Decision No. 1916/QD-TTg dated November 29, 2017 of the Prime Minister on giving 2018 State budget estimates

THE PRIME MINISTER

DecisionNo. 1916/QD-TTg dated November 29, 2017 of the Prime Minister on giving 2018 State budget estimates

Pursuant to the Law on Government organization dated June 19, 2015;

Pursuant to the Law on State Budget dated June 25, 2015;

Pursuant to Resolutions of 14^thNational Assembly No.49/2017/QH14 dated November 13, 2017on the 2018 State budget estimates and No.50/2017/QH14 dated November 14, 2017 on distribution of the FY 2018 Central Government Budget;

At the request of the Minister of Finance and Minister of Planning and Investment,

HEREBY DECIDES:

Article 1.Giving 2018 State budget estimates

1. Give 2018 State budget estimates to ministries, ministerial agencies, Governmental agencies, other central agencies, Vietnam Electricity, Vietnam Tobacco Company and provinces, centrally-affiliated cities (Appendix enclosed)

2. Authorize Minister of Finance to give the following 2018 estimates of State budget revenues and expenditures to ministries, ministerial agencies, Governmental agencies, other central agencies and provinces, centrally-affiliated cities:

a) Revenues from fees and charges remitted to State budget by ministries, ministerial agencies, Governmental agencies and other central agencies

b) Expenditure on environmental protection activities in provinces and centrally-affiliated cities

c) Expenditure on national technology and science tasks

d) Recurrent expenditures on national target programs, detailed target programs according to fields, projects of each programs run by ministries, ministerial agencies, Governmental agencies and other central agencies

dd) Expenditure on marking boundaries between Vietnam and Cambodia, management of boundaries between Vietnam and Laos and implementation of three documents of land boundaries between Vietnam and China by the Ministry of Foreign Affairs

e) Dedicated additional funding for recurrent expenditure from central government to budget of each province and centrally-affiliated city according to each objective, task and target program based on the estimate decided by National Assembly

g) Dedicated additional funding from central government budget to budget of each province and centrally-affiliated city for the purpose of running the national target program for sustainable poverty reduction and national target program for modern rural construction

3. Authorize Minister of Planning and Investment to give the following criteria:

a) Give estimate of expenditure on training officials and students of Laos and Cambodia studying in Vietnam under the agreement between the Vietnam Government and Government of Laos and Cambodia to ministries, ministerial agencies, Governmental agencies and other central agencies allocate estimate of expenditure on training officials and students subject to such agreement currently in Vietnam before December 2017 and allocate funding estimate for training of the others before June 30, 2018.

b) Give estimate of central government budget expenditures to ministries, ministerial agencies, Governmental agencies and other central agencies (detailed estimate according to contents and component projects of national target programs and funding sources) and estimate of dedicated additional funding from central government budget to budget of each province and centrally-affiliated city running each national target program

Article 2. Implementing 2018 State budget estimates

1. The Ministry of Finance, Ministry of Planning and Investment shall instruct ministries, ministerial agencies, Governmental agencies, other central agencies, Vietnam Electricity, Vietnam Tobacco Company, provinces and centrally-affiliated cities to implement the 2018 State budget estimates in accordance with provisions of the Law on State Budget and Law on Public investment.

2. Ministries, ministerial agencies, Governmental agencies, People’s Committees of provinces and centrally-affiliated cities and relevant agencies and organizations as authorized shall take responsibility to:

a) Urge State-owned enterprises to fully remit revenues after those enterprise fulfill tax obligation and set aside funds as regulated to State budget and instruct the representative of State capital owner in the enterprise to urge such enterprise to timely remit revenues from dividend, profits from State capital contributed to joint-stock companies, limited liability companies with two or more members to State budget.

b) Restructure the budget according to the given estimate of expenditure on each subject matter with the aim of fostering the renovation of public service areas, adjust prices and charges for public service according to the roadmap to proper calculation of charge, encourage more public service providers to independently manage their financial affairs, reduce funding from budget to these service providers, increase funding for subjects conditional on policies, create resources for pay rate adjustment, increase expenditure on investment, purchase for improving public service quality and strictly follow policies for redundancy, establishment of lean administrative structure and efficient operation.

