Circular No. 69-TC/NSNN of the Ministry of Finance dated April 18, 1997 on guiding the implementation of the State Budget Itemization

LETTER

OF THE MINISTRY OF FINANCE NO. 69 TC/NSNN ON APRIL 18, 1997
GUIDING THE IMPLEMENTATION OF THE STATE BUDGET OUTLINE
STATE BUDGET

Respectfully submitted to: - Ministries, General Departments, State Committees, subordinate agencies

of the Government (Financial Accounting Department),

- Central Party and mass organizations,

- Provincial Departments of Finance and Prices, State Treasury, Investment and Development Bureau, State Capital and Asset Management Bureau at enterprises, and Tax Bureaus of provinces and centrally governed cities,

The State Budget Outline issued pursuant to Decision No. 280 TC/QĐ/NSNN dated April 15, 1997 by the Minister of Finance shall take effect from January 1, 1997. In order to facilitate the budgetary units under central and local authorities, state-owned enterprises belonging to various economic sectors, financial agencies, treasury agencies, and tax agencies at all levels in uniformly accounting for and settling revenues and expenditures according to the State Budget Outline, the Ministry of Finance hereby guides the implementation of the State Budget Outline as follows:

A. GENERAL PROVISIONS

I. Chapter: Represents the name of the leading unit at each level of management (also known as Level I unit); all revenues and expenditures generated by subordinated units under the Level I unit shall be accounted for, recorded, and settled under the chapter code of the Level I unit.

Within the Chapter, there are certain special Chapters defined to monitor and account for State Budget revenues and expenditures of economic zones, economic components, revenues with undetermined ownership; inter-budgetary payment relationships for common tasks that cannot be accounted for under any Chapter, and inter-budgetary transfer payments between levels.

1. Chapter A: Specifies the accounting for State Budget revenues and expenditures of units under central management.

2. Chapter B: Specifies the accounting for State Budget revenues and expenditures of units under provincial government management.

3. Chapter C: Specifies the accounting for State Budget revenues and expenditures of units under district government management.

4. Chapter D: Specifies the accounting for State Budget revenues and expenditures of units under commune government management.

II. Class - Item: Is a form of classification of the State Budget according to national economic sectors.

1. Class: Specifies the accounting for national economic sectors at Level I as promulgated by Decree No. 73/CP dated October 27, 1993 of the Government (comprising 20 national economic sectors at Level I).

2. Item: Specifies the accounting for national economic sectors at Levels II, III, and IV as promulgated by Decision No. 143/TCKT-PPQD dated December 22, 1993 of the General Statistics Office. However, due to management requirements and monitoring of State Budget expenditures for programs and objectives, the Ministry of Finance has specified certain special Items within Classes to account for and settle State Budget expenditures for programs and objectives; if a program or objective belongs to a particular Class, an Item will be opened within that Class for accounting purposes.

III. Group, Subgroup, Article, and Subarticle: Is a form of classification according to economic content; based on the economic content of State Budget revenues and expenditures, they are organized and grouped accordingly.

1. Group and Subgroup: Is a form of classification according to high-level economic content to serve macroeconomic management, forecasting, and analysis.

2. Article and Subarticle: Is a form of classification according to lower-level economic content to serve budget preparation and allocation; issuance, management, and control of State Budget revenues and expenditures; accounting and settlement of the State Budget. The continuous coding of Articles aims to facilitate the application of information technology in budget preparation, execution, accounting, and settlement. Therefore, when accounting for State Budget revenues and expenditures, it is only necessary to accurately record up to the Article level to obtain results of State Budget revenues and expenditures according to Groups and Subgroups.

Within an Article, there are Subarticles; the number of Subarticles within an Article is determined based on its content; Subarticle 15 in Articles reflects the revenue and expenditure contents not covered by other Subarticles within that Article.

* Central and local agencies, financial agencies, treasury agencies, and tax agencies at all levels shall not open additional Chapters, Classes, Items, Groups, Subgroups, Articles, and Subarticles without the approval of the Ministry of Finance.

