Circular No. 766-TC/TCT on guiding the collection of water resource tax for electricity production

JOINT CIRCULAR

GUIDELINES FOR IMPLEMENTATION OF BUDGET CONTRIBUTIONS AND CERTAIN MEASURES TO BALANCE FINANCIAL REVENUES AND EXPENDITURES IN 1993 FOR THE ELECTRICITY SECTOR ISSUED BY THE MINISTRY OF FINANCE - MINISTRY OF ENERGY NO. 41-TC/NL-TTLB ON MAY 26, 1993

Pursuant to Circular No. 1309-KTTH dated April 1, 1993, of the Government Office regarding additional electricity charges in southern provinces and financial revenue and expenditure balancing for the Electricity Sector.
THE JOINT MINISTRIES OF FINANCE AND ENERGY UNIFY THE GUIDELINES FOR IMPLEMENTATION OF THE ADDITIONAL CHARGE ON ELECTRICITY PRICES, PAYMENTS INTO THE STATE BUDGET, AND CERTAIN MEASURES TO BALANCE FINANCIAL INCOME AND EXPENSES FOR THE ELECTRICITY SECTOR IN 1993 AS FOLLOWS:

I- ADDITIONAL ELECTRICITY CHARGES:

FROM APRIL 1, 1993 TO JUNE 30, 1993, THE ELECTRICITY SECTOR IS PERMITTED TO IMPOSE AN ADDITIONAL CHARGE ON ELECTRICITY PRICES IN PROVINCES IN THE SOUTHERN REGION (FROM KHÁNH HOÀ PROVINCE SOUTHWARDS, EXCEPT HỒ CHÍ MINH CITY).

THE LEVEL OF THE ADDITIONAL CHARGE AND THE GROUPS SUBJECT TO THE CHARGE SHALL BE IMPLEMENTED ACCORDING TO THE ANNOUNCEMENT OF THE GOVERNMENT PRICE BOARD AND LETTER NO. 272 VGCP-TLSX DATED APRIL 12, 1993.

II- COLLECTIONS INTO THE STATE BUDGET AND MEASURES TO BALANCE FINANCIAL REVENUES AND EXPENDITURES IN 1993:

1. Regarding business income tax: All units under the Electricity Sector must pay business income tax into the State Budget. The tax rate, method of calculation, procedures for payment, and location for payment shall be carried out according to Circular No. 294-TC/TCT dated March 11, 1991, of the Ministry of Finance on the implementation of the Business Income Tax Law for electricity and coal.

In areas where progressive electricity pricing and additional charges apply, the taxable revenue from electricity sales includes both progressive pricing revenues and additional charge revenues.

Specifically, for the Ho Chi Minh City Electricity Corporation, the taxable revenue from electricity sales does not include additional charge revenues. Additional charges in Ho Chi Minh City shall be implemented according to Decision No. 548/QĐ-UBCN dated April 15, 1993, of the People's Committee of Ho Chi Minh City.

2. TAX ON NATURAL RESOURCES:

Electricity companies have the responsibility to accurately calculate resource taxes according to Circular No. 766 TC-TCT dated June 11, 1991, of the Ministry of Finance on resource taxes for water used in hydropower production, and to pay them into the State Budget according to current regulations.

3. USE OF GOVERNMENT CAPITAL:

Electricity companies must accurately calculate the usage fee for state capital based on the amount of state capital that has been preserved according to current regulations and the percentage specified in Circular No. 13-TC/TCT dated February 23, 1991, of the Ministry of Finance.

- THE FIRST ELECTRICITY COMPANY MUST SUBMIT THE ENTIRE AMOUNT OF GOVERNMENT CAPITAL USE TO THE STATE BUDGET (BY RECORDING THE GOVERNMENT CAPITAL USE OF THE FIRST ELECTRICITY COMPANY AND RECORDING THE SUBSIDY FOR THE THIRD ELECTRICITY COMPANY).

- THE SECOND AND THIRD ELECTRICITY COMPANIES ARE TEMPORARILY EXEMPT FROM SUBMITTING GOVERNMENT CAPITAL USE IN 1993.

4. HANDLING PROFITS AND LOSSES IN 1993:

- The Electricity Company I in 1993, due to high hydropower generation, generated excess profits which were determined in the company's 1993 plan. The Electricity Company I must pay all of this excess profit into the State Budget (by recording the revenue as State Budget Revenue of the Electricity Company I and recording the expenditure as price subsidy for the Electricity Companies II and III).

