCLUDING PRINCIPAL AND INTEREST).

5. REGARDING THE BUDGET ESTIMATE FOR LOCAL GOVERNMENTS:

5.1. REGARDING THE BUDGET ESTIMATE FOR LOCAL GOVERNMENT REVENUE:

BASED ON THE ECONOMIC AND SOCIAL DEVELOPMENT PLAN FOR THE 2006-2010 PERIOD AS APPROVED BY THE PARTY CONGRESSES AT ALL LEVELS, THE ABILITY TO ACHIEVE ECONOMIC AND SOCIAL INDICATORS AND THE LOCAL GOVERNMENT BUDGET IN 2007, AND THE FORECAST OF ECONOMIC GROWTH AND REVENUE SOURCES IN 2008 FOR EACH INDUSTRY AND FIELD, AND NEW REVENUE SOURCES ARISING IN THE LOCAL AREA, THE ECONOMIC ENTITIES OF EACH LOCALITY SHALL CALCULATE ACCURATELY AND COMPLETELY EACH FIELD AND EACH ITEM OF REVENUE ACCORDING TO THE REGIME; THE INTERNAL REVENUE BUDGET ESTIMATE FROM TAX AND FEE REVENUES (EXCLUDING OIL REVENUE AND LAND USE FEES) FOR 2008 SHALL INCREASE BY AT LEAST 16-18% COMPARED TO THE ESTIMATED 2007 FIGURE BASED ON THE ASSESSMENT THAT THE 2007 STATE BUDGET REVENUE INCREASED BY AT LEAST 3-5% COMPARED TO THE PRIME MINISTER'S BUDGET ESTIMATE (EXCLUDING OIL REVENUE AND LAND USE FEES), AND THE BUDGET ESTIMATE FOR EXPORT AND IMPORT ACTIVITY REVENUE SHALL INCREASE BY AT LEAST 8-9% COMPARED TO THE ESTIMATED 2007 FIGURE.

5.2. REGARDING THE BUDGET ESTIMATE FOR LOCAL GOVERNMENT EXPENSES:

THE LOCAL GOVERNMENT BUDGET FOR 2008 DURING THE STABLE BUDGET PERIOD (2007-2010) AS PROVIDED FOR IN THE STATE BUDGET LAW, THE PEOPLE'S COMMITTEES AT ALL LEVELS SHALL ACTIVELY BUILD THE BUDGET ESTIMATE FOR THEIR LOCAL GOVERNMENTS BASED ON THE REVENUE SOURCES AND EXPENSE TASKS ALLOCATED AT A STABLE LEVEL; THE BUDGET ESTIMATE FOR LOCAL GOVERNMENTS AT ALL LEVELS IN 2008 SHALL BE BASED ON: REVENUE SOURCES DETERMINED ACCORDING TO THE PERCENTAGE (%) OF REVENUE SHARING BETWEEN DIFFERENT BUDGET LEVELS, LOCAL GOVERNMENT REVENUE SOURCES ENJOYING 100% ACCORDING TO THE PROVISIONS OF THE STATE BUDGET LAW, AND THE STABLE SUPPLEMENTARY BALANCE FROM THE UPPER BUDGET LEVEL TO THE LOWER BUDGET LEVEL (IF ANY) AT THE LEVEL OF THE 2007 BUDGET ESTIMATE APPROVED BY THE NATIONAL ASSEMBLY, THE STANDING COMMITTEE OF THE NATIONAL ASSEMBLY, THE PEOPLE'S COUNCIL, THE PRIME MINISTER, AND THE UPPER LEVEL PEOPLE'S COMMITTEE.

BASED ON THE TASKS OF ECONOMIC AND SOCIAL DEVELOPMENT OF THE LOCALITY IN 2008, THE PERIOD 2008-2010, THE CURRENT SYSTEM OF REGULATIONS, POLICIES, AND EXPENDITURE STANDARDS; THE PREPARATION OF THE BUDGET FOR EXPENDITURE IN 2008, THE PERIOD 2008-2010 SPECIFICALLY FOR EACH FIELD WITH REASONABLE EXPENDITURE NEEDS, ENSURING THE ORDER OF PRIORITY TASKS AND THE GUIDELINES SET OUT IN POINT 3, SECTION II, PART B OF THIS CIRCULAR, AT THE SAME TIME IMPLEMENTING THE FOLLOWING MAIN CONTENTS:

