Circular No. 73/TC-TCNH guides the financial management for the Farmers Support Fund of the Vietnam Farmers' Union, stipulating non-profit business activities, financial autonomy, and proper use of capital. The Fund collects fees from farmers' loans, records accounts and settles accounts according to the Accounting and Statistics Decree, implements annual financial plans.
Scope of application
The Farmers Support Fund of the Vietnam Farmers' Union
Key points
- The Fund does not engage in profit-making business activities and has financial autonomy, thus it is exempt from paying taxes to the State.
- Operating capital comes from sources such as fundraising, international aid, and State entrustment. It is not allowed to raise funds through savings deposits or commercial loans.
- Capital is used to support farmers, especially poor households, with a fee rate not exceeding 1.2% per month, differentiated by region and target group.
- Fees collected from farmers' loans are allocated to investment construction funds, rewards, welfare, and loan assistance.
- Financial accounting and settlement are conducted according to the Accounting and Statistics Decree, implementing quarterly and annual reports and subject to financial authority inspections.
🌐 Social impact of this document
- Creating a source of capital to support farmers in developing production and reducing poverty.
- Reducing tax burdens on the Fund, creating conditions for financial autonomy.
- Allocating costs reasonably, preserving and enhancing operating capital.
❓ Frequently asked questions
Where does the Farmers Support Fund obtain its operating capital from?
The Fund's operating capital is formed from sources such as fundraising, international aid, and State entrustment. It is not allowed to raise funds through savings deposits or commercial loans.
What is the fee rate when the Fund lends to farmers?
The fee rate does not exceed 1.2% per month, differentiated by region and target group. A lower fee rate applies to poor households compared to non-poor households.
Does the Farmers Support Fund have to pay taxes to the State?
No, the Fund bears responsibility for its operations under the Law and has financial autonomy, thus it is exempt from paying taxes to the State budget.
What is the process for financial accounting and settlement?
The Fund conducts accounting according to the Accounting and Statistics Decree, implements quarterly and annual reports, and submits them to the Ministry of Finance and the Central Committee Executive Board of the Vietnam Farmers' Union. Annual settlements are subject to inspection by State financial authorities.
Can the Farmers Support Fund change its fee schedule?
Yes, but only after obtaining written approval from the Ministry of Finance.
Full text
CIRCULAR
MINISTRY OF FINANCE DECREE NO. 73/TC-TNH ON OCTOBER 9, 1995
GUIDELINES FOR THE MANAGEMENT REGULATIONS OF THE AGRICULTURAL RURAL SUPPORT FUND OF THE ASSOCIATION OF VIETNAMESE PEASANT FARMERS
Implementing the Prime Minister's directive in Document No. 4053/KTTH dated July 26, 1995 regarding the establishment of the Agricultural Rural Support Fund of Vietnam.
The Ministry of Finance provides guidelines for the management regulations of the Agricultural Rural Support Fund of the Association of Vietnamese Peasant Farmers as follows:
I. GENERAL PROVISIONS:
1. The Agricultural Rural Support Fund does not engage in business activities aimed at profit-making. Its operations aim to support and assist farmers to develop production in rural areas.
2. The Fund is responsible for its activities before the Law, operates independently in financial matters, preserves capital, and is exempt from paying taxes to the State Budget.
3. Financial income and expenditure activities of the Agricultural Rural Support Fund are subject to the guidance and management of the Central Executive Board of the Association of Vietnamese Peasant Farmers.
4. The Fund shall implement financial income and expenditure, accounting, and settlement according to the Accounting and Statistics Ordinance; the general financial regime of the State, and the contents specified in this document.
The fiscal year of the Fund runs from January 1 to December 31 annually.
II. CONTENTS OF FINANCIAL MANAGEMENT:
1. Regarding sources of capital: The operating capital of the Fund is formed from the following sources:
- Capital raised from peasants, non-agricultural households, organizations, and individuals both within and outside the country who support, lend without interest or at low interest rates.
- Capital received from international organizations, organizations, and foreign individuals who assist in developing the economy and society in rural Vietnam.
- Entrusted capital from the State, domestic and foreign organizations that sponsor the development of agriculture and rural areas.
The Fund shall not mobilize capital or borrow funds through savings deposits, issuance of promissory notes, bills of exchange, commercial loans, etc., as financial institutions engaged in money trading do.
2. Regarding the use of capital:
The operating capital of the Fund is used to assist farmers, especially those in poverty who need capital to develop production. Assistance loans are provided under the form of interest-free loans with repayment terms and limits, only charging fees.
The Fund is responsible for managing and using the capital for the intended purposes, targeting the right beneficiaries, effectively, timely recovering all loaned amounts to ensure capital preservation and timely full repayment to sponsors.
The Fund shall not use operational capital for monetary business activities aimed at profit-making.
3. Regarding fee collection:
The Agricultural Rural Support Fund may collect fees on assistance loans provided to farmers. The principle of fee collection is to cover necessary expenses for the operation of the Fund, including fees and interest paid to individual and organizational sponsors (fees or interest at preferential rates); salaries, travel expenses, office supplies, and other necessary operational costs; while the fee rate must be appropriate for each household type, region, and period; specifically:
- The fee rate for loans to poor households is lower than for non-poor households.
