Circular No. 91/2016/TT-BTC guiding the preparation of the state budget estimate for 2017

CIRCULAR

Guidelines for preparing the state budget estimate for 2017

Pursuant to the State Budget Law No. 83/2015/QH13 dated June 25, 2015 2015;

Pursuant to Decree No. 215/2013/NĐ-CP dated December 23, 2013 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Finance;

At the proposal of the Director of the State Budget Department;

The Minister of Finance issues this Circular guiding the preparation of the state budget estimate for 2017.

PART I

ASSESSMENT OF THE IMPLEMENTATION OF STATE BUDGET TASKS IN 2016

Article 1. Basis for assessing the implementation of state budget tasks in 2016

Ministries, central agencies, and localities when assessing the implementation of revenue and expenditure of the state budget in 2016 must base on the following grounds:

1. The state budget tasks for 2016 approved by the National Assembly at Resolution No. 99/2015/QH13 dated November 11, 2015 on the state budget estimate for 2016 and Resolution No. 101/2015/QH13 dated November 14, 2015 on the allocation of the central budget for 2016; Decision No. 2100/QĐ-TTg and No. 2101/QĐ-TTg dated November 28, 2015 on the allocation of the state budget estimate for 2016, Decision No. 2526/QĐ-TTg dated December 31, 2015 on the allocation of development investment capital from the state budget for 2016, and other decisions on supplementary budgets during the implementation of the state budget in 2016 by the Prime Minister

2. Directives and management instructions of the Government and the Prime Minister, including: Resolution No. 01/NQ-CP dated January 7, 2016 on key tasks and solutions to guide the implementation of the socio-economic development plan and the state budget estimate for 2016 (Resolution No. 01/NQ-CP); Resolutions of monthly regular meetings of the Government; Directive No. 22/CT-TTg dated June 3, 2016 on strengthening guidance and implementation of financial tasks and state budget in 2016 (Directive No. 22/CT-TTg).
3. Circular No. 206/2015/TT-BTC dated December 24, 2015 of the Ministry of Finance on organizing the implementation of the state budget estimate for 2016.
4. The situation of implementing financial-state budget tasks in the first six months of the year; measures to strive to exceed the state budget estimate for 2016 in the remaining months decided by competent authorities.
5. Conclusions and recommendations of functional agencies regarding administrative reform, inspection, audit, complaint resolution, thrift, waste prevention, anti-corruption when organizing the implementation of revenue and expenditure of the state budget; enhancing financial discipline, preventing tax loss, transfer pricing, tax recovery, reducing overdue tax, results of implementing social welfare policies, policies for people with meritorious service, poor households, ethnic minorities, remote areas; ensuring funding for national defense, security, political stability, and social order.

Article 2. Assessment of the implementation of state budget revenue tasks

Based on the results of state budget revenue in the first six months of the year, forecast the production-business situation, market price trends in the last six months of the year, review and assess factors affecting revenue increases and decreases, propose management measures to strive to exceed the state budget revenue estimate for 2016 approved by the National Assembly and People's Councils at various levels; focusing on the following contents:

1. Assess and analyze each factor influencing state budget revenue in 2016, including:

a) Favorable and unfavorable conditions in production-business activities and import-export operations of enterprises and economic organizations under various economic sectors due to domestic and international factors; production volume, consumption, selling prices, profits of major goods and services;

b) Growth rate of retail sales and service revenue;

c) Growth rate of industrial value added;

d) Increase or decrease in investment capital of various economic sectors;

đ) Access to credit for new investment projects, expansion, and deepening investments by enterprises; real estate market trends.

In particular, clarify the impact of crude oil price fluctuations, agricultural product prices, drought and salinity intrusion, environmental incidents in some coastal provinces of North Central Vietnam, implementation of international economic integration commitments, implementation of Resolution No. 19-2016/NQ-CP dated April 28, 2016 of the Government on improving the business environment and competitiveness for 2016-2017 and beyond, monetary, credit, trade, investment, pricing policies, administrative reform, and implementation of Resolution No. 36a/NQ-CP dated October 14, 2015 on e-Government and other factors impacting the economy and state budget revenue in the first six months of the year; serving as a basis for evaluating state budget revenue in the remaining six months of 2016.

2. Evaluate the implementation and results of measures to manage state budget revenue according to Resolution No. 01/NQ-CP and Directive No. 22/CT-TTg; the implementation of tax policies revised and supplemented effective in 2016, including reducing corporate income tax rates; amending and supplementing certain provisions of the Value Added Tax Law, Special Consumption Tax Law, and Tax Administration Law according to Law No. 106/2016/QH13; amending the scale of resource tax rates according to Resolution No. 1084/2015/UBTVQH13; adjusting the tax calculation base for imported goods and domestically produced goods subject to special consumption tax according to Circular No. 195/2015/TT-BTC dated November 24, 2015 of the Ministry of Finance; guiding the collection, payment, and management of profit and dividends distributed to state-owned enterprises according to Circular No. 61/2016/TT-BTC dated April 11, 2016 of the Ministry of Finance; implementing regulations on taxes for organizations and individuals conducting oil exploration and exploitation activities according to Circular No. 36/2016/TT-BTC dated February 26, 2016 of the Ministry of Finance, and other tax policies, fees, and charges affecting the implementation of revenue tasks in 2016.

3. Evaluation of the handling and recovery of overdue tax payments

The results of urging and enforcing the recovery of overdue tax debts in 2016; implementing recommendations from the State Audit Office, the Government Inspectorate, and decisions to recover taxes made by tax authorities at all levels in the implementation of inspection and examination plans and tasks to enforce tax laws.

Review and accurately determine the amount of tax debt as of December 31, 2015, estimate the amount of new tax debt expected in 2016, the amount of tax debt written off according to regulations, the amount of tax debt recovered in 2016, and the amount of tax debt as of December 31, 2016. Summarize and classify the total amount of overdue tax debt according to regulations.

4. Evaluate the situation of declaration, the amount of VAT refunds generated by enterprises' declarations in 2016, the estimated amount of VAT refunds for enterprises in 2016, linked with strengthening post-refund monitoring, inspection, auditing, and handling of improper VAT refunds, especially assessing the impact on the amount of VAT refunds in 2016 and state budget revenue when implementing provisions related to VAT deduction and refund according to Law No. 106/2016/QH13 amending and supplementing certain articles of the Value Added Tax Law, Special Consumption Tax Law, and Tax Administration Law. Propose recommendations to adjust the management mechanism for VAT refunds to ensure strict compliance with legal regulations.

5. Results of cooperation between ministries, central agencies, and localities in managing, resolving difficulties, and addressing issues related to state budget revenue collection, public auction of state assets, land auctions, and organizing inspections, audits, urging, and recovering tax debts, preventing revenue loss, and combating transfer pricing; existing problems, difficulties, and solutions to address them.

6. Results of collecting fees, charges, administrative violation fines, penalties, and other confiscations in the first six months and projected for the whole year of 2016.