3. The Minister of Finance shall be obliged to:

a) Continue to distribute 100% revenues from VAT, special excise duty imposed on petrol products of Nghi Son Refinery to central government budget and stabilize the distribution rate of revenues from environmental protection tax imposed on domestic and imported petrol products as same as that in 2017 over the period of 2018-2020.

b) Remit 72% of profit of oil and gas allocated to host country, profits from capital contributed to project under the joint-venture agreement between Vietnam and Russia called "Vietsovpetro” and proceeds from reading documents in 2018 to State budget, 28% remaining amount shall be retained by PetroVietnam for investment as regulated.

c) Distribute revenues from charge for granting water right since 2018 in accordance with regulations in Decree No.82/2017/ND-CP dated July 17, 2017 of the Government on providing the calculation method and charge for granting water right as decentralized in Decree No.203/2013/ND-CP dated November 28, 2013 of the Government on defining the method of calculation and grant charge of mineral exploitation right.

d) Cooperate with the Ministry of Transport in preparing a plan for distributing road use fee to local authorities in 2018 in compliance with principles in Decree No.18/2012/ND-CP dated March 13, 2012 of the Government on road maintenance funds before January 15, 2018 and submit it to the Prime Minister for decision-making before January 31, 2018.

dd) Fulfill 2018 expenditure obligation of central government budget, to be specific as follows: estimates of expenditure on debts, expenditure on policies intended for human benefits promulgated such as subsidy for people participating in Resistance War Against American; one-time subsidy for soldiers fighting at the firing-line; electricity subsidy for low-income households and households subject to support policies, policies on tuition fee remission and support for learning cost, financial support for vocational education provided for demobilized soldiers and public security; purchase of health insurance for the poor and children under 6 years old, subsidy for social protection subjects, boarding school policy, policy intended for low-income households and near-poverty households in 2016-2020, etc, payment for yearly dues to international organizations, charge for evaluation of sovereign credit rating, additional charter capital for Vietnam Environmental Protection Fund, Peasant Assistance Fund, National Technology Renovation Fund and National Science and Technology Development Fund, financial support provided for organizations and entities employing ethnic minority living in mountainous areas or areas with seriously poor conditions, instruction and additional funding due to difference between the realized rate and State budget estimate rate in 2018.

e) Strictly control State budget deficit, local government budget deficit and loans of local government budget and seek effective solutions for reducing the budget deficit strengthen inspection and supervision of lending, loan use and debt payment, especially agreements on new loan, foreign loans and sovereign-guaranteed loans, not use loans under new loan agreement for recurrent expenditure in accordance with provisions of the Law on State Budget, except agreements that were signed or disbursed since 2017 and backwards. Manage public debts, Government’s debts and foreign debts of the country to make sure they do not exceed the prescribed limits.

4. The Minister of Planning and Investment is assigned to:

a) Send the proposal for funding allocated to efficient programs and projects under investment procedures as regulated to the Prime Minister for approval and send competent authorities a report on reduction of expected funding provided for slow-launching projects in pursuit of giving additional funding for highly successful projects and disbursement of assigned funding foster the progress of national mandatory projects and programs, necessary works under construction and housing support provided for people with meritorious services to the revolution.

b) Instruct ministries, ministerial agencies, agencies affiliated to the Government, other central agencies, People s Committees of provinces and centrally-affiliated cities to distribute investment capital for repaying outstanding debts arising from infrastructural construction and recovering advance funding from central government budget, resolutely reduce funding improperly distributed for the purpose of recovering advance funding and repaying outstanding debs arising from infrastructural construction, seek more solutions for preventing outstanding debts arising from infrastructural construction and minimized the adjustment to the plan for midterm public investment approved by competent authorities well manage the advance from State budget estimates and expenditure carried over to the next’s year budget in accordance with provision of the Law on State Budget.

