CIRCULAR  JOINT CIRCULAR

Guidelines for Implementing Cost Allocation for Toll Collection Activities

at Road Toll Stations

Pursuant to the Decree No. 57/2002/NĐ-CP dated 03/6/2002 of the Government Prescribing

Detailed Implementation of the Ordinance on Fees and Charges.

Pursuant to Decree No. 56/CP dated 02/10/1996 of the Government on State-Owned Enterprises Engaged in Public Services.

Pursuant to Decree No. 10/2002/NĐ-CP dated

of the Government on Financial Regulations Applicable to Public Service Units with Revenue. 16/01/2002 The Ministry of Finance and the Ministry of Transport jointly issue guidelines for implementing cost allocation

for toll collection activities at road toll stations as follows:            

1. These Circulars apply to road toll stations authorized by competent authorities

to collect tolls on national highways and local roads funded by the state budget, including: Roads

I- General Provisions.

funded by state budget sources; roads funded by capital derived from the state budget; roads funded by state loans - tolls to repay principal and interest, and other roads managed by the state.

These Circulars do not apply to units operating toll stations funded by joint ventures or investments for business purposes (BOT).

2. The State implements cost allocation for organizing toll collection activities based on a percentage  of actual toll revenue (including any excess revenue, if any) of each station. This allocation level

Policy  will be stable for three years, after which it will be reviewed and adjusted as appropriate. Based

on assigned tasks and cost allocations, units are responsible for implementing measures to prevent revenue loss, reduce costs, improve quality,

efficiency of toll collection work, and increase income for workers.

3. Toll stations must comply with regulations on toll rates, collection organization, and toll payment systems as prescribed by the Ministry of Finance.

II- Specific Provisions

A- Content of Expenditure and Sources of Funding for Toll Collection Activities:

1. Content of Expenditure for Toll Collection Activities

Ensuring the operation of toll stations, including: Regular operational expenditure,

investment in modernizing toll collection technology; specifically as follows:

1.1. Regular Operational Expenditure for Organizing Toll Collection:

Wages, salaries, allowances, social insurance contributions, health insurance contributions, trade union fees;

Management expenses: travel expenses, conference expenses, communication expenses, public service expenses (lighting electricity for toll stations, office water for toll stations), office supplies, meeting expenses....

Meal expenses during shifts;

Labor protection equipment or uniforms according to regulations (if applicable);:

Professional training expenses;

Regular maintenance expenses for buildings, office equipment, toll stations;

Toll station security guard rental expenses (if applicable);

Ticket and stamp expenses for toll collection;

Purchase of spare parts, small value equipment, and other tools directly serving toll collection;

Indirect enterprise expenses serving toll collection operations (for state-owned enterprises tasked with toll collection);

1.2. Expenditure for Establishing Reward Funds and Welfare Funds.

1.3. Expenditure for Modernizing Toll Collection Technology:

Expenditure for modernizing toll collection technology: purchasing and installing toll collection equipment (automatic and semi-automatic devices); purchasing vehicle counting equipment according to approved budgets by competent authorities. Procurement and modernization of toll collection technology shall be conducted through bidding in accordance with current state regulations.

Specifically, major repair expenses for administrative offices, major repairs for toll stations, maintenance and lighting expenses for bridges (on sections with bridges), bridge protection expenses, purchase of money transport vehicles, and major repairs for money transport vehicles are allocated from the state budget annually (central government budget for national highways, local government budget for local roads) according to approved budgets by competent authorities.

Sources of funding to ensure toll collection activities:

2.1. For National Highway Toll Stations:

Funding to ensure toll collection activities is calculated at 20% of annual actual toll revenue (of which: 5% for modernizing toll collection technology for toll stations, 15% for regular operational expenditure for organizing toll collection); The remaining 80% is paid into the central government budget, or repaid with interest according to the project (for routes funded by loans, tolls to repay principal and interest). The allocation of the 20% retained fee is implemented as follows:

Other expenses (if any).

a) Allocate 15% to ensure regular operational expenditure for organizing toll collection (including the establishment of reward funds and welfare funds as prescribed):

The Vietnam Highway Administration bases its decision on the approved revenue-expenditure budget for road tolls; the detailed revenue-expenditure budget for highway management zones or provincial transportation departments (for toll stations entrusted to the Ministry of Transport for management) for each toll station; current financial expenditure regulations; content ensuring regular operational expenditure for organizing toll collection; approves the percentage (%) of fees retained for each toll station within the range of 15% of collected fees. The retention ratio for each toll station is determined as follows:

For toll stations where the approved regular expenditure is equal to or less than 15% of revenue, the retained fee for regular operational expenditure is allocated according to the approved percentage (%). In cases where there is a surplus difference between the approved ratio and the general prescribed ratio (15%), the surplus is deposited into the Vietnam Highway Administration's account at the Central Treasury to establish a balancing fund for underfunded stations.

