Decree No. 163/2016/ND-CP dated December 21, 2016 on detailing a number of articles of the Law on the State Budget

DECREE

Detailing a number of articles of the Law on the State Budget[1]

Pursuant to the June 19, 2015 Law on Organization of the Government;

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

At the proposal of the Minister of Finance;

The Government promulgates the Decree detailing a number of articles of the Law on the State Budget.

Chapter I

GENERAL PROVISIONS

Article 1.Scope and subjects of application

1. Scope of application:

a/ This Decree details a number of articles of the Law on the State Budget regarding formulation of budget estimates; budget collection and remittance; control and payment of budget expenditures; performance-based state budget management; budget account finalization; principles, conditions and competence for advance payment from budget estimates, payment of central budget expenditures brought forward from preceding years and use of budget contingency; use of financial reserve funds; disclosure of the state budget and public oversight of the state budget; and a number of other provisions;

b/ Contents on 5-year financial plans and 3-year financial and state budget plans; management and use of budget funds for a number of activities in the fields of national defense, security and foreign relations; special financial-budgetary mechanisms and policies for a number of provinces and centrally run cities; management of the state funds; and the regulation on consideration of and decision on budget estimates and allocation of local budgets and approval of final accounts of local budgets must comply with the Government’s separate regulations.

2. Subjects of application:

a/ State agencies, political organizations and socio-political organizations;

b/ Socio-politico-professional organizations, social organizations and socio-professional organizations that receive state budget support for their State-assigned tasks;

c/ Public non-business units;

d/ Other organizations and individuals related to the state budget.

Article 2.State budget revenues

1. Taxes and duties paid by organizations and individuals in accordance with the laws on taxes and duties.

2. Fees paid by organizations and individuals in accordance with law.

3. Charges for services provided by state agencies; these charges may be deducted for agencies that have to pay their operation expenses at a pre-fixed level.

4. Charges for services provided by public non-business units and state enterprises after subtracting amounts retained to cover service provision expenses in accordance with law.

5. Amounts remitted into the state budget, which are collected from the State’s economic activities, including:

a/ Profits shared to the host country and other revenues from oil and gas exploration and exploitation activities;

b/ Retrieved state capital amounts previously invested in economic organizations;

c/ Dividends and profits from joint-stock companies or limited liability companies with two or more members with state holdings;

d/ After-tax profits left after setting aside various funds of state enterprises;

dd/ Positive difference between revenues and expenditures of the State Bank of Vietnam;

e/ Recovered state loans (including principals and interests), except on-lent foreign loans of the Government.

6. Contributions raised from agencies, organizations and individuals in accordance with law.

7. Proceeds from the sale of state property, including those from transfer of land use rights or change of land use purposes for land managed by the State’s agencies, units or organizations.

8. Land use levies, land rentals and water surface rentals; levies to use sea areas; and rentals, and proceeds from the sale of, state-owned houses.

9. Revenues from property over which the state ownership is established; revenues from the grant of the mining right or right to exploit water resource.

10. Collected fines for administrative violations, other fines and revenues from seizures as prescribed by law.

11. Voluntary contributions of domestic and foreign organizations and individuals.

12. Non-refundable aid provided by foreign governments and overseas organizations and individuals to the Vietnamese State and Government and local state agencies.

13. Revenues from financial reserve funds as prescribed in Article 11 of the Law on the State Budget.

14. Other revenues as specified by law.

Article 3.State budget expenditures

1. Development investment expenditures, including:

a/ Expenditures for capital construction investment in projects in the fields specified in Clause 3 of this Article;

b/ Capital investment and support for enterprises providing public products and services under orders placed by the State, economic organizations, and central and local financial institutions; and investment of state capital in enterprises as prescribed by law;

c/ Other development investment expenditures as prescribed by law.

2. National reserve expenditures.

3. Current expenditures for the following fields:

a/ National defense;

b/ Security and social order and safety;

c/ Education-training and vocational training;

d/ Science and technology;

dd/ Health care, population and family;

e/ Culture and information;

g/ Radio and television broadcasting and news;

h/ Physical training and sports;

i/ Environmental protection;

k/ Economic activities;

l/ Activities of state agencies, agencies of the Communist Party of Vietnam, and socio-political organizations, including the Vietnam Fatherland Front, Vietnam General Confederation of Labor, Ho Chi Minh Communist Youth Union, Vietnam War Veterans’ Association, Vietnam Women’s Union, and Vietnam Peasants’ Association; and support for activities of socio-politico-professional organizations, social organizations and socio-professional organizations as prescribed by law;

m/ Social security activities, including implementation of social policies in accordance with law;

n/ Other activities eligible for current expenditures as prescribed by law.

