Decision No. 736/TTg On continuing to prevent and mitigate the consequences of typhoons and floods in the provinces of Quang Binh, Quang Tri, Thua Thien Hue, Quang Nam - Da Nang, Quang Ngai, and Binh Dinh.

Pursuant to …;

On certain mechanisms and measures for managing and operating the state budget in 1996

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PRIME MINISTER

To successfully implement the Resolution of the National Assembly, Session VIII, Ninth Term, on the state budget estimate for 1996, the Prime Minister decides on certain mechanisms and measures for managing and operating the state budget as follows::

I- GRADATION OF STATE BUDGET MANAGEMENT FOR LOCALITIES:

Pending the promulgation of the State Budget Law, to ensure stable revenue sources and expenditure tasks for localities in the two years 1996-1997, and to create conditions for local authorities at all levels to proactively decide on their plans and manage their budgets, the current system of decentralized management of the state budget will be amended and supplemented as follows:

1. Regarding expenditure tasks:

a) Transfer the task of supplementing capital for state-owned enterprises in localities to the central state budget.

b) Supplement some expenditure tasks for local state budgets as follows:

- Investment in construction, repair, and upgrading of welfare and social works (hospitals, schools, parks, etc.) using lottery revenues.

Provinces with lottery revenues up to 20 billion VND can use the entire amount; provinces with revenues over 20 billion VND can use part of it for investment in construction, repair, and upgrading of welfare and social works, while the remainder is used to balance expenditures for education, health, culture, and social affairs in the locality.

- Investment in agriculture and rural development using 45% of the tax revenue from agricultural land use for rice cultivation.

- Subsidies for water pumping expenses exceeding the quota and support for losses in water resource fees.

c) For expenditure tasks not specified in points (1a) and (1b) above, continue to implement them according to the current system of gradation of state budget management.

2. Regarding revenue sources:

a) Local state budget revenues that are retained at 100%, including:

- Agricultural land use tax;

- Land use right transfer tax;

- House and land tax;

- Rent for land (excluding rent for land and water surfaces for foreign-invested enterprises);

- Revenue from the sale of state-owned houses;

- Revenue from granting the right to use land;

- Revenue from lottery activities;

- Business registration tax;

- Slaughter tax;

- Stamp duty;

- Other revenues from the non-state commercial and service sector;

- Local fees and charges;

- Other revenues of the local budget (excluding revenues from the use of state budget funds, recovered capital, and other revenues from state-owned enterprises);

b) Local state budget revenues shared according to the general adjustment ratio, including:

- BUSINESS INCOME TAX;

- Income tax (excluding income tax of units under full-sector accounting);

- Corporate income tax (excluding corporate income tax of oil workers);

- Resource tax (excluding resource tax on hydropower water in Hoa Binh);

- Revenue from the use of state budget funds;

c) Supplementary sources from the Central Budget: if the local budget revenues allocated according to points (2a) and (2b) above do not guarantee the assigned expenditure tasks, the Central Budget will supplement the local budget.

d) Revenues from crude oil exploitation activities and other revenues not specified in points (2a) and (2b) above shall be fully remitted to the central state budget.

Maintaining stability in the two-year period 1996-1997 for local budget expenditures, local budget revenues will enjoy 100%, and the general ratio of revenue redistribution; in cases where significant fluctuations in revenue and expenditure due to external factors affect the budgets at various levels, the Government will consider adjusting the relationship between budget levels.

For localities facing difficulties, the supplementary amount from the central state budget to the local state budget in 1997 will be reviewed and adjusted based on the capacity of the state budget.

II- MANAGEMENT AND OPERATIONS OF STATE BUDGET REVENUE AND EXPENDITURE:

1. Regarding state budget income:

- The Ministry of Finance will study tax policy reforms to submit to the Government for decision in accordance with the National Assembly's Resolution; guide the implementation of revised and supplemented Tax Laws at the eighth session of the ninth term of the National Assembly; adjust export and import tax rates promptly for certain groups and items in line with export and import policies, consumption regulation, and increased revenue for the budget; gradually implement the Common Effective Preferential Tariff (CEPT) program for the ASEAN Free Trade Area (AFTA) based on ensuring budget revenue, reasonable protection of domestic production, promoting technology transfer and production innovation, expanding export markets, and attracting foreign investment.

- Tax and customs authorities will improve methods of revenue collection and enhance the effectiveness of the tax collection machinery; closely coordinate with local authorities to strengthen inspection and auditing to prevent revenue loss, especially in areas with high potential for revenue such as the non-state economic sector, import and export, foreign-invested enterprises, and real estate. Organize publicity and publicize tax rates for each household engaged in production and business to enhance voluntary tax payment to the state.