For toll stations where the approved regular expenditure exceeds 15% of revenue, the station is guaranteed by the Vietnam Highway Administration

2. to cover the minimum wage for toll collectors according to regulations, but not exceeding 25% of the actual revenue of each station.

b) Allocate 5% for modernizing toll collection technology for toll stations:

The source of funds to ensure the operation of toll collection activities is calculated at 20% of the annual actual toll revenue from road traffic (of which: 5% for investment in modernizing toll collection technology at toll stations, 15% for regular operating expenses of toll collection organizations); The remaining 80% is deposited into the central budget, or repaid according to the project loan principal and interest (for roads funded by loans, tolls repay the principal and interest). The allocation of the 20% retained fee is implemented as follows:  a) Allocate 15% to ensure regular operating expenses of toll collection organizations (including bonuses and welfare funds as prescribed):

The Vietnam Highway Administration bases its allocation on the approved budget estimates for toll revenue and expenditure; detailed budget estimates for toll revenue and expenditure of Road Management Zones or Departments of Transport (for toll stations on national highways entrusted to management by the Ministry of Transport); current financial expenditure regulations; contents ensuring regular operating expenses of toll collection organizations; approves the percentage (%) of fees retained for each toll station within the range of 15% of total collected fees. The retention ratio for each toll station is determined as follows:

For toll stations with approved regular expenditure equal to or less than 15% of revenue, the retained fee for regular expenditure is allocated according to the approved percentage (%). In cases where there is a surplus difference between the approved ratio and the general prescribed ratio for regular expenditure (15%), the surplus portion is deposited into the account of the Vietnam Highway Administration opened at the State Treasury Central Office to establish a balancing fund for underfunded stations. 

For toll stations with approved regular expenditure higher than 15% of revenue, the station receives a subsidy from the Vietnam Highway

Administration to ensure minimum wages for toll collection staff as prescribed, but not exceeding 25% of the actual toll revenue of each station. Male b) Allocate 5% for investment in modernizing toll collection technology at toll stations:

Toll stations on national highways, Departments of Transport (for local road toll stations) base their allocation on the approved budget estimates for toll revenue and expenditure for 2003; the implementation status of the 2002 budget estimate, to allocate the toll revenue budget for 2003, allocate the percentage (%) of regular expenditure over the total revenue for 2003 to units, detailed for each toll station as a basis for stable implementation over three years (2003-2005)

Based on the budget for investment in modernizing toll collection technology for the work of toll collection at the Road Management Zone or Department of Transport (for toll stations on national highways entrusted to management by the Ministry of Transport), detailed for each toll station; In accordance with the need to modernize toll collection technology to ensure compatibility with the toll station network planning, the Vietnam Highway Corporation reports to the Ministry of Transport for approval of the budget for investment in modernizing toll collection technology for each toll station within 5% of the toll revenue collected by each station and deposited into the account of the Vietnam Highway Corporation opened at the Central Treasury, and the remaining balance of the three-year regular expenditure (if any), after obtaining a unified written opinion from the Ministry of Finance.

2.2. For toll stations on local roads.

a) Sources of funds to ensure regular operation of toll collection (including rewards fund and welfare fund according to regulations):

The amount of toll revenue retained for regular operational expenses as a percentage (%) of the actual toll collected by each station, determined by the Department of Transport, after reaching consensus with the Department of Finance-Price Control and submitting it for decision by the Chairman of the Provincial People's Committee,  but not exceeding a maximum of 30% of the total toll revenue collected by each toll station.  The remainder is paid into the local government budget or repaid for capital and interest loans according to the project (for routes funded by loans, tolls are used to repay capital and interest).

b) Sources of funds for investment in modernizing toll collection technology:

Investment in modernizing toll collection technology: purchasing and installing toll collection equipment (automatic and semi-automatic devices); costs for purchasing vehicle counting equipment, provided by the local government budget according to the approved budget by the competent authority.

B- Financial Management Mechanism.

1. Regular operational expenses for toll collection organizations:

Based on the content of regular operational expenses for toll collection organizations specified in Point 1.1, Section A, Part II of this Circular; Based on the approved regular operational expenses, toll collection organizations proactively organize their toll collection staff, economize on expenses to improve the quality of toll collection activities and increase income for employees.