4. Expenditures for payment of interests on, charges for, and expenses arising from, loans borrowed by the Government or provincial-level administrations.

5. The central budget’s aid for foreign governments and organizations.

6. Expenditures for loan provision in accordance with law.

7. Transfers to financial reserve funds.

8. Central budget expenditures brought forward from the current year to the subsequent year.

9. Budget-balancing transfers or targeted transfers from higher-level budgets to lower-level budgets.

Article 4.State budget deficit

1. State budget deficit includes deficit of the central budget and deficit of provincial-level budgets:

a/ Deficit of the central budget is the positive difference between the total expenditures and total revenues of the central budget in a budget year;

b/ Deficit of a provincial-level budget is the aggregation of deficits of the provincial-level budget of a locality, which is the positive difference between the total expenditures and total revenues of the provincial-level budget of such locality in a budget year.

2. Deficit of the central budget shall be offset with the following sources:

a/ Domestic borrowings from the issuance of government bonds or national construction debentures, and other domestic borrowings as prescribed by law;

b/ Foreign borrowings from official development assistance (ODA), concessional loans from foreign governments and financial institutions and international organizations; and the issuance of government bonds on the international market, excluding loans taken by the Government for on-lending to economic organizations.

3. Deficit of local budgets shall be offset with the following sources:

a/ Domestic borrowings from the issuance of municipal bonds and other domestic borrowings as prescribed by law;

b/ Borrowings from loans taken by the Government for on-lending to local budgets.

4. Borrowings to offset the budget deficit prescribed in Clauses 2 and 3 of this Article are exclusive of borrowings for payment of loan principals.

5. The provincial-level budget of a locality may incur deficit when complying with the following provisions and fully satisfying the following conditions:

a/ The budget is used only for investment in projects under the medium-term public investment plan decided by the provincial-level People’s Council under Point a, Clause 5, Article 7 of the Law on the State Budget;

b/ Annual deficit of the provincial-level budget must not exceed the annual budget deficit decided by the National Assembly for each provincial-level locality under Point c, Clause 5, Article 7 of the Law on the State Budget;

c/ Within 90 days after the end of a budget year preceding the year of budget estimation, no overdue debt arises for borrowings to be repaid in such budget year. The Ministry of Finance shall submit special cases to the Government for decision;

d/ Borrowings to offset deficit of local budgets shall be mobilized mainly from medium- and long-term loans. Annually, based on the capital market reality, the Ministry of Finance shall submit to the Government the minimum percentage of medium- and long-term loans used to offset deficit of local budgets;

dd/ The limit of local budget borrowings, including borrowings to offset the budget deficit according to budget estimates, must not exceed the limits of borrowings specified in Clause 6 of this Article.

6. Limits of local budget borrowings:

a/ For Hanoi or Ho Chi Minh City, this limit must not exceed 60% of the revenues enjoyed by the local budget as assigned;

b/ For a locality with its assigned budget revenues higher than its current expenditures, this limit must not exceed 30% of its assigned budget revenues;

c/ For a locality with its assigned budget revenues lower than or equal to its current expenditures, this limit must not exceed 20% of its assigned budget revenues;

d/ The determination of whether the assigned local budget revenues are higher than, equal to or lower than current expenditures as prescribed at Point b or c of this Clause shall be based on local budget revenue and expenditure estimates decided by the National Assembly for the year of budget estimation. The assigned local budget revenues shall be determined under Clauses 1 and 2, Article 15 of this Decree, exclusive of the local budget remainder.

7. The Ministry of Finance shall detail and guide the borrowing and repayment of loans by local administrations.

Article 5.Payment of loan principals

1. Sources for payment of loan principals include:

a/ Borrowings to pay loan principals as decided annually by the National Assembly or provincial-level People’s Councils;

b/ Central budget surplus and provincial-level budget surplus;

Central budget surplus is the positive difference between the total revenue estimates and total expenditure estimates of the central budget in a budget year. Provincial-level budget surplus is the positive difference between the total revenue estimates and total expenditure estimates of the provincial-level budget of a locality in a budget year;

c/ Central budget and provincial-level budget remainders as prescribed in Clause 1, Article 72 of the Law on the State Budget;

d/ Increases in revenues and decreases in expenditures compared to budget estimates in the implementation of the state budget under Clause 2, Article 59 of the Law on the State Budget.