- PRIORITY FUNDS TO IMPLEMENT THE TASKS OF CONSTRUCTING INFRASTRUCTURE, FOCUSING ON INVESTING IN KEY PROJECTS AND ENGINEERING WORKS OF THE LOCALITY (TRANSPORTATION, IRRIGATION, ENGINEERING WORKS SERVING STRUCTURAL ECONOMIC TRANSFORMATION, ENGINEERING WORKS TO MITIGATE THE EFFECTS OF NATURAL DISASTERS...); PROACTIVELY ALLOCATING LOCAL BUDGET FUNDS TO IMPLEMENT THE CONCRETIZATION OF CANALS AND RURAL ROADS; INFRASTRUCTURE FOR HANDICRAFT VILLAGES, TOURISM; DEVELOPING AGRICULTURAL AND ANIMAL BREEDING SEEDS; STRUCTURAL ECONOMIC TRANSFORMATION; PROMOTING COMMERCE, EXPANDING AND SEEKING EXPORT MARKETS; PAYING ATTENTION TO IMPLEMENTING THE TASKS OF ERADICATING POVERTY, CREATING EMPLOYMENT, AND HANDLING SOCIAL EVILS;...

- PROVIDE SUFFICIENT CO-FINANCING FUNDS FOR ODA PROJECTS OR COMPONENTS OF ODA PROJECTS IMPLEMENTED IN THE LOCALITY ACCORDING TO THE DECISION OF THE PRIME MINISTER; PROJECTS THAT MUST BE FUNDED FROM THE LOCAL BUDGET ACCORDING TO THE LOCAL REGULATIONS. PROACTIVELY CALCULATE AND ALLOCATE IN THE BUDGET FOR CONSTRUCTION INVESTMENT TO RESOLVE DEBT ISSUES FOR CONSTRUCTION INVESTMENTS AND DEBTS THAT MUST BE PAID WHEN DUE.

- ALLOCATE INVESTMENT EXPENDITURE FOR THE LOCAL INFRASTRUCTURE DEVELOPMENT CORRESPONDING TO THE LAND USE FEES COLLECTED IN 2008 AND FROM THE LAND USE FEES CARRIED FORWARD FROM THE PREVIOUS YEAR TO THE NEXT YEAR (IF ANY), AS PROVIDED BY THE REGULATIONS, TO INVEST IN ECONOMIC AND SOCIAL INFRASTRUCTURE PROJECTS AND RESIDENTIAL AND RELOCATION PROJECTS, AND TO PREPARE THE CONSTRUCTION SITE.

- DEVELOP A PLAN TO RAISE FUNDS FOR INFRASTRUCTURE INVESTMENT IN THE LOCALITY, ALLOCATE THE LOCAL BUDGET TO ENSURE FULL REPAYMENT OF THE AMOUNTS DUE (INCLUDING BOTH PRINCIPAL AND INTEREST) IN ACCORDANCE WITH THE REGULATIONS SET OUT IN CLAUSE 3, ARTICLE 8 OF THE STATE BUDGET LAW.

- ALLOCATE FUNDS TO IMPLEMENT RESOLUTION NO. 37/2004/QH11 OF THE NATIONAL ASSEMBLY ON EDUCATION, RESOLUTION OF THE 2ND PLANNING SESSION (TERM VIII) FOR THE FIELD OF SCIENCE AND TECHNOLOGY, RESOLUTION 41-NQ/TW OF THE PARTY POLITBUREAU ON ENVIRONMENTAL PROTECTION TASKS, AS PART OF THE LOCAL BUDGET EXPENDITURE.

- ALLOCATE FUNDS FOR THE LOCAL BUDGET RESERVE, SUPPLEMENT THE FINANCIAL RESERVE FUND IN ACCORDANCE WITH THE STATE BUDGET LAW, TO PROACTIVELY RESPOND TO NATURAL DISASTERS, FLOODS, EPIDEMICS, AND HANDLE EMERGENCY TASKS IN THE LOCALITY.

- FOR INFRASTRUCTURE INVESTMENT TASKS ACCORDING TO RESOLUTIONS 37/NQ-TW, 39/NQ-TW AND DECISIONS OF THE PRIME MINISTER SUCH AS DECISION NO. 168/2001/QĐ-TTg, DECISION NO. 120/2003/QĐ-TTg, DECISION NO. 134/2004/QĐ-TTg, BASED ON THE OBJECTIVES, TASKS, AND INVESTMENT CAPITAL NEEDS ALREADY DEFINED; BASED ON THE RESULTS OF INVESTMENT IN THE PERIOD 2001-2006, THE ABILITY TO IMPLEMENT IN 2007, LOCALITIES SHOULD BUILD AND CALCULATE THE TASKS FOR 2008, WHEREBY PROACTIVELY ARRANGE AND ORGANIZE THE LOCAL BUDGET AND OTHER SOURCES OF FUNDS IN ACCORDANCE WITH THE REGULATIONS TO IMPLEMENT THESE TASKS, AND ESTIMATE THE LEVEL OF CENTRAL BUDGET SUPPORT TO BE SUBMITTED WITH EXPLANATIONS OF THE CALCULATION BASIS.