For toll stations directly under public utility enterprises engaged in road repair, financial management regulations shall be implemented in accordance with Decree No. 56/CP dated 2/10/1996 of the Government on state-owned enterprises operating for public benefit and current guiding documents. 

For toll stations directly under units with income, financial management regulations shall be implemented in accordance with Decree No. 10/2002/NĐ-CP dated January 16, 2002 of the Government on financial systems applicable to units with income and Circular No. 25/2002/TT-BTC dated March 21, 2002 of the Ministry of Finance and current guiding documents.

Specifically, for the reward fund and welfare fund, the amount deducted equals three months' salary if the revenue this year is higher than last year, two months' salary if the revenue this year is equal to or lower than last year, as stipulated in Decree No. 57/2002/NĐ-CP dated June 3, 2002 of the Government detailing the implementation of the Law on Fees and Charges and Circular No. 63/2002/TT-BTC dated July 24, 2002 of the Ministry of Finance guiding the implementation of laws on fees and charges.

2. Investment in modernizing toll collection technology for toll stations:

Based on the content of investment in modernizing toll collection technology for toll stations specified in Point 1.3, Section A, Part II of this Circular and the approved budget, units assigned the task of collecting tolls (road maintenance companies or units with income) shall organize its implementation according to current regulations, ensuring progress and quality of work.

3. Funds carried over to the next year:

3.1. For regular operational expenses for toll collection, at the end of the year, if not fully spent, the unit may carry over to the next year for continued spending.

3.2. For investment expenses in modernizing toll collection technology, at the end of the year, if not fully spent, the unit shall return the excess to the Vietnam Highway Corporation (for toll stations on bridges and national highways); pay into the local government budget (for toll stations on local roads).                                                                                                                                                                 

4. Implementation of recording revenue and expenses for road usage fees

Record revenue and expenses through the state budget for the amount of toll revenue retained to repay loan capital invested in roads financed by loans and tolls used to repay the capital. The procedures for recording revenue and expenses through the state budget are implemented according to Point 4, Section II, Part II of Circular No. 109/2002/TT-BTC dated 06/12/2002 of the Ministry of Finance on the system of collection, payment, and management of road usage fees.

For the amount of toll revenue retained for regular operational expenses and investment in modernizing toll collection technology, there is no need to record through  the state budget.

C- Preparation and execution of annual budget for revenue and expenditure of road usage fees.

Each year, units with toll stations on roads base on the objects of collection, fee rates for each type of vehicle, number of vehicles participating in traffic in the planned year, standard cost norms, and current financial expenditure regulations, prepare the annual budget for revenue and expenditure of road usage fees according to the guidance of the Ministry of Finance on the decentralization, preparation, execution, and settlement of the state budget. This circular provides specific guidance on the following points:

1. Preparation and allocation of the first year's budget under the quota mechanism:

1.1. Preparation of the budget:

a) For units with toll stations on national highways:

Road management and repair companies under the Road Management Zone that have toll stations prepare the annual budget for revenue and expenditure of road usage fees, send it to the Road Management Zone for review and consolidation, then submit it to the Vietnam Highway Corporation.

Units (public utility road enterprises or units with income) under the Department of Transport entrusted by the Ministry of Transport to manage national highways with toll stations prepare the annual budget for revenue and expenditure of road usage fees, send it to the Department of Transport for review and consolidation, then submit it to the Vietnam Highway Corporation.

The Vietnam Highway Corporation Male reviews and consolidates the annual budget for revenue and expenditure of national highways, sends it to the Ministry of Transport. The Ministry of Transport consolidates it together with the annual budget of the Ministry and submits it to the Ministry of Finance as prescribed.

b) For units collecting tolls on local roads: 

The entity (public utility road enterprise or public service unit) operating a toll station shall prepare a budget for revenue and expenditure of road bridge fees and submit it to the Department of Transport. The Department of Transport shall consolidate this budget with its annual state budget and submit it to the local Department of Finance in accordance with regulations.

c) The budget for revenue and expenditure of road fees prepared by entities includes:

Revenue budget, including: Amounts to be deposited into the State Treasury and amounts retained for expenditure as stipulated in Point 2, Section A, Part II.       

Expenditure budget in accordance with the contents prescribed in Point 1, Section A, Part II.

The budget for revenue and expenditure of road fees shall be prepared by each entity on a per toll station basis, accompanied by detailed explanations of the calculation bases according to the revenue and expenditure items.