B. CONTENTS OF ACCOUNTING

The Ministry of Finance guides the accounting of certain Chapters, Classes, Items, Articles, and Subarticles with special characteristics as follows:

I. Regarding Sections

1. Chapter 014A "Ministry of Justice" specifies the accounting for State Budget revenues and expenditures of the Ministry of Justice and its subordinate units, including those of provincial and district People's Courts.

2. Chapter 150 (A, B, C, D) "Other Units" specifies the accounting for State Budget revenues and expenditures of units under the same level of government management but not listed in the prescribed Chapter directory, such as political-social organizations, social organizations, and occupational-social organizations; newly established units...

3. Chapter 151A "Foreign-Invested Economic Units" specifies the accounting for State Budget revenues and expenditures of foreign-invested projects or representative offices, branches of companies... with 100% foreign capital operating under the Investment Law (regardless of whether they are under central or local management).

4. Chapter 152A: Specifies the accounting for State Budget revenues and expenditures of joint ventures with partial foreign investment under central management.

5. Chapter 152B: Specifies the accounting for State Budget revenues and expenditures of economic units with partial state investment under local government management.

6. Chapter 154 (A, B, C, D) "Mixed Economy" specifies the accounting for State Budget revenues and expenditures of joint ventures with partial foreign investment, including joint-stock companies and limited liability companies. Based on the proportion of state-owned enterprise capital contributions at different levels, they are accounted for under Chapters A, B, C, D respectively. For example, joint-stock companies or limited liability companies where the proportion of central state-owned enterprise shares is large are accounted for under Chapter 154A, where the proportion of provincial state-owned enterprise shares is large are accounted for under Chapter 154B...

7. Chapter 155B, 156B, 157B "Private Economy", "Collective Economy", "Individual Economy". For the convenience of accounting, financial reporting, and finalizing state budget reports, but without affecting the monitoring, management, and distribution of revenue adjustment ratios among levels of the state budget; all revenues and expenditures from the state budget of private economic units, collective economic units, and individual economic units, regardless of whether they are under provincial, district, or commune-level management, shall be recorded and settled in the corresponding Chapter B. However, revenues from various types of fees collected by communes and wards shall not be recorded in Chapters 155B, 156B, 157B but shall be recorded in Chapter 018D-Category, Subcategory, Section, and Subsection accordingly.

8. Chapter 160 (A, B, C, D) "Other Budget Relations" is specified for recording grants; loan receipts; surplus revenues from previous years' budgets; revenue mobilization; revenues whose owners cannot be identified; transfers between different levels of the budget; supplementary budget expenditures from higher levels to lower levels; debt repayment by the State; supplementary funding for the financial reserve fund; and other budget expenditures assigned to local authorities at various levels for units managed by other levels of authority within their jurisdiction.

II. Regarding Category - Subcategory:

1. For revenues from entities, organizations, and individuals simultaneously engaged in production and business activities across multiple industries, when submitting to the state budget, the main industry recorded in the business registration of the entity shall be used to determine the corresponding Category - Subcategory for recording (except for revenue from import-export business activities already recorded in Category 07-Subcategory 01).

2. For budget revenues allocated by the state to a single budgetary unit to carry out different expenditure tasks; when expending, the allocation based on the budgetary plan will be recorded according to the corresponding Category and Subcategory.

Example: Budgetary unit X was allocated a budget for expenditures in 1997 to perform the following tasks:

- Administrative expenses Recorded in Category 13-Subcategory 01

- Scientific research expenses Recorded in Category 11-Subcategory corresponding

- Training expenses Recorded in Category 14-Subcategory corresponding

- Program and target expenses Recorded in the corresponding Category-Subcategory

...

3. For primary and secondary schools that have not yet been separated, when allocating funds, the category with the higher proportion of funds will be used to record in Category 14-Subcategory corresponding. For example, if the education budget for primary school has a higher proportion, it will be recorded in Category 14-Subcategory 02.

4. Funds allocated for programs and targets: Based on the content of the program or target, they will be recorded according to the corresponding Category-Subcategory.

Example:

5. For revenues and expenditures from state budget units in the insurance business, they shall be recorded in Category 10-Subcategory 02; units operating in social insurance and health insurance fields shall be recorded in Category 13-Subcategory 08.