THE PROFITS GENERATED FROM EFFORTS TO REDUCE COSTS AFTER PAYING INCOME TAX WILL BE TREATED AS REALIZED PROFITS, AND THE FIRST ELECTRICITY COMPANY MAY ESTABLISH THREE FUNDS ACCORDING TO CURRENT REGULATIONS.

- The Electricity Companies II and III, after being temporarily exempted from the usage fee for state capital and reduced depreciation for basic assets for the Electricity Company II, any remaining losses (if any) due to objective reasons will be considered for compensation by the Ministry of Finance in the form of price subsidies.

THE SOURCE OF SUBSIDY FOR THE SECOND AND THIRD ELECTRICITY COMPANIES IS THE AMOUNT OF SUPER-NORMAL PROFITS AND GOVERNMENT CAPITAL USE SUBMITTED TO THE STATE BUDGET BY THE FIRST ELECTRICITY COMPANY.

Based on the planned loss for the year, the Ministry of Finance will determine quarterly losses and provide temporary subsidies on a quarterly basis. To ensure timely and accurate subsidy provision, it is requested that each Electricity Company submit quarterly plans and quarterly settlement reports to the Ministry of Finance and the Ministry of Energy. Based on the previous quarter's settlement and the current quarter's plan, the Ministry of Finance will consider providing temporary subsidies for the quarter. The deadline for submitting the quarterly plan is the first day of the quarter, and the deadline for submitting the quarterly settlement report is the 30th day of the quarter.

5. DEPRECIATION OF FIXED ASSETS:

Units in the Electricity Sector must deduct basic asset depreciation strictly according to Circular No. 507-TC/ĐTXD dated July 22, 1985, and Circular No. 59-TC-CN dated December 5, 1990, of the Ministry of Finance, with the original value of fixed assets being the preserved original value according to current regulations.

- THE FIRST AND THIRD ELECTRICITY COMPANIES MUST SUBMIT THE ENTIRE AMOUNT OF DEPRECIATION OF FIXED ASSETS TO THE STATE BUDGET.

- The Electricity Company II may temporarily deduct basic asset depreciation for 1993 into cost prices at 50% of the depreciation that should be deducted according to the aforementioned circulars, and this depreciation must be fully paid into the State Budget according to current regulations.

AT THE END OF THE YEAR, BASED ON THE FINAL REPORT OF THE SECOND ELECTRICITY COMPANY, THE MINISTRY OF FINANCE WILL REVIEW AND DETERMINE THE OFFICIAL REDUCTION AMOUNT BASED ON THE ACTUAL LOSSES.

6. DEPRECIATION AND USE OF MAJOR REPAIR FUNDS:

The extraction and use of funds for maintenance and repair must comply with the purpose and regulations stipulated in Circular No. 33-TC/CN dated July 31, 1990, of the Ministry of Finance. Based on the maintenance and repair needs for 1993, the Electricity Sector determines the amount of maintenance and repair fund deductions according to actual reasonable costs into product cost prices. Specifically, the Electricity Company II can handle maintenance and repair funds according to Circular No. 1492/KTTH dated April 9, 1993, of the Government Office "Regarding Handling Maintenance and Repair Funds for the Electricity Company II," but not exceeding 35 billion as proposed by the company.

III- IMPLEMENTATION:

BASED ON THE ABOVE PROVISIONS, IT IS REQUESTED THAT THE ELECTRICITY COMPANIES DIRECT THEIR SUBORDINATE UNITS TO FULLY COMPLY WITH THEIR OBLIGATIONS TO THE STATE BUDGET.

At the end of 1993, based on the settlement of each unit, the Ministry of Finance will review and officially determine the reduction and exemption levels for each company. For certain items of price subsidy revenue and expenditure arising in the first quarter of 1993, it is requested that the companies submit reports to the two ministries for consideration and timely processing.

BASED ON THE PROVISIONS IN THIS CIRCULAR, IT IS REQUESTED THAT LOCAL TAX AUTHORITIES CHECK THE IMPLEMENTATION AND REPORT ANY ISSUES TO THE TWO MINISTRIES FOR RESOLUTION.