5. For ODA loans and concessional loans in a year, if ministries, central government authorities and local authorities ask for additional estimates, they shall send a report to the Ministry of Planning and Investment (for expenditure on investment and development) and the Ministry of Finance (for recurrent expenditures under agreement for loans or disbursement since 2017 and backwards, if any) which is then submitted to the Prime Minister and sent to the Standing Committee of National Assembly for consideration.

6. For non-refundable aids in cash generated after the date of 2018 State budget estimates by National Assembly, the Minister of Planning and Investment (for non-refundable aids provided for programs and projects subject to obligatory recurrent expenditure and aids for non-project purpose) shall preside over and cooperate with relevant ministries and agencies, based upon agreements for aids signed by the State, Government, regulatory agencies and sponsors, authorization of the Prime Minister and on behalf of the Government, in sending a report on methods for using aids and providing additional estimates of these aids in 2018 to the Standing Committee of National Assembly and notify ministries, ministerial agencies, agencies affiliated to the Government and People’s Committees of provinces and centrally-affiliated cities for implementation.

7. Government authorities of provinces and centrally-affiliated cities are obliged to:

a) According to the reality, decide to efficiently run dedicated financial support programs from central government budget for successfully fulfill the program objective in accordance with provisions of laws and make sure reciprocal capital from local budget could entirely finance investment projects and national target programs under local management and projects launched in the locality partially funded by central government budget (if any) in compliance with provisions in force.

b) Continue to use revenues from lottery for investment and development since 2018, specifically as follows: Northern and central regions and Central Highlands shall allocate at least 60% while Southeast regions and Mekong delta shall allocate 50% of revenue estimate from lottery decided by People s Council of provinces to invest in education, vocational education and healthcare. Local authorities shall allocate at least 10% of revenue estimate to provide additional funding for tasks subject to national target programs for new rural construction. After the above-mentioned investment projects are entirely funded as approved by competent authorities, funding can be given to projects for dealing with climate change and other essential projects financed by local government budget.

If there is any increase in revenues in addition to the estimate during the implementation, local authorities shall proactively allocate funding for covering expenditure on investment in mandatory tasks, especially expenditures on education, vocational education, healthcare, agriculture, rural development and dealing with climate change.

c) Provide funding for inspecting, testing and discarding unsafe foods and investing in technical equipments equivalent to revenue from fines imposed on administrative violations for food safety which is remitted into local government budget to agencies in charge of handling local administrative violations for food safety in accordance with provisions of the Law on State Budget and Resolution No.43/2017/QH14 dated June 21, 2017 of National Assembly fostering implementation of the policy on food safety over the period of 2016 - 2020.

d) Allocate expenditures to ensure enough funding provided for mandatory tasks and additional tasks in 2018, fully finance promulgated policies and make sure all old policies have been financed.

dd) Work out solutions for ensuring enough financial source within annual estimates of local government budget expenditure given and other financial sources for implementing particular policies or fulfilling particular expenditure obligations approved by People s Council of province which are issued themselves and not ask for additional funding from central government budget.

e) Strive to increase revenues, limit expenditure and use surplus funding provided for the pay rate adjustment policy from local government budget (after meeting local requirement for pay rate adjustment) in order to implement social security policies promulgated by central government authorities and reduce funding from central government budget for these policies.

g) Decide estimates of State budget revenues in localities, estimates of local government budget expenditure, local government budget deficit, total loans of local government budget including loans for making up budget deficit and for repaying the principles), expenditure on debts arising from loan interests as authorized in accordance with provisions of the Law on State Budget. Decide estimates of recurrent expenditure of local government budget ensuring economical and efficient expenditure and save more sources for investment and development as well as restructure budget in accordance with regulations in Resolution No.07-NQ/TW dated November 18, 2016 of the Politburo on guidelines and methods for restructuring State budget and managing public debs for the purpose of ensuring sustainable finance of the country.