1.2. Allocation of Budget:

a) For entities collecting road fees on national highways:

For units under the Road Management Zone: Based on the budget for revenue and expenditure of road fees allocated by the competent authority; detailed budget for revenue and expenditure of the Road Management Zone according to each toll station; current standards and financial expenditure regulations. The Vietnam Highway Administration Male allocates the revenue budget and allocates the percentage rate (%) of regular expenditure over total revenue to each Road Management Zone, detailed according to each toll station. The Road Management Zone allocates the revenue budget and the percentage rate (%) of regular expenditure over total revenue to each Road Maintenance and Repair Company, detailed according to each toll station.

For units under the Department of Transport entrusted by the Ministry of Transport to manage national highways with toll stations: The Vietnam Highway Administration allocates the revenue budget for bridge and road fees and allocates the percentage rate (%) of regular expenditure over total revenue to the Department of Transport, detailed according to each toll station. The Department of Transport allocates the budget to the entity, detailed according to each toll station.

b) For units collecting tolls on local roads:

Based on the budget for revenue and expenditure of road fees allocated by the competent authority, the budget for revenue and expenditure prepared by entities with toll stations, current standards and financial expenditure regulations. The Department of Transport allocates the revenue budget for road fees and allocates the percentage rate (%) of regular expenditure over total revenue to the entity, detailed according to each toll station.

The allocation of the revenue budget for road fees and the percentage rate (%) of regular expenditure over total revenue by the Ministry of Transport, Vietnam Highway Administration, and the Department of Transport to subordinate units with toll stations must ensure the following principles: The revenue amount should not be lower and the percentage rate of regular expenditure retained over total revenue should not exceed the amount allocated by the competent authority, detailed according to the revenue and expenditure contents specified in Points 1 and 2, Section A, Part II of this Circular.

The revenue budget for road fees and the percentage rate (%) of regular expenditure over total revenue allocated to entities (detailed according to each toll station) by the Vietnam Highway Administration and the Department of Transport must be sent to the same-level finance agency and the Tax Authority, National Treasury where the entity with the toll station has registered transactions.

Based on the allocated revenue budget and the percentage rate (%) of regular expenditure over total revenue, entities prepare quarterly budgets (divided by month) and send them to the Tax Authority, National Treasury where the entity has registered transactions, while also sending them to the superior management agency.

2/ Preparation and allocation of budget during stable periods:    

2.1. For revenue budget:

Annually during the stable period, entities with toll stations prepare the revenue budget for road fees and submit it to the supervisory agency, as stipulated in Point 1.1, Section C, Part II of this Circular.

Based on the revenue budget for road fees allocated by the competent authority, the Vietnam Highway Administration (for entities with national highway toll stations), the Department of Transport (for entities with local road toll stations) allocate the revenue budget for road fees to the entity, as stipulated in Point 1.2, Section C, Part II of this Circular.

2.2. For expenditure budget:

Annually, based on the actual expenditure situation of the previous year, the assigned revenue for the planned year, the percentage rate (%) of regular expenditure retained over total revenue as prescribed; entities with toll stations prepare the budget for regular operational expenditure and increased infrastructure expenditure for toll stations and submit it to the superior supervisory agency, Tax Authority, and National Treasury where the entity has registered transactions for monitoring and management.

Specifically, the budget for increased infrastructure expenditure for toll stations must be approved by the superior supervisory agency before the entity can organize its implementation.

3. Implementation of the budget for revenue and expenditure:

3.1. Regarding revenue:

a) For toll stations on national highways:

Based on the actual road fee revenue collected, entities shall implement the following periodically:

For toll stations where the percentage rate of regular expenditure for organizing fee collection approved by the competent authority is less than 15%:

Deposit 80% of the actual fee revenue into the central treasury or repay capital and interest according to the project (for roads funded by loans, fee revenue is used to repay capital and interest).

Deposit 5% of the actual fee revenue into the account of the Vietnam Highway Administration opened at the Central National Treasury for the modernization fund of fee collection technology.

Retain a portion for regular expenditure for organizing fee collection according to the approved percentage rate (%) on the actual fee revenue. Any surplus shall be deposited into the balancing fund of the Vietnam Highway Administration opened at the Central National Treasury to balance for stations that are short.

For toll stations where the percentage rate of regular expenditure for organizing fee collection approved by the competent authority is 15%:

Deposit 80% of the actual fee revenue into the central treasury or repay capital and interest according to the project (for roads funded by loans, fee revenue is used to repay capital and interest).

Deposit 5% of the actual fee revenue into the account of the Vietnam Highway Administration opened at the Central National Treasury for the modernization fund of fee collection technology.