- The Ministry of Finance will regulate lottery operations, reduce the highest prize level, improve operational forms to curb illegal number games; allocate lottery revenue targets suitable to the situation of each locality.

2. Regarding state budget expenditure:

- Financial agencies will distribute funds evenly throughout the year according to the progress of work (including additional funds from higher-level budgets to lower-level budgets), ending the practice of concentrating disbursements at the end of the year. In cases where revenue has not been collected in time to meet expenditure requirements, the Ministry of Finance will borrow temporarily from the State Bank to ensure the planned expenditure progress of ministries, sectors, and localities and must repay within the year. Expenditures already planned and guaranteed by revenue sources must be implemented promptly and not arbitrarily reduced.

- Continue to suspend the construction of new offices and purchase of cars for administrative and service agencies, Party organizations, and mass organizations funded by the state budget. In truly necessary cases, they must be reviewed by the Ministry of Finance and the Ministry of Planning and Investment regarding needs and funding sources before being submitted to the Prime Minister for decision.

State-owned enterprises will independently decide on purchasing small cars with state funds to serve work according to the current capital management regulations, adhering to the principle of thrift promoted by the Party and the State.

- Ministries, sectors, localities, and grassroots units must strictly and effectively implement the National Assembly's Resolution on practicing thrift, combating waste, corruption, and smuggling. After receiving the annual budget expenditure plan, unit heads must develop a thrift plan to report to the supervising agency, financial agency, and make it known to all cadres and mass organizations in the unit for implementation; savings will be retained by the unit to arrange for necessary and effective tasks that the initial budget could not cover. Unit heads will be responsible for any unauthorized expenditures, financial losses, and wasteful spending.

- Only allocate expenditures within the scope of certain revenue and according to the assigned plan; if revenue does not meet the plan, expenditures must be strictly reduced accordingly. Do not allocate expenditures without guaranteed revenue sources; for systems that need to be revised or supplemented to reduce revenue or increase state budget expenditures, relevant ministries and sectors must carefully study and submit to competent authorities for issuance and only implement increased expenditures when there is a guaranteed source; the finance agency shall be responsible for reviewing these newly arising cases. During the budget management process, if new legitimate expenditure needs arise, ministries, sectors, localities, and units must arrange them within the total annual plan limit assigned, including rearranging expenditure tasks, except in cases of sudden natural disasters. For conference, outbound delegation, and inbound delegation expenditures already allocated in the plan, they can only be implemented upon decision by the competent authority; if expenditures are not fully utilized, they must be returned to the state budget and cannot be transferred to other purposes.

3. Regarding national target programs:

a) National target program funds should be prioritized for mountainous areas, border regions, islands, and other difficult regions. The Ministry of Finance and the Ministry of Planning and Investment need to coordinate with the managing agencies of the national target programs to report to the Government for deciding on allocating the national target program funds to each ministry, sector, and locality along with other revenues and expenditures.

Ministries and localities shall review projects under the directly implemented national target program content and decide on allocating funds for implementing the program within the total assigned fund limit, reporting to the Ministry of Finance, the Ministry of Planning and Investment, and the managing agency of the national target program for monitoring and management.

b) The finance agency shall prioritize and promptly allocate funds for national target programs to ensure project progress. The main agency of the national target program shall cooperate with the Ministry of Finance and the Ministry of Planning and Investment to allocate funds for sectors and localities according to each program, providing guidance, inspection, and supervision to ensure expenditures are made to the correct recipients, in accordance with regulations, and towards the set objectives. Provincial People's Committees directly manage, direct, and operate the assigned programs and publicly announce the allocated funds for each national target program to enable proactive implementation.

c) Managing agencies need to organize evaluations of the implementation results and reorganize national target programs. For national target programs that are regular tasks of ministries and localities, the funds allocated for these programs shall be included in regular expenditure tasks for ministries and localities to implement. For localities still facing financial difficulties where revenue is insufficient to cover expenditures, higher-level finance agencies must take measures to ensure sufficient funds for national target programs at the allocated level.

4. The Ministry of Labor, Invalids, and Social Affairs shall lead together with related ministries to propose to the Government a subsidy scheme for salary difficulties within the total limit approved by the National Assembly for those receiving salaries and subsidies from the state budget who truly face difficulties due to low income.

Ministries, sectors, and localities shall focus on directing and strictly managing staffing and salary funds; actively reorganizing staffing and organizational structures to be leaner and more effective, ensuring efficiency and improving work performance to create a foundation for fundamentally addressing salary issues and gradually increasing the standard of living for those receiving salaries and social allowances.

5. During the management process, efforts should be made to increase revenue to increase investment and expenditures for important tasks not yet arranged in the initial budget estimate, supplement the Financial Reserve Fund, and reduce the state budget deficit, keeping the state budget deficit below or equal to 3% of GDP.