Article 3.Based upon 2018 estimates of State budget revenues and expenditures given, Ministers, Directors of ministerial agencies, Governmental agencies, other central agencies, Vietnam Electricity, Vietnam Tobacco Company and the heads of provinces and centrally-affiliated cities shall allocate estimates of State budget revenues and expenditures to affiliated entities and inferior entities in such a way that State budget expenditures, including use of ODA loans and concessional loans shall be well managed and those loans shall be used economically within the given estimate for preventing losses and strictly exercising State finance-budget disciplines, complying with provisions of the Law on economical use and waste prevention, Law on preventing and fighting against corruption and Law on management and use of public properties.

1. For estimates of State budget expenditure on investment and development of projects subject to midterm allocation of State budget in the period of 2016 – 2020 which have received adequate investment decisions, foster the progress of national essential projects, projects carried over to be completed in 2018; provide housing support for people with meritorious services to the revolution, reciprocal capital for programs and projects with ODA as well as projects under PPP agreements, provide funding for repaying at least 20% of total outstanding debts arising from infrastructural construction and 20% of advance funding from central government budget in the period of 2016 - 2020 remaining unpaid. After the above-mentioned tasks are entirely funded, any financial source left shall be provided for new projects under investment procedure in accordance with provisions of laws, especially for urgent projects for preventing, fighting against and dealing with floods and natural disasters and protecting environment.

2. Allocate recurrent expenditure to make sure policies for human benefits and mandatory tasks assigned are fully funded Economically control recurrent expenditures, sharply reduce funding for conferences, seminars, festivities, overseas study or survey and provide funding for equipment purchase as regulated and encourage the provision of fixed funding for public motor vehicles. Continue to reform administrative affairs and encourage application of information and technology in parallel with improvement of supervision in respect of management of State budget revenues and expenditures. Only promulgate policy that ask for funding from State budget where necessary and where there is financial source provided for such policy Strictly comply with provisions of the Law on economical use and waste prevention, Law on Corruption prevention and Law on Management and use of public properties.

Article 4.Adjusting pay rate in 2018

1. From July 01, 2018, statutory pay rate will be increased from VND 1.3 million per month to VND 1.39 million per month and pension, social insurance allowances, monthly allowances as regulated (for people guaranteed by State budget) and allowances intended for people with meritorious will be raised by the amount increase in statutory pay rate.

2. According to given State budget estimates, ministries, ministerial agencies, Governmental agencies and other central agencies shall proactively assign obligatory expenditures in combination with rearrangement of organizational structure, redundancy and increase in revenues as regulated in order to ensure financial balance for increasing statutory.pay rate to VND 1.3 million from January 01, 2018 to June 30, 2018 and to VND 1.39 million from July 01, 2018.

3. Government authorities in provinces and centrally-affiliated cities shall keep creating financial sources for pay rate adjustment in 2018 from a part of revenues retained under regime issued by agencies or entities; save 10% of recurrent expenditure (excluding salaries, salary-based allowances, amount of similar nature of salary and allowances for people as regulated) and 50% of revenue increase of local government budget (exclusive of revenues from land use levy and lottery) and outstanding sources for pay rate adjustment in 2017 carried over (if any).

The Minister of Finance is assigned to establish and give criteria for saving 10% of recurrent expenditure in 2018 to local authorities for the purpose of creating resources used for pay rate adjustment in each province, centrally-affiliated as regulated.

After pay rate is adjusted as required, local authorities shall proactive use their resources for pay rate adjustment to implement central social security policies. Dedicated additional funding from central government budget shall be provided for some local authorities to finance the deficit funding as required.

Over the period of 2018 - 2020, local authorities that distribute their revenues to central government budget according to fixed distribution rate but still have enough funding sources to adjust pay rate and implement social security policies without requiring additional funding from central government budget shall be entitled to use outstanding sources for adjusting pay rate to invest in projects in accordance with provisions of laws.

4. Funding from central government budget shall be used to adjust pension, social insurance allowances, monthly allowances as regulated (for people guaranteed by State budget) and allowances intended for people with meritorious services as well as assist some local authorities with low budget resulting in finance balance difficulty in giving extra pay to employees as regulated.