Article 3. Evaluation of the Implementation of Expenditure Tasks for Investment Development

Ministries, central agencies, and localities should focus on evaluating the following contents:

1. Work on planning and implementing the investment development expenditure budget for 2016

a) The situation of establishing, reviewing, approving investment policies, making investment decisions for public investment projects, and adjusting public investment projects (if applicable) according to the Public Investment Law and government directives.

b) The situation of allocating and assigning the investment development expenditure budget for 2016: The allocation and assignment of capital, the assignment of the investment development expenditure budget to projects and works in 2016 according to the Public Investment Law; the time of allocation and assignment of plans to project owners; the results of budget allocation to recover pre-funded state budget capital and settle construction investment arrears from the state budget source.

c) The situation of implementing the investment development expenditure budget for 2016: The implementation of the investment development plan for 2016, including the value of completed work volume, funds settled up to the end of the second quarter of 2016 (including payment for completed work volume and advance payment for investment), estimated work volume and funds to be settled by December 31, 2016 (with detailed appendices for each project, data on approved total investment, cumulative funds settled up to the end of 2015, and the 2016 funding plan attached).

Progress in implementing important programs and projects, national target programs, and projects using ODA and preferential loans (disbursement progress, ability to ensure counterpart funds). For programs and projects using ODA and preferential loans within the state budget balance, determine the ability to exceed the allocated disbursement budget (if applicable) and send it to the Ministry of Planning and Investment and the Ministry of Finance for consolidation and reporting to the Prime Minister for submission to the Standing Committee of the National Assembly for consideration and decision.

d) Summary and evaluation of the situation of state budget construction investment arrears according to the Prime Minister's directives (Directive No. 27/CT-TTg dated October 10, 2012, Directive No. 14/CT-TTg dated June 28, 2013, and Directive No. 07/CT-TTg dated April 30, 2015); the amount of arrears as of December 31, 2015, the amount processed in 2016, and the estimated amount remaining as of December 31, 2016 (detailing the list and amount of arrears for each project).

đ) The amount of state budget capital advanced to investment projects as of June 30, 2016, that has not yet been recovered.

e) The situation of mobilizing, recovering, and repaying various sources of capital (including temporary advances held by the State Treasury) to implement infrastructure investment projects.

g) The situation of finalizing investment projects that have been completed, specifying: the number of projects completed but not finalized according to regulations by the end of June 2016 and projected by the end of 2016; reasons and solutions for handling.

h) Evaluation of difficulties in investment management under the Public Investment Law, Construction Law, and related legal documents, and recommendations for solutions.

2. Evaluation of the results of implementing support development expenditure tasks

a) The situation of implementing preferential state investment credit (total credit growth, sources of capital to implement the credit growth plan, state budget capital to cover interest rate differences,...); beneficiaries; scope of benefits; responsible entities for implementing credit policy; lending interest rates (basis for determining interest rates, interest rate levels, preferential credit interest rate policy in case market interest rates change); administrative reform in loan approval procedures.

b) The situation of implementing credit policies for poor households, near-poor households, newly escaped poverty households, particularly difficult ethnic minority households; student and college student credit; credit for job creation and labor export; credit for clean water and rural environmental sanitation programs;... Each credit program must clearly specify its scope, beneficiaries, borrowing conditions; operational results, outstanding loans, deposit interest rates, amounts of interest rate subsidies,...

c) The situation of implementing the national reserve plan for 2016, including: the situation of implementing purchase, sale, import, export, rotation, and emergency release plans for national reserves (details by type, quantity, and value of goods). For increased purchases and replenishments of national reserves, details must be provided according to the quantity and types of national reserve goods organized through bidding, contracts signed, and warehoused according to the plan up to the reporting period.

Article 4. Evaluation of the implementation of regular expenditure tasks

1. The situation regarding the allocation, assignment, and execution of the State budget estimates for the first six months of the year and the forecast for the entire year 2016 by each assigned spending sector; results in achieving targets, tasks, large programs, and projects; difficulties, obstacles, and proposed measures to address them.

2. Results of suspending the implementation and recovering funds allocated in the annual budget at the beginning of the year for ministries, central agencies, and localities but not distributed or not implemented by June 30, 2016, as stipulated in Resolution No. 01/NQ-CP of the Government and Directive No. 22/CT-TTg of the Prime Minister.

3. Implementation results and difficulties, obstacles arising from the execution of tasks, mechanisms, policies, and expenditure systems, along with recommendations for immediate solutions in 2016, specifically:

a) For systems and policies: Overall assessment of all policies and systems; review and recommend supplements and amendments to policies and systems that are inconsistent with reality.

b) Situation and results of implementing the mechanism of self-management and self-responsibility for staffing and administrative management expenses according to Decree No. 130/2005/NĐ-CP dated October 17, 2005, and amended and supplemented by Decree No. 117/2013/NĐ-CP dated October 7, 2013 of the Government.

c) Situation of implementing the first six months and the possibility of completing the entire year 2016 for tasks assigned in Decision No. 695/QĐ-TTg dated May 21, 2015 of the Prime Minister on the implementation plan for Decree No. 16/2015/NĐ-CP dated February 14, 2015 of the Government on the mechanism of self-management of public service units (Decree No. 16/2015/NĐ-CP); situation of implementing the self-management mechanism for public service units in each field (education, health, science and technology, etc.): Number of units granted self-management by type; adjustment schedule for service fees and charges; impact on the State budget (revenue of public service units and additional State budget support for public service units - if applicable).

d) Some key points to focus on in evaluating State budget spending sectors:

Education, training, and vocational education sector: Assessment of the implementation of preferential policies in education, training, and vocational education, the implementation of tuition fee adjustments in 2016 according to the roadmap set out in Decree No. 86/2015/NĐ-CP of the Government. Ministries and central agencies direct public higher education institutions approved by the Prime Minister under Resolution No. 77/NQ-CP dated October 24, 2014 of the Government to specifically assess the progress and results of implementing the pilot project until the end of 2016; responsibilities of higher education institutions in fulfilling commitments; responsibilities of ministries, sectors, and provincial people's committees in supervising, guiding, and supporting higher education institutions in implementing the pilot project.

Health sector: Assessment of the implementation of preferential policies in the health sector; situation and impact of adjusting medical service fees under Circular Joint No. 37/2015/TTLT-BYT-BTC of the Ministry of Health and the Ministry of Finance; situation of self-management classification of public service units.

Assessment of the implementation of the Project to Reduce Hospital Overcrowding approved in Decision No. 92/QĐ-TTg dated January 9, 2013 of the Prime Minister. Assessment of implementation and resource allocation for food safety assurance work as prescribed.

National reserve activities: Assessment of the implementation of the import, export, storage, insurance, etc., of national reserve goods for the first six months of 2016 and the forecast for the entire year 2016, and the implementation of plans to purchase rice for student boarding support and afforestation as decided by the Prime Minister.

4. Assessment of the implementation of socialization mechanisms (total resources and resource structure invested by society for development in the industry and sector; number of facilities invested from socialized resources; achievements; existing issues, causes, and solutions).

Article 5. Evaluation of the implementation of National Target Programs and Target Programs.

1. The ministries responsible for the programs shall report on progress to the Prime Minister for approval of the National Target Programs (NTPs) and Target Programs (TPs) for the period 2016-2020.

2. Localities shall evaluate the distribution, allocation, and implementation of the budget estimates for NTPs and TPs; advantages, difficulties, and obstacles (if any) in their implementation.

3. For TPs implemented with both domestic and foreign sources of funding, there shall be a specific evaluation of the disbursement of foreign funds, financial mechanisms, and any recommendations (if any).