III. Regarding Section and Subsection

- Section 001 - Subsection 15 "Irregular Income" reflects income from individuals with irregular income such as lottery winnings, gifts, etc., which must be taxed according to the Ordinance on Income Tax for High-Income Individuals.

- Section 002 - Subsection 01 "Income Tax from Business Activities" excludes income tax from crude oil, which has been reflected in Section 027 - Subsection 02.

- Section 009 "Land Use Fee Revenue" reflects the amount of money paid to the state budget by those who have been granted land use rights according to the prescribed regulations.

- Section 012 - Subsection 01 "Petroleum" excludes natural resource taxes from crude oil, which have been reflected in Section 027 - Subsection 01.

- Subsection 15 of Section 019 "Export Tax" and Section 020 "Import Tax" does not reflect other revenues from the Customs sector (other revenues from the Customs sector are recorded in the corresponding Section and Subsection).

- Section 021 - Subsection 01 "Revenue from Public Services" reflects revenues from public service units that have income after completing their tax obligations and establishing funds according to current regulations, the remaining amount to be paid to the state budget, and revenues from selling products of these units such as proceeds from selling products after completing trial production and testing tasks of scientific research units and experimental products of schools...

- Section 025 "Recovery of Capital from Enterprises" includes recovery of excess working capital, refund of state-owned enterprise capital except for proceeds from the sale of goods and specialized reserve materials already accounted for in Section 064.

- Section 044 - Subsection 06 "Export Coffee Fee for Annual Registration" reflects the fee collected immediately upon export procedures (according to Circular No. 591 TC/TCĐN dated February 22, 1997 of the Ministry of Finance).

- Section 051 - Subsection 02 "Traffic Violation Fines" includes fines for violations of traffic order and safety on roads, urban areas, railways, inland waterways pursuant to Decrees 36, 39, and 40 of the Government.

- Section 052 "Revenue from Confiscation" includes both monetary confiscation and confiscated items converted to money.

- Section 053 - Subsection 01 "Infrastructure Construction" includes revenue from mobilizing public welfare funds.

- Section 056 "Revenue from Lower Levels Transferred Upward" includes revenues from lower-level budgets transferred upward due to incorrect implementation of the distribution ratio, which should not be accounted for in this section when received by higher-level budgets.

- Section 062 "Other Revenue"

+ Subsection 02 "Recovery of Expenditures from Previous Year" includes recoveries of expenditures previously allocated by the state budget to budgetary units that were settled in the previous fiscal year, where during audits, inspections, and audits, there are decisions to reverse accounting entries, recover and remit to the state budget, and recover proceeds from selling unused inventory materials that were settled in the previous year's budget expenditure (excluding recoveries of fixed assets liquidation already accounted for in Sections 067 and 068).

+ Subsection 03 "Revenue from Previous Year's Budgets Transferred Upward" includes revenues from previous years' budgets due to incorrect implementation of the distribution ratio transferred to the next year, which are remitted by higher or lower-level budgets.

- Section 063 "Revenue from Sale of State-Owned Goods and Materials" is exclusively for the National Reserve Corporation to account for proceeds from the sale of state-owned goods and materials to be remitted to the state budget.

- Section 064 "Revenue from Sale of Specialized State-Owned Goods and Materials" reflects proceeds from the sale of specialized state-owned goods and materials by various sectors.

- Section 067 "Revenue from Sale of State-Owned Property"

+ Subsection 01 "Revenue from Sale of State-Owned Housing" includes proceeds from land use tax, land transfer tax, and land use fees.

+ Subsection 02 "Revenue from Liquidation of Office Buildings" reflects proceeds from liquidating office buildings, hospitals, schools, warehouses, stations, camps, etc., excluding land use tax, land transfer tax, and land use fees.

- Section 102 - Subsection 08 "Special Allowances for Sectors" includes salary allowances for education, health, meteorology and hydrology sectors; hazardous job allowances for defense, security, and other sectors (if applicable).

- Section 103 "Scholarships for Students" includes vocational training allowances.

- Section 104 "Bonuses" applies only to units with bonus systems as prescribed by the state and funded by the state budget; if bonuses are sourced from other funds as prescribed by regulations, they should also be accounted for in this section but must be separately tracked and reported according to the source of funding used.

