Circular No. 67/2003/TT-BTC guiding the financial mechanism applicable to Market Management Boards and businesses engaged in operating and managing markets.

CIRCULAR

         Guidelines for the financial mechanism applicable to Market Management Boards,

              business entities engaged in operating and managing markets

Based on Decree No. 178/CP dated 28/10/1994 of the Government on tasks, authorities, and organizational structure of the Ministry of Finance;

Based on Decree No. 02/2003/NĐ-CP dated 14/01/2003 of the Government on market development and management;

To contribute to strengthening the work of market development and management, the Ministry of Finance issues guidelines for the financial mechanism applicable to Market Management Boards,  business entities engaged in operating and managing markets as follows:

A. General Provisions:

1. These Circulars apply to Market Management Boards and business entities  engaged in operating and managing markets for the types of markets specified in Clause 2, Article 1 of Decree No. 02/2003/NĐ-CP dated January 14, 2003 of the Government on market development and management; they do not apply to supermarkets, shopping centers, trading centers for goods (including foreign-invested supermarkets and shopping centers).

2. The Market Management Board of type 1, type 2, and type 3 markets as defined in Decree No. 02/2003/NĐ-CP dated January 14, 2003 of the Government is a revenue-generating public service unit that self-funds all operational costs. For type 1 and type 2 markets, the Market Management Board shall apply the financial mechanism as prescribed in Decree No. 10/2002/NĐ-CP dated January 16, 2002 of the Government on the financial regime for revenue-generating public service units and related guiding documents. For type 3 markets, the Market Management Board operates as a revenue-generating public service unit; the contents of income, expenditure, management, and utilization of income and expenditure are regulated in this Circular.

3.  Business entities engaged in operating and managing markets are commercial entities established, registered for business, and operate according to current laws.

B. Specific Provisions:

I. Revenue from market operations:

The Market Management Board, business entities engaged in operating and managing markets  may collect the following revenues:

1. Revenue from leasing and using business points at the market; providing services and goods:

Revenue from leasing and using business points at the market according to the business point usage and lease contracts;

Revenue from providing cargo handling, storage, and security services according to specific contracts and other services;

Other revenue: Revenue retained according to agency collection contracts (fees, electricity, water charges, and other charges related to market business activities...); penalty and contract breach compensation revenue (if any) collected from organizations and individuals participating in market business activities due to violations of economic contracts signed with the Market Management Board, business entities engaged in operating and managing markets.

2. Fees as prescribed in the Law on Fees and Charges dated August 28, 2001, including:

Market fees;

Parking fees;

Sanitation fees;

The levels of these fees are determined by the People's Councils of provinces and centrally-administered cities under the general guidance of the Ministry of Finance.

Fire prevention and firefighting fees: Levels and methods of collection and payment are regulated by the Ministry of Finance.

The management and use of these fees must be carried out in accordance with the law on fees and charges, specifically:

For markets built with state investment, the aforementioned fees are state budget revenues. The Market Management Board, business entities engaged in operating and managing markets are entitled to retain a portion of the collected fees to cover the costs of fee collection. The amount of retained fees is decided by the competent authority according to Circular No. 63/2002/TT-BTC dated 24/7/2002 of the Ministry of Finance guiding the implementation of laws on fees and charges. The Market Management Board, business entities managing and operating markets have the responsibility to declare, pay, and settle the remaining fee amounts into the state budget.

For markets not built with state investment or built with state investment but transferred to the Market Management Board or business entities for operation and management, the fees prescribed in this Circular are non-state budget fees. The Market Management Board, business entities engaged in operating and managing markets are required to pay taxes on the collected fees according to the law and have the right to manage and use the remaining fee amounts after tax payment.

II. Management and Utilization of Revenues and Expenditures at Markets:

1. Market Management Board:

1.1. The Market Management Board may use the revenues listed in Section I of this Circular for the following expenditures:

a/ For type 1 and type 2 markets:

Expenditure to repay capital invested in market construction.

Expenditure for labor costs: Wages, salaries, meal allowances, salary supplements, social insurance contributions, health insurance contributions, trade union fees as prescribed.