4. The ability to balance the local state budget (LSB) and mobilize the community to implement NTPs and TPs within their jurisdiction. In cases where the level of mobilization is lower than expected, the reasons and responsibilities of relevant agencies must be clarified.

Article 6. Evaluation of the situation regarding the assurance of funds for implementing the salary adjustment in 2016.

Report on staffing, salary fund, allowances, subsidies; determine the need and source of funds for implementing salary reform according to Decree No. 47/2016/NĐ-CP dated May 26, 2016 of the Government stipulating the basic salary for civil servants, public officials, and armed forces personnel.

Provinces and centrally-administered cities shall supplement reports on the salary fund, allowances, and subsidies implemented in 2014 (based on final accounts data), implemented in 2015, and projected for 2016; report on additional funding needs to increase the basic salary to VND 1,150,000 per month in 2015 and projected needs for 2016 according to Forms 16, 17, 18, and 19 of this Circular.

Article 7. Evaluation of the implementation of the State Budget tasks in 2016 by provinces and centrally-administered cities.

In addition to the general requirements mentioned above, provinces and centrally-administered cities shall focus on evaluating the following additional contents:

1. Evaluation of efforts to mobilize financial resources at the local level to fulfill the task of socio-economic development.

2. The ability to balance the LSB compared to the budget estimate, measures already taken and those planned to ensure the balance of the LSB under conditions where it is forecast that the local revenue will not reach the budget estimate as per Directive No. 22/CT-TTg, including: striving to increase revenue, economizing expenditure, cutting expenditure, utilizing local financial resources (50% of the local budget reserve, sources from salary reform, surplus budget in 2015; financial reserve fund,...). Please quantify each source, the amount used, and the remaining amount (if any).

3. Implementation of social welfare policies:

3.1 Policies regularly allocated in the 2016 budget:

Social assistance policy according to Decree No. 136/2013/NĐ-CP dated October 21, 2013 of the Government, Law on Elderly People and Law on Persons with Disabilities; policy supporting lunch fees for children aged 3-5 years old according to Decision No. 239/QĐ-TTg dated February 9, 2010 and Decision No. 60/2011/QĐ-TTg dated October 26, 2011 of the Prime Minister; policy supporting boarding students from ethnic minorities according to Decision No. 82/2006/QĐ-TTg dated April 14, 2006 of the Prime Minister; policy supporting half-day boarders according to Decision No. 85/2010/QĐ-TTg dated December 21, 2010 of the Prime Minister; policy supporting secondary school students in areas with extremely difficult economic and social conditions according to Decision No. 12/2013/QĐ-TTg dated January 24, 2013 of the Prime Minister; policy supporting fee exemptions and educational expenses for students from poor and near-poor households according to Decree No. 86/2015/NĐ-CP dated October 2, 2015 of the Government; policy supporting educational expenses for ethnic minority students according to Decision No. 66/2013/QĐ-TTg dated November 11, 2013 of the Prime Minister; policy supporting students with disabilities from poor and near-poor households attending educational institutions according to Joint Circular No. 42/2013/TTLT-BGDĐT-BLĐTBXH-BTC dated December 31, 2013 of the Ministry of Education and Training, Ministry of Labor, Invalids and Social Affairs, and Ministry of Finance; policy supporting health insurance card purchases for the poor, ethnic minorities, children under six years old, near-poor individuals, students, and members of households engaged in agriculture, forestry, fisheries, and salt production with average living standards; policy supporting convenience fees for poor households according to Decision No. 28/2014/QĐ-TTg dated April 7, 2014 of the Prime Minister; policy supporting the protection and development of rice-growing land according to Decree No. 35/2015/NĐ-CP dated April 13, 2015 of the Government on the management and use of rice-growing land; policy exempting water resource fees according to Decree No. 67/2012/NĐ-CP dated September 10, 2012 of the Government;... (for each policy, please provide a detailed report on the target group and the funding requirements for implementation according to Form 13 of this Circular).

3.2 Other policies:

Policy for those who participated in wars to protect the country and international missions; housing support policy for families of revolutionary martyrs; policy for poor and near-poor households and ethnic minorities in particularly difficult areas (rapid poverty reduction program for poor districts according to Resolution No. 30/2008/NQ-CP dated December 27, 2008 of the Government; support for production land, residential land, houses, and clean water for poor ethnic minority households with difficult living conditions,...); policy providing rice for students in schools in areas with extremely difficult economic and social conditions according to Decision No. 36/2013/QĐ-TTg dated June 18, 2013 of the Prime Minister; policy for young intellectuals volunteering in rural and mountainous areas during the period 2013-2020 according to Decision No. 1758/QĐ-TTg dated September 30, 2013 of the Prime Minister; unemployment insurance policy; support for disease prevention and disaster response, flood relief, famine relief for people, support for fishermen encountering risks while fishing in distant waters; policy supporting interest rate subsidies and interest rate compensation to reduce post-harvest losses for agricultural and aquatic products; policy for developing aquaculture according to Decree No. 67/2014/NĐ-CP dated July 7, 2014 of the Government, etc., in the locality.

4. Report specifically on the budget allocation (including the amount of targeted State budget support for the local budget, if any) and the use of the local budget reserve to carry out security and defense tasks; prevent, control, and mitigate the consequences of natural disasters, epidemics among humans and livestock, and crops; the situation of using the local budget reserve up to June 30, 2016.

5. The situation of distribution and allocation from land use revenue for investment in local infrastructure projects, implementation of cadastral surveys, establishment of land ownership records, and issuance of land use right certificates; and the allocation of land development funds from land use revenue and land lease fees according to Decree No. 43/2014/NĐ-CP dated May 15, 2014 of the Government.

6. The situation of mobilizing capital for local budget infrastructure investment (including the situation of mobilizing and allocating capital to repay both principal and interest up to June 30, 2016), including: beginning-of-year debt balance, estimated annual mobilization, amount of debt repayment due, estimated mobilization surplus as of December 31, 2016. Among which, the local budget debt balance for mobilization according to Clause 3, Article 8 of the State Budget Law includes all loans from state credit for investment in irrigation channel consolidation programs, rural road development, aquaculture infrastructure, and rural craft village infrastructure (the detailed debt balance and loan repayment of the local budget should be reported according to Form No. 9 of this Circular).

7. The situation of revenue and expenditure from lottery sales; the use of lottery revenue to invest in important social welfare projects in the locality, focusing on investments in education, healthcare, and agricultural infrastructure in rural areas as prescribed.

8. Implementation of the National Target Program for New Rural Development: Number of communes completing program targets, funding implemented, detailed by each source (State budget, local budget, government bonds, other sources of mobilization, etc.).

9. Implementation of the National Target Program for Poverty Reduction: Funding implemented, detailed by each source (State budget, local budget, other sources of mobilization, etc.).

Chapter II

BUILDING THE STATE BUDGET ESTIMATE FOR 2017

Article 8. Objectives and Requirements

1. In 2017, being the second year of the 2016-2020 Socio-Economic Development Plan, the first year of implementing the 2015 State Budget Law, and also the first year of the stable period of the State Budget from 2017 to 2020, it is very significant in achieving socio-economic development goals for the entire 2016-2020 period and financial strategic goals by 2020.