- The fee rate for loans to households in mountainous and island regions is lower than for households in plains and midlands.
- The highest fee rate shall not exceed 1.2% per month.
Based on these principles, the Central Executive Board of the Association of Vietnamese Peasant Farmers will instruct and guide the Fund to establish a fee schedule to be submitted to the Central Executive Board and the Ministry of Finance. After approval by the Ministry of Finance, the Central Executive Board will issue a decision to implement the fee schedule, which must be enforced for a minimum period of six months.
Any amendments to the above provisions can only be implemented after written approval from the Ministry of Finance.
4. Financial Income and Expenditure of the Fund
a. The Fund's income includes:
- Fees collected from assistance loans
- Other income: contributions from domestic and foreign organizations and individuals for the Fund's activities.
The Agricultural Rural Support Fund is responsible for collecting all income items accurately, fully, and promptly according to the decisions of the Central Executive Board of the Association of Vietnamese Peasant Farmers, after approval by the Ministry of Finance.
b. Operating expenses of the Fund:
- Business expenses include:
+ Payment of fees to domestic and foreign organizations and individuals who provide sponsored capital to the Fund with fees.
+ Payment of interest: For sponsored and entrusted capital from domestic and foreign organizations and individuals requiring interest payments (at preferential rates).
+ Other expenses (if any)
- Administrative expenses:
+ Salaries for Fund staff
+ Social insurance, health insurance, and other mandatory payments according to state regulations.
+ Travel expenses
+ Expenses for fixed asset investment, repairs, and purchase of labor tools.
+ Necessary and reasonable expenses such as conference fees, hospitality expenses, etc.
The Agricultural Rural Support Fund is responsible for implementing expenditures within the approved annual plan and within the permissible revenue range.
c. Distribution of surplus income over expenditure:
Annually, the Agricultural Rural Support Fund can only spend within the permitted revenue range. Surplus income over expenditure shall be distributed as follows:
- 50% to supplement the operating capital for providing assistance loans to farmers.
- 20% to establish a fund for investment in construction and acquisition of assets for the Fund's activities.
- The remaining 30% to establish two funds: reward and welfare. The amount allocated to each fund shall be applied according to state regulations for state-owned enterprises. If there is any remaining amount after establishing the two funds, it shall be fully supplemented to the investment fund for construction and acquisition of assets.
If the Fund spends more than its annual revenue in a year, the excess spending shall be carried forward to the next year.
5. Accounting System and Accounting Regulations
- Based on the Accounting and Statistics Ordinance and the current accounting system of the State, the Central Executive Board of the Association of Vietnamese Peasant Farmers will develop an accounting system suitable for the Fund's activities and submit it to the Ministry of Finance. After approval by the Ministry of Finance, the Central Executive Board will issue a decision to implement the system.
- The Agricultural Rural Support Fund is responsible for maintaining accounting books, recording vouchers, and conducting accounting in accordance with the Accounting and Statistics Ordinance and the regulations of the Central Executive Board of the Association of Vietnamese Peasant Farmers and the Ministry of Finance.
- The Agricultural Rural Support Fund is responsible for preparing and submitting quarterly and annual financial reports to the Ministry of Finance and the Central Executive Board of the Association of Vietnamese Peasant Farmers.
+ Summary of Assets Table
+ Balance Sheet
+ Income and Expense Settlement Report
+ Capital Source and Utilization Report
+ Asset Report
Deadline for submission of reports:
+ Quarterly settlement report shall be submitted not later than 40 days after the end of each quarter.
+ Annual settlement report shall be submitted no later than March 1 of the following year.
- The Executive Board of the Vietnam Farmers' Union shall be responsible for inspecting and approving the annual financial settlement of the Fund.
6. Financial Planning
The Fund for Supporting Farmers shall be responsible for developing the annual financial plan according to the guidelines of the Executive Board of the Central Steering Committee of the Vietnam Farmers' Union and submitting it to the Executive Board of the Central Steering Committee of the Vietnam Farmers' Union and the Ministry of Finance at the specified time for the next year's planning documents, including:
+ Plan for sources and utilization of capital for farmers' assistance
+ Financial income and expenditure plan
The Executive Board of the Central Steering Committee of the Vietnam Farmers' Union shall be responsible for reviewing and approving the above plans of the Fund. Approved targets will serve as the basis for the Fund's implementation during the year.
III. IMPLEMENTATION PROVISIONS:
1. The Fund for Supporting Farmers shall be accountable under the law for the use and preservation of state and social funds aimed at rural production development, and shall be subject to inspection by state financial authorities in accordance with the Accounting and Statistics Ordinance and the financial regulations stipulated in this Circular.
2. The Executive Board of the Central Steering Committee of the Vietnam Farmers' Union shall be responsible for organizing the monitoring and inspection of the Fund's financial activities to ensure proper management and utilization of its capital in accordance with the union's objectives and policies, and to implement financial income and expenditure in compliance with financial policies and regulations.
Based on the financial management system for the Fund for Supporting Farmers as outlined in this Circular, the Executive Board of the Central Steering Committee of the Vietnam Farmers' Union shall issue specific guidance documents for the Fund.
In the course of implementation, if there are any difficulties, they should be reported to the Ministry of Finance for timely review and amendment./.
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