Retain 15% of the actual fee revenue for regular expenditure.

For toll stations where the percentage rate of regular expenditure for organizing fee collection approved by the competent authority is more than 15%:

Deposit 80% of the actual fee revenue into the central treasury or repay capital and interest according to the project (for roads funded by loans, fee revenue is used to repay capital and interest).

Deposit 5% of the actual fee revenue into the account of the Vietnam Highway Administration opened at the Central National Treasury for the modernization fund of fee collection technology.

Retain 15% of the actual fee revenue for regular expenditure.

b) For toll stations on local roads:

Based on the actual road fee revenue collected, entities shall retain a portion for regular expenditure according to the approved percentage rate. The remaining fee revenue shall be deposited into the local treasury or repaid capital and interest according to the project (for roads funded by loans, fee revenue is used to repay capital and interest).

3.2. Allocation of the centralized balancing fund managed by the Vietnam Highway Administration to entities with a regular expenditure retention rate over total revenue higher than 15% of revenue:

Based on the proportion of regular expenditure retained from the total revenue for each Toll Station, the amount of fees actually collected and submitted to the central budget, and the existing balance of the centralized adjustment fund, the Vietnam Highway Administration shall provide supplementary funding for regular expenditures to ensure the operation of Toll Stations. The amount of supplementary funding for regular expenditures for each Toll Station shall be determined as follows:

In case there is surplus in the adjustment fund for three consecutive years without being fully utilized for toll collection work, such surplus must be transferred to the fund for modernizing toll collection technology.

3.3. Expenditure for modernizing toll collection technology:

Based on the approved plan for modernizing toll collection technology, the existing balance of the investment fund for modernizing toll collection technology; the Vietnam Highway Administration shall allocate funds for units to implement.

3.4. On expenditure:

Based on the approved level of regular expenditure for toll collection and investment in modernizing toll collection technology, actual toll revenue deposited into the State Treasury, budget estimates of the unit, the disbursement order issued by the head of the unit, and payment vouchers in accordance with regulations; the State Treasury shall make advance payments or settlements and conduct expenditure control in accordance with current regulations. 

4Adjustment of expenditure budget:

During implementation, to align with the actual situation of the unit, each Toll Station may adjust the content of expenditure within the scope of the allocated regular expenditure budget (adjustment between different items of regular expenditure). The unit  shall not reallocate the investment budget for modernizing toll collection technology to regular operational expenditure for toll collection.

In case the actual toll revenue in a year is lower than the budget allocated by the competent authority, the Toll Stations must reduce their expenditure accordingly.

D - Accounting, settlement, and inspection of road fee income and expenditure.

1. Units organizing road fee collection must carry out accounting and settlement of road fee income and expenditure in detail for each Toll Station in accordance with the current accounting and statistical system and the provisions at point 8, section I, part II of Circular No. 109/2002/TT-BTC dated December 6, 2002 of the Ministry of Finance on the system of road fee collection, submission, and management and use.

The superior supervisory agency of the fee collection unit is responsible for inspecting and approving the settlement of road fee income and expenditure of subordinate units in accordance with current regulations.

2. The superior supervisory agency and relevant state agencies shall conduct inspections, audits, and controls over road fee income and expenditure activities in accordance with current regulations and this Circular.

III- Implementation Organization:

1. The Ministry of Transport, Vietnam Highway Administration (for units with Toll Stations on national highways), Department of Transport (for units with Toll Stations on local roads) shall base on the 2003 budgeted revenue-expenditure plan allocated by the competent authority; the implementation status of the 2002 budget, to allocate the 2003 road fee revenue budget and the proportion (%) of regular expenditure on total revenue for 2003 to units in detail for each Toll Station as a basis for stable implementation over three years (2003-2005).  For toll stations on national highways, the Department of Transportation (for units with toll stations on local roads) shall base on the revenue-expenditure budget assigned by the competent authority for the year 2003; the implementation situation of the budget in 2002, to allocate the road usage fee revenue budget, allocate the percentage (%) of regular expenditure over the total revenue for the year 2003 to each unit, detailing for each toll station as a basis for stable implementation over three years (2003-2005).

During the period of allocating a stable proportion (%) of regular expenditure on total revenue, if the State changes or adjusts regulations on salaries, increases the minimum wage, or changes budgetary expenditure standards, units shall cover any additional costs from the retained revenue for regular expenditure in accordance with regulations.

2. This Circular shall take effect fifteen days from the date of publication in the Official Gazette.

If there are any difficulties during implementation, units are requested to report to the Joint Ministries for review and appropriate modification./.