2. The construction of the State Budget Estimate must be carried out strictly in accordance with the provisions of the 2015 State Budget Law and guiding documents, consistent with the objectives and tasks of the 2016-2020 Socio-Economic Development Plan approved by the National Assembly and the socio-economic development objectives and tasks for 2017.

3. The construction of the State Budget revenue and expenditure estimate for 2017 must comply with legal regulations on revenue and expenditure systems and budget management; based on principles, criteria, and standards for allocating regular State Budget expenditures for 2017 and principles, criteria, and standards for allocating investment expenditures from the State Budget for the 2016-2020 period decided by competent authorities. Emphasize the policy of thorough thrift and waste prevention from the budget preparation stage.

4. Ministries, central agencies, and localities, based on evaluating the implementation of socio-economic development tasks in 2016, closely adhere to the socio-economic development objectives and tasks for 2017 and the 2016-2020 period of their sectors, fields, and localities, and the medium-term public investment plan for 2016-2020 to determine key tasks to implement in 2017; proactively prioritize tasks according to urgency and feasibility of implementation in 2017 to complete assigned tasks, programs, projects, and proposals approved by competent authorities based on allocated State Budget resources and other legitimate sources of mobilization.

5. Ministries and central agencies managing sectors and fields continue to comprehensively review all systems and policies (especially social welfare policies) to abolish or integrate them within their authority, or submit to competent authorities for abolition or integration of overlapping, redundant, and ineffective policies; only propose new policies when the budget is balanced; proactively forecast sufficient funding needs for newly decided policies, systems, and tasks.

6. Prepare the State Budget Estimate in accordance with the timeframes stipulated in the 2015 State Budget Law; provide detailed explanations on legal basis, calculations, and specific justifications.

Article 9. Building the State Budget Revenue Estimate

The State Budget Revenue Estimate for 2017 shall be built in accordance with current policies and regulations; it shall comprehensively incorporate all tax revenues, fees, and other revenues into the State Budget as stipulated by the State Budget Law 2015; based on an accurate assessment of the actual implementation of State Budget revenue collection in 2016, forecasting the situation of investment, production and business development, and trade activities including import and export in 2017, taking into account domestic and international factors; calculating specifically the factors increasing or decreasing revenue due to the implementation of new tax laws and regulations, and the phased reduction of tariffs according to international commitments; factors increasing revenue from enhanced inspection and audit of tax declaration and payment by organizations and individuals, revenues discovered through inspection and audit work, and increased revenue from resolute efforts to combat revenue loss and collect overdue taxes from previous years, and revenues from investment projects that have completed their preferential periods.

On this basis, the goal is to achieve a ratio of State Budget revenue to GDP of approximately 20-21% in 2017. The domestic revenue estimate (excluding oil revenue, land use fee revenue, and lottery revenue) should increase by at least 13-15% compared to the estimated actual performance in 2016 (excluding revenue changes due to policy shifts). The revenue estimate from import and export activities should increase by at least 5-7% compared to the estimated actual performance in 2016. The specific increase in revenue for each locality will depend on local conditions, characteristics, and be consistent with the economic growth rate in the area. Guidance and assignment of revenue collection agencies for taxpayers shall be carried out according to separate guidelines issued by the Ministry of Finance.

1. Building the Domestic Revenue Estimate

a) Localities must build the State Budget Revenue Estimate for their areas in 2017, ensuring the aforementioned goals and requirements, comprehensively incorporating all sources of revenue generated within their areas (including revenue at the commune, ward, and town level), especially foreign contractor tax revenues, domestic contractor tax revenues when implementing investment projects within their areas, and newly operational projects; based on a comprehensive evaluation of the actual implementation in 2015, the socio-economic development plan for the 2016-2020 period, the requirements and capabilities to fulfill economic and budgetary tasks in 2016, forecasting economic growth in 2017, and the review of the 2017 revenue estimate as announced by the competent authority.

b) The State Budget Revenue Estimate for 2017 must accurately calculate each revenue item, tax category, and revenue field for each locality according to current tax, fee, and other State Budget revenue regulations; new regulations effective since 2016 that continue to impact State Budget revenue in 2017, and proposed regulations expected to be amended, supplemented, and applied in 2017; particularly noting the State Budget Law 2015, the Law on Fees and Charges, and guiding documents effective from the 2017 fiscal year; the Law Amending and Supplementing Certain Provisions of the Value Added Tax Law, the Special Consumption Tax Law, and the Tax Administration Law; Resolution No. 1084/2015/UBTVQH of the Standing Committee of the National Assembly regarding the issuance of the scale of resource tax rates; business registration fees (replacing business license fees); corporate income tax for centrally-accounted enterprises in the trading and service sectors, and environmental protection tax on domestically produced gasoline and diesel; lottery revenue according to the tax regulations and financial management systems for lottery businesses as stipulated in Circular No. 01/2014/TT-BTC dated January 2, 2014, issued by the Ministry of Finance.

c) Fully consolidate revenue from mineral exploitation rights fees for permits issued by the central government and provincial people's committees; fines and penalties for administrative violations according to the law collected by central and local state agencies; revenue from the sale of state assets, including revenue from land use right transfers and changes in land use purposes, by state agencies, political organizations, political-social organizations, public service units, wholly state-owned limited liability companies, and enterprises with central and local government participation before privatization and restructuring, and other units and organizations under central and local management.

d) Ministries, sectors, and localities must consider revenue sources linked to the vigorous implementation of measures to strengthen tax collection enforcement, auditing, anti-price shifting, anti-smuggling, anti-commercial fraud, VAT refund supervision, enhanced monitoring and management to prevent revenue loss for businesses and individuals in the trading and service sectors, as directed by the Government, Prime Minister, and Ministry of Finance; revenue from urging the implementation of audit recommendations, government inspections, and the recovery of back taxes and refunds for the State Budget.

2. Building the Revenue Estimate from Import and Export Activities

The revenue estimate from import and export activities shall be built:

a) Based on forecasts of the growth rate of merchandise and service trade turnover subject to tax in the context of integration, promoting trade promotion activities, consolidating and expanding export markets, and structural changes in goods, particularly traditional goods with main revenue sources and newly emerging goods.

b) Must take into account key influencing factors such as domestic and international market prices of major revenue-generating goods; exchange rates between the Vietnamese dong and the currencies of strategic trading partners; reduced revenue impacts from applying special preferential tax rates or VAT refunds according to phased tariff reductions under signed and upcoming Free Trade Agreements, levels of trade facilitation, and the influence of technical barriers; the scale and progress of major investment projects involving raw material and equipment imports; and changes in domestic and international policies.

3. Fees and Charges Revenue to be Submitted to the State Budget and Retained Only as Per Regulations

a) Pursuant to the Law on Fees and Charges and the State Budget Law 2015, from the 2017 fiscal year, certain fee revenues that are converted into service prices will not be included in the budget revenue forecast; charges paid in full into the state budget, fees retained partially or fully by public service units collecting such fees and deducted from state agencies when state agencies are allocated operating costs from fee revenues. Ministries, central agencies, and localities need to review and submit to competent authorities for removal of fees and charges that do not comply with regulations, exclude some items transferred to service prices, ensuring compliance with the list prescribed in the Law on Fees and Charges; report specifically each item of fees and charges (details: amount collected, amount retained according to regulations, amount paid into the state budget) based on the basis for allocating budget revenue forecasts and expenditure forecasts and budget estimates from retained fee revenues.