Article 5.Allocating funding for recurrent expenditure on national target programs, target programs and unallocated amounts:

1. For national target programs:

a) With regard to national target programs for sustainable poverty reduction: The Ministry of Labor War Invalids and Social Affairs is assigned to approve lists of poor districts subject to financial support policy according to Resolution No.30a/2008/NQ-CP dated December 27, 2008 of the Government on the support program for fast and sustainable poverty reduction in 61 poor districts and send a plan for allocating remaining estimates of recurrent expenditures in 2018 to the Ministry of Finance which is then submitted to the Prime Minister for decision-making within 10 days from the day on which the decision from Prime Minister is issued.

b) For national target programs for modern rural construction. The Ministry of Agriculture and Rural Development is assigned to prepare a plan for allocating remaining estimates of recurrent expenditures in 2018 before January 15, 2018 and send it to the Ministry of Finance which is then submitted to the Prime Minister before January 31, 2018.

2. For target programs:

a) Supervisory agencies of target programs for information and technology, assistance in dealing with facilities for public purposes that cause severely environmental pollution, assistance in education in mountainous areas, ethnic minority areas and areas with poor conditions shall quickly submit contents of target programs to the Prime Minister for approval and issuance before January 31, 2018.

b) After the decision on approval for target programs from the Prime Minister is issued:

The Ministry of Finance shall notify estimate of recurrent expenditures made for each target program to each supervisory agency of such program within 5 working days.

Supervisory agencies of programs shall prepare a funding allocation plan and send it to the Ministry of Finance within 10 working days from the day on which the notification of funding estimates is received.

The Ministry of Finance shall appraise and submit the plan for allocating estimate of recurrent expenditures on target programs in 2018 to the Prime Minister for decision-making within 10 working days from the day on which the allocation plan from supervisory agencies of those programs is received.

3. With regard to amounts not included in recurrent expenditures of estimate of central government budget expenditure in 2018, the Ministry of Finance, as authorized, shall preside over and cooperate with relevant agencies in preparing an allocation plan and send it to the Prime Minister,

Article 6.Estimate of expenditure from revenues from fines imposed on administrative violations in traffic safety of central government budget:

Over the period of 2018 - 2020, dedicated additional funding from central government budget provided for local government budget shall be equal to 70% of revenue from fines imposed on administrative violations regarding traffic safety in 2016 which is remitted to central government budget. 30% remaining revenue amount shall be given to the Minister of Public Security to cover expenditure on assuring traffic safety of agencies affiliated to the Ministry of Public Security, purchase of means and equipments serving work of traffic police force and finance local authorities with low revenues for their public security to maintain traffic safety in localities.

Article 7.Time for detailed allocation of 2018 State budget estimates and implementation results reporting:

1. Based upon obligatory revenues and expenditures of State budget given by the Prime Minister, ministries, ministerial agencies, Governmental agencies, other central agencies, provinces and centrally-affiliated cities shall give 2018 estimates of State budget revenues and expenditures to each entity before December 31, 2017, publish those estimates and send a report on results of estimate allocation to the Ministry of Finance and the Ministry of Planning and Investment in accordance with provisions of the Law on State Budget.

2. The Ministry of Finance, Ministry of Planning and Investment shall make a consolidated report on results of 2018 State budget estimate allocation of ministries, ministerial agencies, Governmental agencies, other central agencies, provinces and centrally-affiliated and submit such report to the Prime Minister which is then sent to National Assembly and publish such report in accordance with provisions of the Law on State Budget.

Article 8.This Decision takes effect on the signing date.

Article 9.Ministers, Directors ofministerial agencies, Governmental agencies, other central agencies, Chairperson of People s Committees of provinces and centrally-affiliated cities, Chairperson of Board of Directors and General Director of Vietnam Electricity, Chairperson of Member Council and General Director of Vietnam Tobacco Company, Directors of agencies and entities funded by State budget shall take responsibility to implement this Decision./.

The Prime Minister

Nguyen Xuan Phuc

* All Appendices are not translated herein.