Administrative management expenditure: Office supplies, electricity, water, communication, meetings, annual summaries, regular maintenance of facilities: buildings, machinery, equipment...

Expenditure for revenue collection activities (including agency collection contract activities);

Expenditure for service provision activities (including tax payments, depreciation of fixed assets),

Other expenditures.

The Market Management Board shall implement the financial regime for revenue-generating public service units as prescribed in Circular No. 25/2002/TT-BTC dated March 21, 2002 of the Ministry of Finance guiding the implementation of Decree No. 10/2002/NĐ-CP dated January 16, 2002 of the Government and related guiding documents of the Ministry of Finance.

b/ For type 3 markets:

Expenditure to repay capital invested in market construction;

Expenditure for labor costs;

Administrative management expenditure: Office supplies, electricity, water, communication, regular maintenance of facilities: buildings, machinery, equipment...

Expenditure for revenue collection activities (including agency collection contract activities);

Expenditure for service provision activities (including tax payments, depreciation of fixed assets);

Other expenditures.

The Market Management Board may use the revenues to cover the stipulated expenditures, and the remaining revenues shall be paid into the state budget according to the current hierarchical budget management regulations.

1.2. Management, utilization, and settlement of revenues and expenditures of the Market Management Board:

Annually, the Market Management Board prepares budgets, reports on revenue and expenditure settlements for operational expenses, and submits them to the competent authority for approval according to the hierarchical market management regulations stipulated in Article 15 of Decree No. 02/2003/NĐ-CP dated 14/01/2003 of the Government on market development and management.          

The market management board shall carry out accounting, statistics, and financial reporting in accordance with the State regulations on accounting and statistical systems applicable to administrative and service units.

2. Business entities engaged in operating and managing markets:   

Business entities engaged in operating and managing markets are entitled to collect revenues as specified in Section I of this Circular.

Business entities engaged in operating and managing markets must develop business plans and financial schemes for their operations. The development of financial schemes is based on revenue sources to cover expenses such as repayment of capital investment in market construction, necessary operational costs of the business.

Depending on the organizational form (business entity, cooperative, joint-stock company) and scale of operation of various types of markets, business entities engaged in operating and managing markets shall apply current regulations appropriate to each form to organize accounting, statistics, management, and utilization of revenues and expenditures related to business activities.

Business entities engaged in operating and managing markets must implement the final accounts settlement and corporate financial reporting system in accordance with legal provisions.

III. Responsibilities of the Market Management Board and business entities engaged in operating and managing markets towards financial authorities, local tax offices, and organizations and individuals conducting business in the market:

1. With respect to financial authorities: Based on current legal provisions and guidance from local financial authorities, the Market Management Board and business entities engaged in operating and managing markets have the responsibility to:

Collect revenues such as rental fees and usage fees for trading points at the market to repay state budget investments, credit support, and loaned credit funds for new construction, renovation, and repair of the market (if applicable).

Implement financial management in accordance with this Circular and guidance from local financial authorities.

2. With respect to tax authorities: The Market Management Board and business entities engaged in operating and managing markets have the responsibility to:

Register, declare, and pay taxes and other amounts due (if any) in accordance with legal provisions.

Cooperate with tax authorities in organizing the collection of revenues based on agency commission agreements signed between both parties.

3. With respect to organizations and individuals conducting business in the market:

Based on legal provisions, the Market Management Board and business entities engaged in operating and managing markets must create favorable conditions for organizations and individuals conducting business in the market to operate smoothly, ensuring environmental hygiene, market security, etc.

Promote, disseminate, and urge organizations and individuals conducting business in the market to comply with legal regulations.

IV. Implementation Organization:

The Chairperson of the People's Committees of provinces and centrally-administered cities shall direct People's Committees at all levels and Departments of Finance-Price to implement the guidance contents stipulated in this Circular.

Local financial authorities shall be responsible for guiding the Market Management Board and business entities engaged in operating and managing markets to properly implement financial management in accordance with legal provisions and guidance provided in this Circular.

This Circular takes effect fifteen days after its publication in the Official Gazette. During implementation, if there are difficulties or obstacles, they should be promptly reported to the Ministry of Finance for review and amendment as appropriate./.