Circular No. 98/1997/TT-BTC guides the financial handling of public service units within state-owned corporations.

CIRCULAR

Guidelines for financial management of public service units within State-owned Corporations State

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Pursuant to Article 47 of the Law on State-Owned Enterprises promulgated on April 30, 1995, which stipulates that public service units shall operate on a revenue-expenditure basis and generate income from providing services, research contracts, and training both within and outside State-owned Corporations;

Pursuant to Article 9 of the Law on Corporate Income Tax promulgated on May 22, 1997, which permits the inclusion of costs for scientific and technological research, innovations, improvements, and educational and health funding into business operation expenses according to prescribed regulations;

Pursuant to Resolution No. 90/CP dated August 21, 1997 of the Government on the direction and policy for socializing education, healthcare, and cultural activities;

The Ministry of Finance hereby provides guidelines for financial management of public service units within State-owned Corporations as follows:

I. GENERAL PROVISIONS

1. Public service activities related to scientific research, healthcare, and education and training within State-owned Corporations shall be conducted based on the principle of self-financing without allocation from the State budget.

2. Sources of income for public service units include:

- For internal public service activities within State-owned Corporations, such income shall be recorded as part of production and business operation expenses of the State-owned Corporations.

- For public service activities serving areas outside the State-owned Corporations, the State-owned Corporations must charge fees to cover the costs of these activities.

3. Based on their financial capacity and conditions for restructuring public service units, State-owned Corporations must gradually reduce subsidies for scientific research, healthcare, education, and training expenses from the State budget.

By no later than 2001, State-owned Corporations must fully finance their own public service activity expenses.

II. PROGRESSIVE REDUCTION SCHEDULE

1. Based on the level of public service funds allocated by the State in 1997 for State-owned Corporations, and considering their financial capacity and operational conditions, the Ministry of Finance sets out the reduction schedule as follows:

Total expenditure on public services funded from the State budget in State-owned Corporations

- In 1998, not exceeding 50% compared to the expenditure in 1997

- In 1999, not exceeding 50% compared to the expenditure in 1998

- In 2000, not exceeding 50% compared to the expenditure in 1999

- From 2001 onwards, the State budget will not provide additional funding for these activities.

Depending on the production and business operations and financial situation of each State-owned Corporation, and the total amount of State budget allocated annually by the National Assembly for this purpose, the Ministry of Finance will allocate specific support levels and notify each State-owned Corporation accordingly.

2. Specifically, for the six research institutes under State-owned Corporations including:

- The Institute of Industrial Chemistry - under the Chemical Corporation

- The Energy Institute - under the Electricity Corporation

- The Oil Institute - under the Oil Corporation

- The Post and Telecommunications Science Institute - under the Posts and Telecommunications Corporation

- The Aviation Science Institute - under the Vietnam Airlines Corporation

- The Post-Harvest Technology Institute - under the Northern Food Corporation, they shall implement Decision No. 782/TTg dated October 24, 1996 of the Prime Minister and Circular No. 395/KCM-TCCBCP dated April 12, 1997 of the Ministry of Science, Technology, and Environment and the Civil Service Committee of the Government. Specifically:

- In 1998: 100%

- In 1999: 80%

- In 2000: 60%

- In 2001: 40%

3. State-owned Corporations need to promptly review all public service activities to reasonably restructure their scale and organizational structure. Activities that are unnecessary should be reassigned or transferred to relevant functional sectors for management.

III. IMPLEMENTATION PROVISIONS

This Circular takes effect from January 1, 1998. All previous provisions contrary to this Circular are abolished.

During implementation, if Ministries, sectors, or State-owned Corporations encounter any difficulties, they are requested to report to the Ministry of Finance for timely study and amendment./.