For education fee revenues (not included in the list of fees and charges as stipulated in the Law on Fees and Charges), starting from 2017, they will no longer be criteria for allocating budget revenue and expenditure forecasts for ministries and central agencies. However, ministries and central agencies continue to implement sources from this revenue and other retained revenues according to regulations to create resources for salary reform as prescribed.

b) Revenues from public services not included in the list of fees and charges, revenues transferred to a pricing mechanism, not part of state budget revenue, not consolidated into the budget revenue forecast for fees and charges under the state budget, but must prepare separate budgets and develop usage plans to be submitted to supervisory authorities as prescribed.

Article 10. Building the state budget expenditure forecast

When building the state budget expenditure forecast for 2017, ministries, central agencies, and localities need to pay attention to the following contents:

1. Building the state budget expenditure forecast for public investment

a) Starting from 2017, the state budget expenditure forecast for public investment includes both investment from government bonds and revenue from lottery activities. The plan for issuing government bonds during the period 2017-2020 will be presented by the Government to the National Assembly for approval at its second session of the 14th term.

b) The state budget expenditure forecast for public investment should be consistent with the socio-economic development plan for 2017, the five-year socio-economic development plan 2016-2020, the medium-term public investment plan 2016-2020, and the Socio-Economic Development Strategy 2011-2020; ensuring compliance with the Public Investment Law, including only allocating funds for programs and projects expected to be included in the medium-term public investment plan 2016-2020; adhering to the principles, criteria, and allocation standards for state budget public investment funds during the 2016-2020 period as stipulated in Resolution No. 1023/NQ-UBTVQH13 dated August 28, 2015 of the Standing Committee of the National Assembly and Decision No. 40/2015/QĐ-TTg dated September 14, 2015 of the Prime Minister.

c) When building the state budget expenditure forecast for public investment, ministries, sectors, and localities need to detail areas according to the State Budget Law 2015 and prioritize the budget allocations as follows: (i) allocate funds to complete and accelerate the implementation of national target programs, important national projects, target programs, and significant projects for national socio-economic development; (ii) counterpart funds for projects using ODA and preferential loans from foreign donors; state investment in projects implemented through PPP models; handling outstanding construction debts and recovering advance payments; (iii) allocate remaining funds to new projects if all necessary investment procedures are completed.

d) For ministries, central agencies, and local agencies allowed by competent authorities to use proceeds from asset sales, including land use fees attached to assets on land for investment purposes in 2017, must prepare a public investment expenditure forecast from these proceeds and consolidate it into the public investment expenditure forecast of ministries, central agencies, and local agencies according to Decisions of the Prime Minister: No. 11/2016/QĐ-TTg dated March 7, 2016, No. 69/2014/QĐ-TTg dated December 10, 2014, No. 71/2014/QĐ-TTg dated February 15, 2014, No. 140/2008/QĐ-TTg dated October 21, 2008, No. 09/2007/QĐ-TTg dated January 19, 2007.

đ) For the expenditure forecast for interest rate subsidy on investment credit and policy credit of the State, based on the actual situation in 2016, predict changes in the target groups, policies, and tasks for 2017 (forecast the impact of implementing the new multidimensional poverty standard according to Decision No. 59/2015/QĐ-TTg dated November 19, 2015 of the Prime Minister for the period 2016-2020) to build the expenditure forecast according to regulations.

2. Building the expenditure forecast for national reserves

From 2017, the national reserve fund becomes a component of state budget expenditures, outside of public investment expenditures. Based on the National Reserve Development Strategy until 2020, the national reserve targets specified in the National Reserve Law, and the projected inventory level of the national reserve fund as of December 31, 2016, management agencies of the national reserve fund under ministries and central agencies shall develop plans for additional purchases (detailing each category of national reserve goods), reductions in sales, rotation of national reserve goods, and build the state budget expenditure forecast for purchasing national reserve goods in 2017 with a spirit of thorough thrift, focusing on strategic, essential goods with high usage frequency, capable of responding promptly in emergency situations; prioritizing national reserve goods for disaster prevention, mitigation, post-disaster recovery, epidemic control, firefighting, famine relief, and national defense and security.

3. Building the expenditure forecast for regular expenses

a) Ministries, central agencies, and localities base their regular expense expenditure forecast on political tasks, the socio-economic development plan for 2017, and the verified budget revenue and expenditure forecast for 2017, preparing the regular expense expenditure forecast by sector, ensuring compliance with policies, regulations, and the principles, criteria, and allocation standards for the 2017 state budget regular expense expenditure forecast.

The ministries, central agencies, local agencies, and units using state budget funds shall prepare regular expenditure budgets strictly in accordance with the nature of the state budget revenue, striving for maximum savings. The procurement, maintenance, and repair budgets must be based on the standards, norms, and management and usage regulations for state assets as stipulated. In this regard, the procurement budget for machinery and equipment shall comply with Decision No. 58/2015/QĐ-TTg dated November 17, 2015, issued by the Prime Minister; the procurement budget for transportation means can only be implemented after reviewing, reorganizing, and disposing of existing vehicles that still fall short of the prescribed standards and norms as stipulated in Decision No. 32/2015/QĐ-TTg dated August 4, 2015, issued by the Prime Minister. Minimize both the number and scale of festivals, conferences, seminars, summaries, signing ceremonies, groundbreaking ceremonies, awarding honors, and receptions; limit funding for overseas research and survey missions and other non-urgent tasks.

b) The administrative management budget shall be developed in conjunction with the reduction plan for staffing levels and the reorganization of administrative structures from 2016 to 2020 as per Resolution No. 39-NQ/TW of the Politburo on reducing staffing levels and restructuring the cadre and civil servant workforce; encourage increased revenue generation, cost savings, and faster staffing reductions than the planned timeline to increase income for cadres and civil servants.
c) Ministries, central agencies, and localities shall strictly adhere to the schedule for pricing public services funded by the state budget as stipulated in Decree No. 16/2015/NĐ-CP of the Government, promote the autonomous mechanism for public service organizations, and calculate the specific potential for revenue increases of each public service organization within their respective fields to reduce support from the state budget. Based on this, determine the capacity to allocate resources to directly increase support for individuals who have contributed to the revolution, the poor, and policy beneficiaries to access and benefit from essential public services, increase spending on tasks without revenue sources, thereby restructuring budget spending in each field and gradually restructuring state budget spending.
d) Develop and incorporate into the regular expenditure budget of relevant ministries, central agencies, and localities the budget to ensure the operation of functional forces responsible for administrative violation penalties and other expenditures previously funded by retained non-tax revenues, which under the State Budget Law 2015, should be remitted to the state budget.

đ) Additional notes when preparing the state budget for 2017:

- Special expenses, price subsidies: From 2017, special expense and price subsidy tasks will be allocated within corresponding budget sectors; they will no longer be separate sectors. Ministries, central agencies, and localities with responsibilities in these two sectors shall prepare detailed budgets and provide specific explanations for the Ministry of Finance to consolidate and report to the competent authority for decision-making.

+ Scientific research expenses: Prepare budgets for scientific and technological tasks approved by the competent authority and provide detailed explanations for each task.