- PREPARE THE BUDGET FOR EXPENDITURE IN 2008, LOCALITIES SHOULD PROACTIVELY CALCULATE AND ALLOCATE SOURCES TO IMPLEMENT SALARY REFORM EXPENDITURE AS GUIDED IN POINT 3.4, SECTION II, PART B OF THIS CIRCULAR.

C. IMPLEMENTATION:

1. MINISTRIES AND GOVERNMENT AUTHORITIES, ACCORDING TO THEIR FUNCTIONAL RESPONSIBILITIES, ARE RESPONSIBLE FOR BUILDING ECONOMIC AND SOCIAL INDICATORS IN THEIR RESPECTIVE FIELDS AND NOTIFYING THE MINISTRY OF FINANCE, MINISTRIES, CENTRAL AUTHORITIES, AND LOCALITIES BEFORE JULY 20, 2007, TO SERVE AS THE BASIS FOR THE PREPARATION OF THE 2008 STATE BUDGET.

2. THE MINISTRY OF PLANNING AND INVESTMENT SHALL TAKE THE LEAD, IN COOPERATION WITH THE MINISTRY OF FINANCE, TO PREPARE THE 2008 BUDGET FOR DEVELOPMENT INVESTMENT EXPENDITURE AND THE ALLOCATION PLAN FOR DEVELOPMENT INVESTMENT EXPENDITURE FOR SOME CENTRAL BUDGET FIELDS ASSIGNED TO BE SUBMITTED TO THE MINISTRY OF FINANCE BEFORE SEPTEMBER 10, 2007.

3. MINISTRIES AND CENTRAL AUTHORITIES MANAGING NATIONAL TARGET PROGRAMMES, PROGRAMME 135 (PHASE II), AND THE PROJECT TO PLANT 5 MILLION HA OF FORESTS SHALL COOPERATE WITH THE MINISTRY OF PLANNING AND INVESTMENT, THE MINISTRY OF FINANCE, AND RELATED MINISTRIES, SECTORS, AND AUTHORITIES TO ORGANIZE THE CONTENT OF THE PROGRAMME FOR THE PERIOD 2008-2010 AND TO ESTIMATE THE TASKS AND FUNDING FOR THE PROGRAMME IN 2008 AND THE PERIOD 2008-2010 TO BE SUBMITTED TO THE MINISTRY OF PLANNING AND INVESTMENT AND THE MINISTRY OF FINANCE BEFORE JULY 20, 2007; TO PREPARE THE BUDGET ALLOCATION PLAN FOR 2008 FOR EACH MINISTRY, CENTRAL AUTHORITY, AND EACH PROVINCE AND CITY DIRECTLY UNDER THE CENTRAL GOVERNMENT TO BE SUBMITTED TO THE MINISTRY OF FINANCE AND THE MINISTRY OF PLANNING AND INVESTMENT BEFORE JULY 30, 2007. AT THE SAME TIME, THEY SHALL PROACTIVELY DEVELOP AND ISSUE GUIDING DOCUMENTS WITHIN THEIR AUTHORITY TO COMPLETE IN 2007 AS THE BASIS FOR IMPLEMENTING THE PROGRAMMES AND PROJECTS IN ACCORDANCE WITH THE REGULATIONS.

4. MINISTRIES, CENTRAL AUTHORITIES, AND PEOPLE'S COMMITTEES OF PROVINCES AND CITIES DIRECTLY UNDER THE CENTRAL GOVERNMENT SHALL BASED ON THIS CIRCULAR AND THE CHECKED BUDGET REVENUE AND EXPENDITURE FIGURES FOR THE 2008 STATE BUDGET ANNOUNCED BY THE MINISTRY OF FINANCE, GUIDE AND ANNOUNCE THE CHECKED BUDGET REVENUE AND EXPENDITURE FIGURES FOR THE DIRECT SUBORDINATE BUDGET UNITS AND LOWER LEVEL BUDGETS IN ACCORDANCE WITH THE REGULATIONS.

MINISTRIES, SECTORS, AND LOCALITIES SHALL BASED ON THE SITUATION OF BUDGET REVENUE AND EXPENDITURE IMPLEMENTATION IN THE PERIOD 2001-2005 AND THE TWO YEARS 2006 AND 2007, THE DEVELOPMENT PLAN FOR THE PERIOD 2007-2010 AND THE YEAR 2008, IMPLEMENT THE PREPARATION OF THE 2008 BUDGET AND THE PLAN FOR BUDGET REVENUE AND EXPENDITURE FOR THE PERIOD 2008-2010 FOR THE ENTIRE SECTOR, FIELD UNDER THEIR MANAGEMENT ASSIGNMENT (INCLUDING DEVELOPMENT INVESTMENT EXPENDITURE, EACH FIELD OF REGULAR EXPENDITURE; BUDGET IMPLEMENTATION PLAN FOR THE TARGET PROGRAMMES DIRECTLY MANAGED) TO BE SUBMITTED TO THE MINISTRY OF FINANCE AND THE MINISTRY OF PLANNING AND INVESTMENT FOR COMPREHENSIVE REPORTING TO THE GOVERNMENT; SIMULTANEOUSLY SUBMIT TO THE NATIONAL AUDIT OFFICE.