6. Management and use of the State Financial Reserve Fund and the State Budget Contingency Fund:

a) The Minister of Finance manages the State Financial Reserve Fund according to the principle of preservation and continuous development of the Fund, which may only be temporarily used when state budget balance encounters difficulties due to seasonal revenue sources not being timely concentrated, and must be repaid within the fiscal year.

b) The contingency fund of each level may only be used for urgent expenditures decided by the competent authority based on ensuring the state budget balance approved by the National Assembly.

The authority to decide on expenditures from the State Budget Contingency Fund is as follows:

- For the Central Budget Contingency Fund, the Minister of Finance, after consulting with the Minister of Planning and Investment, decides to supplement the budget estimates for ministries and localities for expenditures up to 1 billion VND to address disaster aftermaths, enemy threats, and other urgent needs, or those planned but insufficiently funded, then reports to the Prime Minister and assumes responsibility before the Prime Minister for such decisions; for expenditures without plans or exceeding 1 billion VND over the plan, submit to the Prime Minister for consideration and decision.

- For the use of local budget contingency funds to supplement expenditures for agencies and units managed by localities and lower-level budgets, the finance-price agency, after consulting relevant departments, shall report to the Chairman of the People's Committee for consideration and decision or implement according to the delegation of the Chairman of the People's Committee.

III- STRENGTHENING THE CONTROL OF STATE BUDGET EXPENDITURE:

The Ministry of Finance shall guide the procedures for disbursing and managing the state budget to ensure all state budget expenditures are rigorously reviewed for procedures before disbursement, thoroughly inspected during and after disbursement, used for intended purposes, to the correct recipients, effectively, and according to approved estimates; gradually implement all state budget expenditures paid directly to suppliers of goods and services through the State Treasury based on the spending authorization of unit heads, accepted for payment by the finance agency; establish mechanisms to bind individuals financially responsible for expenditure decisions that violate regulations and policies.

Starting from 1996, the following procedures for disbursing state budget expenditures shall be implemented:

1. For construction investment and development-related operational expenditures, follow the current procedures and formalities for disbursing construction investment capital.

2. For administrative and operational expenditures, the State Treasury shall make payments according to the following methods:

Expenditures for purchasing equipment, repairs, etc., shall be directly paid to supplying units based on tender records, contracts, vouchers, invoices approved for payment by the beneficiary unit and accepted for payment by the finance agency.

- For regular expenditures with small values, upon the request of the unit, the State Treasury shall provide a predetermined amount of temporary advance to budget-receiving units to proactively spend according to the approved expenditure budget. The budget-receiving unit is responsible for reporting the actual expenditures to the financial authority and the State Treasury for conversion from the temporary advance to actual expenditure accounting.

3. For special expenditures (security, defense...), the Ministry of Finance shall coordinate with the Ministry of Defense and the Ministry of Public Security to establish specific regulations to ensure strict management appropriate to the nature and characteristics of each expenditure item.

4. For expenditures to repay domestic and foreign government loans within the state budget scope, supplementary budgets from higher levels to lower levels, aid expenditures, and support for state enterprises, based on the payment orders of the financial authorities, the State Treasury shall directly make payments to the beneficiaries.

For government bond debts issued by the State Treasury, the State Treasury shall make direct payments and settle accounts with the state budget.

IV- IMPLEMENTATION:

1. Provincial People's Committees under the central government shall base their decisions on the provisions regarding budget decentralization management stipulated in Section I of this Decision, to decide on the decentralization management of the budget for local levels.

Starting from 1996, implement a stable revenue and expenditure mechanism for each level of budget; do not implement a bonus system for exceeding revenue plans from higher-level budgets for lower-level budgets.

2. In managing and operating local budgets, the Chairpersons of Provincial People's Committees under the Central Government shall have the authority:

- Allocate specific expenditures within the stable decentralized budget range, including the portion of increased revenue that the local budget benefits from according to the system.

- Levy additional taxes on certain items as prescribed by the Prime Minister.

- Collect fees and charges according to the decentralization regulations of the Prime Minister and mobilize the people's contributions to build welfare projects in the locality.

- To mobilize various sources of capital as prescribed by the Prime Minister to meet urgent basic construction needs when revenue is insufficient.

3. The Minister of Finance shall guide the implementation of this Decision; Ministers of Ministries, heads of ministerial-level agencies, and agencies under the Government, and Chairmen of Provincial People's Committees under the central government shall, based on the assigned state budget revenue and expenditure tasks, the management mechanisms and measures, and the budget operation methods set forth in this Decision, instruct and direct subordinate units to implement it.