+ Regular tasks according to functions (including regular operational funds for scientific and technological organizations) shall be prepared in accordance with Circular Joint No. 121/2014/TTLT-BTC-BKHCN dated August 25, 2014, issued by the Ministry of Finance and the Ministry of Science and Technology, guiding the preparation, management, utilization, and settlement of regular function-related task funds for public scientific and technological organizations.

+ National, ministerial, and grassroots-level scientific and technological tasks and activities supporting the management of scientific and technological tasks by authorized agencies shall be prepared in accordance with Circular Joint No. 55/2015/TTLT-BTC-BKHCN dated April 22, 2015, issued by the Ministry of Finance and the Ministry of Science and Technology, guiding the establishment, allocation, and settlement of scientific and technological task budgets utilizing the state budget.

+ Other non-regular tasks of scientific and technological organizations shall be prepared in accordance with the State Budget Law 2015 and implementing guidelines.

- Education and training expenses: Provide explanations for the basis of preparing the budget to implement policies on tuition fee exemptions and reductions, and financial support for educational costs, seniority allowances for education staff, preferential policies for teachers and education managers in areas with particularly difficult economic and social conditions,...

- Health care expenses: Provide detailed explanations for the basis of calculating the required funds to implement the Hospital Overcrowding Reduction Project in 2017 according to each project and task and the sources of funds for implementation; the state budget funds needed to ensure payment of salaries and special allowances not included in health service prices, special allowances for disease control as stipulated; the budget for implementing food inspection, testing, disposal of unsafe food, inspection, prevention of smuggling, commercial fraud, and fake goods in food safety;...

- Economic affairs expenses: Developed based on the volume of tasks assigned by the competent authority and the budget expenditure standards and norms; focus on allocating funds for important tasks: maintenance and repair of key economic infrastructure systems (transportation, water conservancy,...) to extend their usage time and investment efficiency; funds for planning work; implementation of agricultural, forestry, fishery, and industrial promotion tasks; boundary demarcation and marker placement tasks; policies to support the development of aquaculture;...

- Administrative management expenses, clearly explain the following contents:

+ The staffing level in 2017 (the number assigned by the competent authority in 2016 minus the number reduced in 2016 plus any additions in 2016 if applicable), including the actual number present at the time of budget preparation and the number yet to be recruited according to the approved quota (if any).

+ Determine the salary fund and allowances based on the basic salary level of 1,210,000 VND/month (for a full year) guaranteed by the State Budget, including: (i) The salary fund and allowances for the number of positions approved and actually present at the time of budget preparation, determined based on the salary scale according to rank, grade, and position; salary allowances and contributions under the system (social insurance, unemployment insurance, health insurance, trade union fees); (ii) The salary fund and allowances for the number of positions approved but not yet recruited, estimated based on the basic salary level of 1,210,000 VND/month, a salary coefficient of 2.34/position, and contributions under the system.

+ Explain the basis for preparing the budget for special expenditure items (legal basis, content of expenditure, amount of expenditure, etc.) in 2017 with the spirit of thrift and efficiency.

4. Ministries managing sectors and fields, in addition to preparing the State Budget revenue and expenditure plan for 2017 (the part directly implemented by the ministry), need to calculate and determine the funding requirements to implement mechanisms and policies issued by competent authorities in 2017, accompanied by detailed explanations of the calculation bases.

5. Mechanism for generating sources for salary reform

In 2017, continue implementing the mechanism for generating sources for salary reform to adjust the basic salary level higher than 1,210,000 VND/month (if applicable) as prescribed.

6. Prepare the budget for implementing national target programs (NTPs) and target programs (TPs).

Based on the Prime Minister's decision approving each NTP, TP, relevant ministries responsible for the programs shall prepare the budget for NTPs and TPs, including:

- Investment capital expenditure consistent with the medium-term public investment plan from 2016 to 2020 and criteria, allocation standards for state budget investment capital from 2016 to 2020 stipulated in Decision No. 40/2015/QĐ-TTg dated September 14, 2015 of the Prime Minister.

- Recurrent expenditure for NTPs and TPs shall be prepared based on the objectives and tasks to be implemented in 2017.

7. For programs and projects using official development assistance (ODA) funds and concessional loans

Implement the preparation of the State Budget for 2017 in accordance with the Law on State Budget Management, the Law on Public Debt Management, the Law on Public Investment, and guiding documents, clearly specifying ODA funds, concessional loans from donors, non-reimbursable aid, and counterpart funds for each program and project, and in line with the nature of the use of funds (investment capital and recurrent expenditure) of the project area and corresponding sectors.

The budget for ODA and concessional loan funds must ensure consistency with the disbursement schedule agreed with donors, the ability to provide counterpart funds, and implementation capacity. Minimize additional supplements outside the assigned budget during implementation. For new programs and projects, only proceed if they are truly effective and compatible with the ability to disburse ODA funds according to signed agreements and approved by the Prime Minister.

For programs and projects involving several central ministries, agencies, and localities, the main management agency of the program or project shall prepare detailed budgets for each central ministry, agency, and locality; provide specific explanations on the allocation basis to the Ministry of Finance and the Ministry of Planning and Investment for consolidation and submission to competent authorities for decision.

8. Allocation of contingency reserves in the State Budget

The State Treasury and local budgets at all levels shall allocate contingency reserves in accordance with the provisions of the Law on State Budget Management 2015 to proactively respond to natural disasters, floods, epidemics, and to carry out important and urgent tasks arising outside the budget.

9. Budget allocation from retained revenue sources

Ministries, central agencies, and localities shall prepare the budget allocation from retained revenue sources (fees and other money-raising contributions) in accordance with the provisions set forth in Clause 1 and Clause 3 of this Article and consolidate them in the overall budget allocation of ministries, central agencies, and localities.

10. Based on the verification of revenue and expenditure in 2017, ministries, central agencies, and localities shall prepare the budget allocation carefully and in detail according to the fields specified in the Law on State Budget Management 2015, for each task, and each subordinate budget-using unit; after working with the Ministry of Finance and the Ministry of Planning and Investment, central ministries and provincial-level cities under the Central Government shall immediately implement the work of preparing the distribution plan for the 2017 State Budget of their respective ministries, agencies, and localities, so that when receiving the State Budget allocated by the Prime Minister, they can proactively submit to competent authorities for decision on the distribution and allocation of the State Budget to budget-using units before December 31, 2016, in accordance with the provisions of the Law on State Budget Management 2015.

11. Ministries, central agencies, and local agencies and units shall report the financial revenue and expenditure situation in 2016 and the projected financial revenue and expenditure plan for 2017 of state financial funds outside the budget under their management as stipulated in Clause 11, Article 8 of the Law on State Budget Management 2015, along with the 2017 State Budget.

Article 11. Budget Preparation for State Financial Plan

The year 2017 is the first year of the stabilization period of the State Financial Plan for the 2017-2020 phase as stipulated in the Law on State Budgets 2015; the preparation of the revenue and expenditure budget for the State Financial Plan for 2017 and the 2017-2020 phase must closely adhere to the national and local socio-economic development goals and tasks for 2017 and the 2016-2020 phase; the allocation of revenue sources and expenditure responsibilities shall be carried out according to the provisions of the Law on State Budgets 2015 and guiding documents; principles, criteria, and allocation standards (for investment and recurrent expenditures) must ensure sufficient resources to implement central regulations and policies in accordance with the Law on State Budgets.