- Section 105 "Collective Welfare" reflects expenditures on welfare benefits for state officials and employees as stipulated by current state regulations. Expenditures on drinking water and ordinary medical expenses are accounted for in Subsection 15.

- Section 106 "Contributions" only reflects the portion of the state budget funds allocated to employing units for contributions to various funds; the portion contributed by employees deducted from their salaries is not accounted for in this section since the unit merely acts as an intermediary.

- Section 107 "Expenditure for Village Cadres" only reflects living expense allowances for incumbent village cadres as stipulated by regulations and additional allowances (re-election allowance, mountain commune cadre travel expenses, training allowance, etc.).

- Section 108 "Other Payments to Individuals" includes expenditures from the state budget for payments to state officials and other eligible recipients as stipulated by regulations, arranged within the budget but not yet accounted for under Subgroup 20 "Payments to Individuals."

+ Subsection 01 "Meal Allowance" includes expenditures from the state budget for individuals entitled to meal allowances as stipulated, such as non-commissioned officers, soldiers, athletes, coaches, and state officials working in special fields (excluding meal expenses for social institutions and prisoners in detention centers).

+ Subsection 02 "Other Allowances and Subsidies" includes expenditures from the state budget for state officials assigned specific tasks, who in addition to regular salary, allowances, and travel expenses, receive additional allowances and subsidies as decided by competent authorities, such as prosecutor sitting allowance, anti-evaporation allowance, petty cash allowance for non-commissioned officers and soldiers, rank and service allowance, and other sector-specific allowances (if applicable).

- Section 109 "Payment for Public Services" includes expenditures for electricity, water, fuel, and environmental sanitation services for public service agencies.

+ Subsection 04 "Environmental Sanitation Payment" reflects payments to environmental sanitation companies for services such as cleaning sewers, garbage, manure, etc. (office sanitation expenses are not accounted for in this section but in corresponding sections).

- Section 110 "Office Supplies" includes expenditures from the state budget for purchasing office supplies, books, documents, ledgers, tools, and inexpensive consumable items for office operations.

- Section 111 "Information, Propaganda, Communication" includes budget expenditures for postal charges, telephone fees, satellite channel rental fees, expenses related to information work, propaganda, advertising, document translation, publication of communication materials; purchasing newspapers, magazines, books for libraries, archives, museums, club activities, traditional activities of various sectors, expenses for purchasing and restoring artifacts of conservation institutions, museums... (excluding budget expenditures for commemorating major holidays which have been accounted for in Section 134 - Subsection 04).

- Section 112 "Conference" includes expenditures for mid-term and final summary meetings, vocational training sessions, specialized seminars...

Subsection 03 and Subsection 04: expenses for air tickets, car, train tickets; accommodation costs for invited delegates who do not receive salaries from the state budget (if invited delegates receiving salaries from the state budget are accounted for in Section 113 according to corresponding sub-sections).

- Section 114 "Lease Expenses" includes expenditures related to leasing services to support operations and fulfill tasks and professional work of the unit (excluding lease expenses already accounted for in Sections 112, 117, 118, 119).

+ Subsection 01 "Transport Vehicle Lease" includes leasing cars, motorcycles, special-purpose vehicles, ships, boats...

+ Subsection 02 "Building Lease" includes leasing office space, classrooms, conference halls, warehouses, stations, camps...

+ Subsection 07 "Domestic Labor Hire" reflects expenses for hiring domestic labor to perform tasks supporting professional work such as loading and unloading, transportation...

+ Subsection 08 "Re-training State Civil Servants" includes expenses related to re-training civil servants such as classroom rental fees; purchasing learning materials and equipment; hiring teachers or transferring payment for civil servant training to centralized training schools.

- Section 117 "Regular Maintenance Costs for Fixed Assets Serving Professional Work and Infrastructure Maintenance and Repair" includes expenditures for purchasing raw materials, fuel; purchasing spare parts and replacement equipment; hiring labor and renting transportation, machinery, and equipment for regular maintenance of fixed assets and infrastructure (including payments for outsourcing contracts for regular maintenance and repair).