The ministries, central agencies, and localities shall organize the work of building, compiling, and reporting the budget estimate for the year 2008 and the period 2008-2010 in accordance with the provisions of the State Budget Law, guiding documents, and the contents specified in this Circular; report fully the content and forms as prescribed in Circular No. 59/2003/TT-BTC dated June 23, 2003, of the Ministry of Finance, and related forms stipulated in this Circular (for ministries and localities piloting the preparation of medium-term financial plans and medium-term expenditure plans according to the guidance documents of the Ministry of Finance); submit to the Ministry of Finance before July 20, 2007 (for ministries and central agencies) and before July 25, 2007 (for provinces and centrally-administered cities).

5. The Ministry of Finance shall take the lead and coordinate with the Ministry of Planning and Investment to organize meetings to discuss the budget estimate for the year 2008 and the period 2008-2010 with economic groups and state-owned corporations from the end of June 2007, with ministries and central agencies, and with ministries and agencies managing national target programs, Program 135 (Phase II), and the project to plant five million hectares of new forests (operational expenses) from the end of July 2007 (specific meeting schedules will be announced later).

For localities, the budget estimate for the year 2008 is the budget year during the stabilization period as provided for in the State Budget Law. The Ministry of Finance shall conduct meetings with the People's Committees of provinces and centrally-administered cities to discuss the budget estimate for the year 2008 when requested by the People's Committees. Localities requesting meetings on the budget estimate for the year 2008 are advised to register their schedules with the Ministry of Finance before July 25, 2007, to arrange (expected completion time before September 1, 2007), ensuring sufficient time for compilation, reporting to the Government and National Assembly agencies about the State Budget Estimate for the year 2008.

6. The General Department of Taxation and the General Department of Customs have the responsibility to provide detailed guidance on this Circular to subordinate units to implement the construction, compilation, and reporting of the revenue estimate for the State Budget for the year 2008 and the period 2008-2010 within their assigned areas; proactively organize meetings with provincial and centrally-administered city tax bureaus and customs offices regarding the revenue budget estimate for the year 2008 and the period 2008-2010 as prescribed.

7. Regarding the forms for preparing and reporting the budget estimate for the year 2008 and the period 2008-2010:

- For ministries and central agencies, compile and report to the Ministry of Finance the State Budget estimate according to the forms and deadlines set out in Circular No. 59/2003/TT-BTC dated June 23, 2003, of the Ministry of Finance, supplementary forms (Form Nos. 2, 4) stipulated in this Circular, and forms prescribed in Joint Circular No. 03/2006/TTLT-BTC-BNV dated January 17, 2006, of the Ministry of Finance and the Ministry of Home Affairs guiding the implementation of Decree No. 130/2005/NĐ-CP dated October 17, 2005, of the Government, and Circular No. 71/2006/TT-BTC dated August 9, 2006, of the Ministry of Finance guiding the implementation of Decree No. 43/2006/NĐ-CP; pay particular attention to preparing detailed budget estimates down to each direct budget-using unit (according to Form No. 02 - Appendix No. 2 - Circular No. 59/2003/TT-BTC) and important tasks of ministries and agencies to prepare explanations for reporting to the National Assembly on the budget estimate of each ministry and agency; after the Prime Minister allocates the budget estimate for the year 2008, allocate and assign the budget estimate to budget-using units before December 31, 2007, in accordance with the State Budget Law.

- For localities: Compile and prepare the local budget estimate, report to the Ministry of Finance according to the forms (Form Nos. 01, 02, 06, 07, 10, 12, 13, 14, 16, 17, 18, 19, 20, 21, 22, 23 - Appendix No. 6) and deadlines set out in Circular No. 59/2003/TT-BTC dated June 23, 2003, of the Ministry of Finance, and supplementary forms (Form Nos. 1, 3, 5, 6, 7, 8, 9, 10) stipulated in this Circular.

This Circular shall take effect fifteen days from the date of publication in the Official Gazette.

During the process of constructing the budget estimate for the year 2008 and the period 2008-2010, especially the year 2008 when new policies and regulations are issued, the Ministry of Finance will issue additional guidance notices; in organizing the construction of the budget estimate for the year 2008 and the period 2008-2010, if there are any difficulties, ministries, central agencies, localities, economic groups, and state-owned corporations are advised to reflect these issues to the Ministry of Finance for timely resolution.