In addition to general guidelines on state budget preparation work, the preparation and construction of the State Financial Plan budget should pay attention to the following main contents:

1. Preparing the local government revenue budget

Localities must prepare the total revenue from taxes, fees, and other revenues on their territory as prescribed in Article 7 of the Law on State Budgets 2015 and relevant laws.

Based on the five-year socio-economic development plan targets for the 2016-2020 phase, the ability to achieve economic and social indicators and the state budget in 2016, and forecasts of economic growth rates and the scope of state budget revenue as stipulated in the Law on State Budgets 2015 and guiding documents, forecast revenue for each sector, field, and economic entity in each locality and new revenue sources arising on the territory in 2017 to accurately calculate each revenue field and item according to regulations. Analyze and evaluate specific impacts on revenue increases and decreases affecting the state budget revenue forecast for 2017 by locality, revenue field, revenue item, and tax type.

2. Regarding the preparation of the State Financial Plan expenditure budget

Based on the local state budget revenue forecast, the 100% share of state financial plan revenue as stipulated in the Law on State Budgets 2015, and the balanced expenditure standard for the state financial plan according to the criteria and allocation standards for state budget (investment and recurrent expenditures) as decided by the Standing Committee of the National Assembly and the Prime Minister's Decision, determine the percentage distribution of shared revenue between the Central State Budget and the Local State Budget, the amount of supplementary balance transferred from the Central State Budget to the Local State Budget (if any). On this basis, based on the socio-economic development tasks of the locality for the 2016-2020 phase and the socio-economic development goals for 2017, current policy and index systems, and the actual situation of each locality, the Department of Finance shall take the lead in coordinating with relevant agencies to assist the People's Council at the provincial level to submit to the People's Council at the same level for decision: Allocation of revenue sources and expenditure responsibilities during the 2017-2020 budget stabilization period and the allocation standard for the 2017 Local State Budget for each lower-level local authority to determine the supplementary balance transfer from higher-level budgets to lower-level budgets and the percentage distribution of shared revenue among local government budgets for the years within the 2017-2020 stabilization period in line with the actual situation of the entire locality; ensuring the allocation standard for important tasks (education and training, vocational training, science and technology fields) does not fall below the levels required by Party resolutions, National Assembly decisions, and the Prime Minister's assignments (specifically, for the research science and technology budget, it is only allocated to the provincial budget, not to the district or commune budgets in accordance with the Law on State Budgets 2015). At the same time, implement the following main contents:

a) For the investment expenditure budget in the balanced State Financial Plan; based on the provisions of the Investment Law and requirements for the medium-term public investment plan 2016-2020, on the basis of the investment expenditure budget in the balanced State Financial Plan according to the Prime Minister's Decision No. 40/2015/QĐ-TTg dated September 14, 2015 on the principles, criteria, and allocation standards for capital investment by state budget for the 2016-2020 phase, prioritize funding for infrastructure construction tasks, focusing on major projects and works of the locality to complete and put into use in 2017; review and supervise strictly the budget allocation for infrastructure construction projects such as economic zones, industrial parks, where infrastructure projects have significant socio-economic development implications not only for the locality but also for the region, before implementation, actively seek advice and supervision from central agencies, feedback from professional organizations, and related localities to ensure overall economic efficiency of the locality and region; focus on poverty reduction, job creation, and handling social evils;...

b) For the supplementary targeted investment capital budget from the Central State Budget to the Local State Budget, which is prepared based on the local budget balance capacity, the implementation of the supplementary targeted budget from the Central State Budget to the Local State Budget in 2016, current policies and mechanisms, important programs and tasks implemented under the targeted supplementary mechanism from the central government to the locality, and the National Assembly's Resolution on national target programs, criteria, and allocation standards for investment capital and the medium-term public investment plan for 2016-2020, prepare the supplementary targeted budget from the Central State Budget.

Ensure adequate matching funds for ODA projects on the territory under the responsibility of the locality; proactively calculate and allocate sources to settle outstanding construction debts and debts that need to be repaid when due.

Allocate the investment expenditure budget from land use revenue to invest in economic and social infrastructure projects, resettlement projects, and land preparation for construction; proactively allocate and establish a land development fund according to Decree No. 43/2014/NĐ-CP dated May 15, 2014 of the Government; use at least 10% of land use revenue and land rental revenue to carry out land surveying, registration, establishment of land data files, and issuance of land use rights certificates as required by the Prime Minister's Directive No. 1474/CT-TTg dated August 24, 2011 and Directive No. 05/CT-TTg dated April 4, 2013.

d) Regarding lottery revenue (XSKT): From 2017, this revenue is included in the budget estimate for balanced state budget revenue, to be used for investment in training and development, including: For provinces in the Northern, Central, and Central Highlands regions, at least 60% of the estimated revenue from lottery activities, as decided by the Provincial People's Council, shall be allocated for investment in education, vocational training, and healthcare. For provinces in the Southeast and Mekong Delta regions, at least 50% of the estimated revenue from lottery activities, as decided by the Provincial People's Council, shall be allocated for investment in these fields. Localities shall allocate at least 10% for the National Target Program on New Rural Development. After ensuring funding for completing investment projects in the aforementioned fields that have been approved by competent authorities, any remaining revenue (if any) shall be allocated for climate change response projects and other important projects within the scope of state budget investment. Any additional revenue realized from lottery activities compared to the budget estimate assigned by the Provincial People's Council (if any) may be proactively allocated for investment in important projects, prioritizing education, vocational training, healthcare, agriculture, rural areas, and climate change response.

e) For infrastructure investment tasks pursuant to resolutions of the Politburo and decisions of the Prime Minister, based on the objectives, tasks, and investment capital needs as prescribed, the results of investments up to the end of 2015, and the capacity to implement in 2016, localities shall proactively build and calculate their tasks for 2017, including proactively allocating and arranging state budget and financial resources according to regulations to carry out these tasks, gradually reducing dependence on supplementary funds from the central state budget.
g) In building the budget expenditure plan for 2017, localities shall proactively calculate and allocate sources as prescribed to implement salary reform expenditures.

h) Building the budget repayment plan for principal and interest:

According to the State Budget Law 2002, provincial budgets are allowed to mobilize domestic capital under Clause 3, Article 8 for investment and must allocate funds to repay principal and interest on the amounts raised from annual balanced investment capital of the locality. According to the State Budget Law 2015, starting from 2017:

- For interest repayment, fees, and other expenses: Allocate as a separate item within the balanced provincial budget.

- For principal repayment: Allocate from sources as stipulated in Clause a, Point 3.4, Section 3 of this Article; if the estimated outstanding debt limit as of December 31, 2016 exceeds the borrowing limit set by the State Budget Law 2015, then in the 2017 budget and subsequent years, the provincial budget must allocate a portion of its share of state budget revenue to reduce the medium-term public investment plan for 2016-2020 to increase principal repayment, ensuring that the outstanding debt does not exceed the borrowing limit set by the State Budget Law 2015.

3. Provincial budget deficit: Based on the borrowing limit set by the State Budget Law 2015, the actual outstanding debt as of the end of 2016, and the need for additional capital mobilization for investment and debt repayment, localities propose the provincial budget deficit for 2017.