+ Subsection 09 "Housing" includes residential housing, office space, schools, hospitals, warehouses, stations, camps...

- Section 118: "Major Repairs for Fixed Assets Serving Professional Work and Infrastructure" includes expenditures for purchasing raw materials, fuel, equipment, spare parts; hiring labor and renting transportation, machinery, and equipment to carry out major repairs on fixed assets and infrastructure (including payments for outsourcing contracts for major repairs on fixed assets and infrastructure).

- Section 119 "Professional Expenditures of Each Sector" includes expenditures for purchasing non-fixed specialized technical equipment and other expenses serving the professional activities of each sector that have not been accounted for under Subgroup 21 "Expenditures on Goods and Services".

+ Subsection 01 "Materials" includes expenditures for purchasing materials serving the professional work of each sector such as: purchasing medicines and chemicals for hospitals, health stations, clinics, rehabilitation centers; purchasing materials for storage warehouses, chemicals for preserving materials and goods stored by the sector, purchasing fresh water for officers and soldiers working outside islands... and materials of other sectors (if applicable).

+ Subsection 02 "Specialized Technical Equipment" includes expenditures for purchasing specialized technical equipment serving professional work but not being fixed assets such as: school equipment, sports equipment, medical equipment, security and defense equipment (including service dogs and horses) and specialized technical equipment of other sectors (if applicable).

+ Subsection 13 "Expenses for Prisoner Care and Custody" includes expenditures related to food and clothing for prisoners (other related expenditures for prison facilities have been accounted for in corresponding expenditure sections).

+ Subsection 14 "Contract Payment for Outsourced Investigation, Survey, Planning, Scientific Research" reflects payments made according to outsourced contracts (if the unit carries out these tasks itself, they are accounted for in corresponding sections and subsections). Payments made according to contracts with external parties related to regular maintenance, upkeep, repair, and major repairs of fixed assets are not accounted for in this section but are accounted for in corresponding subsections of Sections 117 and 118.

+ Subsection 15 "Other Professional Expenses of Each Sector" includes expenditures for goods and services to implement the professional tasks of each sector under Section 119 but not accounted for in the above subsections.

- Section 120 "Support for Collective Economy and Community" reflects state budget expenditures to support the collective economy and community.

+ Subsection 01 "Relocation Expenses" reflects expenses for transporting and relocating people; transportation costs and subsidies provided to people according to regulations.

+ Subsection 02 "Support for Cooperative Forms" reflects state budget expenditures to support capital, pesticides, fertilizers... for production (including support for cooperatives to mitigate the consequences of natural disasters).

+ Subsection 03 "Subsidies for Communities" reflects state budget subsidies for relief and famine assistance to communities (including subsidies for communities to mitigate the consequences of natural disasters).

- Section 122 "Social Work Expenditures" reflects expenditures for social groups benefiting from state policies according to current regulations (including allowances for retired village cadres).

+ Subsection 03 "Medical Transportation Expenses" includes expenses for transportation for war invalids, disabled veterans, and persons entitled to benefits similar to war invalids for medical examinations, treatment, disability assessment, and family visits as stipulated by the state.

+ Subitem 04 "Orthopedic Devices" includes expenses for orthopedic devices for war invalids and disabled persons: artificial limbs, orthopedic braces, orthopedic jackets, wheelchairs, walking aids, and other orthopedic devices...

+ Subitem 06 "Living Expenses for Residents" includes expenses according to the standard quota regulations, including food expenses for social groups under centralized management institutions.

+ Subitem 07 "Costs for Collecting Graves" includes costs for collecting, building tomb covers, repairing graves, and surveying and searching for martyrs' graves.

+ Subitem 08 "Repair, Upgrade, and Commemorative Monuments" includes costs for repairing, upgrading, and supporting the construction of cemeteries, commemorative monuments, and houses with plaques commemorating martyrs.

+ Subitem 10 "Gift and Festival Costs for Policy Beneficiaries" includes gift-giving costs, additional meal expenses on holidays for policy beneficiaries.

+ Subitem 14 "Medical Treatment and Rehabilitation" includes expenses for medical treatment, rehabilitation, and special medications for policy beneficiaries as prescribed.