Based on the public debt limit, domestic capital mobilization capacity, and debt repayment sources, the Ministry of Finance will propose the overall state budget deficit, including the central government deficit and the deficit of all provincial budgets, and the deficit of each province (if applicable), to be reviewed and decided upon by the competent authority according to the State Budget Law 2015.

Along with proposing the provincial budget deficit plan as stipulated in Clause 5, Article 7 of the State Budget Law 2015, localities need to determine the total borrowing amount of the provincial budget, including borrowing to cover the provincial budget deficit and borrowing to repay the provincial budget principal; wherein:

3.1. The provincial budget deficit is covered by the following sources: a) Domestic borrowing through the issuance of local government bonds and other domestic loans as prescribed by law; b) Borrowing from the central government loan fund for local government loans.

3.2. Borrowing to cover the provincial budget deficit as specified in Clause 3.1 above does not include borrowing to repay principal.
3.3. A provincial budget may incur a deficit when it meets the following provisions and conditions:

a) It can only be used to invest in projects under the medium-term public investment plan decided by the Provincial People's Council as stipulated in Point a, Clause 5, Article 7 of the State Budget Law;
b) The annual provincial budget deficit does not exceed the annual provincial budget deficit determined by the National Assembly for each province as stipulated in Point e, Clause 5, Article 7 of the State Budget Law;
c) Within ninety days from the end of the previous fiscal year, there shall be no overdue debts for loans that need to be repaid in the previous fiscal year. In special cases, the Ministry of Finance shall submit to the Government and the National Assembly for consideration and decision;
d) Borrowing to cover the provincial budget deficit is mainly sourced from medium and long-term loans. Annually, based on market capital trends, the Ministry of Finance shall submit to the Government and the National Assembly for the minimum proportion of medium and long-term loans for covering the provincial budget deficit;

đ) When comparing with the borrowing limit, the provincial budget debt includes debt from the following sources: borrowing from the State Treasury, borrowing from the Vietnam Development Bank, issuing local government bonds, borrowing from the central government loan fund, and other domestic loans as prescribed by law. The provincial budget debt, including borrowing to cover the deficit as per the budget estimate, does not exceed the borrowing limit set forth in Clause 6, Article 7 of the State Budget Law 2015.

e) Determining the provincial budget revenue share being greater than, equal to, or less than the regular expenditure as prescribed in Clause 6, Article 7 of the State Budget Law 2015 is based on the provincial budget revenue and expenditure estimates decided by the National Assembly for the budget year.

3.4 Repayment of principal on loans

a) Sources for repayment of principal on loans include:

- Loans for principal repayment decided annually by the National Assembly and Provincial People's Councils; + Surplus of the provincial budget (determined by the difference between the total provincial budget revenue estimate and the total provincial budget expenditure estimate of each locality in a fiscal year);

- Remaining balances of the central budget and provincial budgets as stipulated in Clause 1, Article 72 of the State Budget Law;

- Increase revenue and reduce expenditure compared to the budget estimate during the implementation of the State Budget in accordance with point a, Clause 2, Article 59 of the State Budget Law;

b) All principal debts due must be fully paid on time in accordance with commitments and signed contracts.

c) The payment of principal debt must be managed and recorded through the National Treasury.

Chapter III

IMPLEMENTATION

Article 12. Responsibilities of ministries, agencies managing national target programs, and target programs

1. Coordinate with central ministries and agencies and relevant localities to propose tasks and funding levels for the implementation of national target programs and target programs in 2017, and submit them to the Ministry of Finance and the Ministry of Planning and Investment before July 20, 2016.

2. Prepare plans for allocating the 2017 budget estimates for each central ministry and agency and each province and centrally-administered city, and submit them to the Ministry of Finance and the Ministry of Planning and Investment for consolidation within the deadline specified in the notification of funding levels for 2017 for national target programs and target programs issued by the Ministry of Finance and the Ministry of Planning and Investment.

Article 13. Responsibilities of ministries, central agencies, and localities

1. Based on the announced inspection figures, ministries, central agencies, and provincial and municipal people's committees shall guide and announce the inspection figures regarding the budget estimates for revenue and expenditure to subordinate budget units and lower-level budgets in accordance with regulations.

2. The Ministry of Planning and Investment shall take the lead and coordinate with the Ministry of Finance to prepare and develop plans for allocating expenditures for public investment projects (including plans for allocating funds for public investment projects under national target programs and target programs), and submit them to the Ministry of Finance before August 31, 2016.

3. Ministries and sectors managing state reserves shall prepare plans for state reserves and budget estimates for state reserve expenditures, and submit them to the Ministry of Finance before July 20, 2016.

4. The organization of work to draft, compile, and report the 2017 budget estimate shall be carried out in accordance with the provisions of the State Budget Law 2015, the Public Investment Law, and guiding documents, including this Circular. As the guiding documents for the State Budget Law 2015 have not yet been issued, central ministries and agencies shall implement reporting forms according to the provisions of Circular No. 59/2003/TT-BTC dated June 23, 2003, of the Ministry of Finance and additional forms prescribed in this Circular; localities shall implement reporting forms according to the provisions of this Circular, and submit them to the Ministry of Finance and the Ministry of Planning and Investment before July 20, 2016.

Article 14. Regarding discussions on the budget estimate, forms for preparing and reporting the 2017 State Budget Estimate

1. In 2017, the first year of the stable budget period from 2017 to 2020, financial authorities shall take the lead and coordinate with planning and investment authorities, tax authorities, and related authorities to organize discussions with lower-level people's committees to determine budget estimates for revenue and expenditure, the percentage (%) of revenue distribution between upper and lower-level budgets, and supplementary balances transferred from upper-level budgets to lower-level budgets.

2. For ministries and central agencies:

Summarize and report to the Ministry of Finance the State Budget Estimate according to the forms prescribed in Circular No. 59/2003/TT-BTC, additional forms (Form Nos. 2, 20, 21, 22, 23, 24, 25a, 25b, 26a, and 26b) prescribed in this Circular, and forms prescribed in Joint Circular No. 71/2014/TTLT-BTC-BNV dated May 30, 2014, of the Ministry of Finance and the Ministry of Home Affairs guiding the implementation of Decree No. 130/2005/NĐ-CP dated October 17, 2005, of the Government on the self-management and responsibility system for administrative management expenses of state agencies, and Decree No. 117/2013/NĐ-CP dated May 30, 2013, of the Government amending and supplementing certain articles of Decree No. 130/2005/NĐ-CP; pay special attention to drafting detailed budget estimates for important tasks of ministries and agencies to explain and report to the National Assembly about the budget estimates of each ministry and central agency.

3. For localities: Compile and report the provincial budget estimates according to the forms prescribed in this Circular (Form Nos. 1, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, and 19).

Article 15. Implementation Provisions

1. This Circular takes effect from August 10, 2016. The content, procedures, and deadlines for preparing the 2017 State Budget Estimate shall be implemented in accordance with the provisions of the State Budget Law 2015 and the guidance provided in this Circular.

2. During the preparation of the 2017 State Budget Estimate, if new policies and systems are issued, the Ministry of Finance will issue notifications to provide additional guidance; if any difficulties arise in organizing the preparation of the 2017 State Budget Estimate, please reflect these issues to the Ministry of Finance for timely resolution.