+ Subitem 15 "Other" includes support costs for war invalids' families; funeral expenses for policy beneficiaries; visiting martyrs' graves; providing supplies for wounded and sick veterans based on their disabilities; purchasing initial personal items for individuals admitted to medical facilities; printing files and documents for policy beneficiaries...

- Item 127 "Aid Expenses" reflects expenses from the State Budget for training, healthcare, culture, procurement of machinery and equipment... for Laos (L), Cambodia (K), and other countries.

- Item 131 "Expenses for Handling Assets Established as State Property" reflects expenses for preserving, transporting, exploiting... unclaimed assets, archaeological finds...

- Item 133 "Expenses Paid to Higher Level Budgets." Payments to higher level budgets or lower level budgets due to incorrect apportionment ratios not recorded in this Item but recorded in Item 132.

- Item 134 "Other Expenses" includes other state budget expenses at various levels and expenses for fees, insurance for assets and means of transportation, hospitality expenses... of budgetary units at various levels not recorded in Items under Group 6 "Regular Expenses."

- Item 147 "Construction and Installation Expenses"

+ Subitem 15 "Other Expenses" includes the following expenses: land leveling costs for construction; temporary construction project costs; auxiliary programs serving construction phases (construction roads, electricity, water, temporary workshops, temporary housing for construction management...); costs for moving construction equipment and labor forces (if applicable).

- Item 148 "Equipment Expenses"

+ Subitem 01 "Procurement Expenses" includes expenses for purchasing equipment according to invoice prices.

+ Subitem 02 "Custom Installation and Setup Expenses for Non-standard Equipment" includes expenses to modify non-standard equipment to meet standards before use.

+ Subitem 15 "Other Expenses" includes transportation, storage, maintenance costs for machinery at the site, insurance costs for construction equipment...

- Item 149 "Other Expenses"

+ Subitem 01 "Expenses According to Prescribed Unit Price Ratios" includes the following expenses: investment consulting costs (feasibility study reports (Group A) or detailed feasibility studies (Groups B, C); technical design and construction protection costs, review and approval of project design and total estimate costs; project management costs (for project management staff, tender preparation and evaluation; cost estimation and review of unit price estimates for projects...); costs for project audit and settlement, site cleanup, project acceptance, inauguration, handover, and project insurance costs.

+ Subitem 02 "Survey and Data Collection Expenses" includes expenses for surveys, data collection for pre-investment and investment stages.

+ Subitem 15 "Other" includes expenses for promoting and advertising projects; demolition and clearing of old structures and construction sites before and after construction (excluding recoverable values); expenses for groundbreaking ceremonies...

IV. Points to Note When Recording Certain Revenue and Expenditure Items:

1. Personal income tax payments to the state budget, whether made by the individual or by the entity acting on behalf of the individual, must be recorded under Chapter 157B - Class 10 - Clause 5 - Item and Subitem corresponding (except for commune and ward fees which should be recorded under Chapter 018D for separate tracking since commune and ward fee revenues are not included in the non-state sector revenue budget).

2. Back taxes, fees, and depreciation recovered from previous years according to decisions by authorized bodies, when paid to the state budget, must be recorded under the corresponding Chapter - Class - Clause - Item and Subitem.

3. State budget expenditures by local authorities to implement tasks assigned to budgetary units managed by other local authorities within their jurisdiction must be recorded under Chapter 160 (ABCD) - Class - Clause - Item - Subitem corresponding.

Example: Provincial budget expenditure:

- Training of civilian militia personnel recorded under Chapter 160B - Class 13 - Clause 06 - Item 119 - Subitem 15.

- Support costs for regular maintenance of temporary detention facilities for the security sector recorded under Chapter 160B - Class 13 - Clause 07 - Item 117 - Subitem 09.

Central and local agencies, financial agencies, state treasury agencies, and all levels of revenue collection agencies are responsible for disseminating guidance to subordinate units on recording, accounting, and settling state budget revenues and expenditures according to the instructions in this circular. Any previous circulars that contradict this circular are nullified. In case of difficulties during implementation, please report to the Ministry of Finance for further guidance.