2. Mature loan principals shall be paid fully and on time according to commitments and signed contracts.

3. Amounts for payment of loan principals shall be managed and accounted via the State Treasury.

Article 6.The state budget system and relationships between budgets at all levels

1. The state budget comprises the central budget and local budgets.

2. Local budgets comprise budgets of local administrations at all levels, including:

a/ Budgets of provinces or centrally run cities (below referred to as provincial budgets), which comprise provincial-level budgets and budgets of rural districts, urban districts, towns, provincial cities and municipal cities;

b/ Budgets of rural districts, urban districts, towns, provincial cities or municipal cities (below referred to as district budgets), which comprise district-level budgets and budgets of communes, wards and townships;

c/ Budgets of communes, wards and townships (below referred to as commune-level budgets).

3. Principles of assignment for management of revenue sources, spending tasks and relationships between budgets at all levels must comply with Article 9 of the Law on the State Budget.

Article 7.State budget contingency

1. Central budget expenditure estimates and expenditure estimates of budgets of local administrations at all levels may set aside a contingency equal to between 2% and 4% of total expenditures of the budget at each level.

2. State budget contingency shall be used for the activities specified in Clause 2, Article 10 of the Law on the State Budget.

3. Competence to decide on the use of central budget contingency:

a/ For an expenditure of over 3 billion Vietnam dong for each task, the Ministry of Planning and Investment shall assume the prime responsibility for, and coordinate with the Ministry of Finance and related agencies in, submitting to the Prime Minister for decision development investment expenditures and expenditures under the Ministry of Planning and Investment’s management. The Ministry of Finance shall assume the prime responsibility for, and coordinate with related agencies in, submitting other expenditures to the Prime Minister for decision.

The Minister of Finance shall decide on an expenditure not exceeding 3 billion Vietnam dong for each task and summarize and report thereon on a quarterly basis to the Prime Minister;

b/ Based on decisions of competent authorities permitting payment of expenditures from the central budget contingency, the Minister of Finance shall decide to make such payment, except the expenditures mentioned at Point a of this Clause, and summarize and report on implementation results to the Prime Minister;

c/ Every quarter, the Ministry of Finance shall report to the Government for further reporting to the National Assembly Standing Committee on the use of the central budget contingency mentioned at Points a and b of this Clause, and report thereon to the National Assembly at its nearest session.

4. During the state budget implementation, when arise activities covered by the central budget contingency as prescribed in Clause 2 of this Article, ministries, central agencies or localities shall formulate budget estimates and send detailed explanations to the Ministry of Finance and Ministry of Planning and Investment for consideration and decision according to their competence or summarize and submit to the Prime Minister for consideration and decision on addition of funds for these ministries, central agencies or localities to perform their tasks.

5. The competence to decide on the use of the contingency of local budgets at all levels must comply with Point b, Clause 3, Article 10 of the Law on the State Budget.

Article 8.Financial reserve funds

1. Financial reserve funds are state funds formed at central and local levels.

2. A financial reserve fund shall be formed from the following sources:

a/ It is included in the annual budget expenditure estimates;

b/ Budget remainder as prescribed in Clause 1, Article 72 of the Law on the State Budget;

c/ Increase in budget revenues as prescribed in Clause 2, Article 59 of the Law on the State Budget;

d/ Interest on the fund’s saving deposits;

dd/ Other financial sources as prescribed by law.

3. The balance of the financial reserve fund at a level must not exceed 25% of the annual expenditure estimate of the budget at such level, exclusive of expenditures from targeted transfers from a higher-level budget.

4. A financial reserve fund shall be used in the following cases:

a/ To make advance payments to the budget to meet spending needs according to budget expenditure estimates when there are insufficient revenues and immediate reimbursement of budget estimates is required in the budget year;

b/ To meet spending needs, which must not exceed 70% of the fund balance at the year-beginning, in case state budget revenues or borrowings to offset the state budget deficit are lower than the budget estimates decided by the National Assembly or provincial-level People’s Council and when it is necessary to perform the tasks related to the prevention, control and remediation of consequences of serious natural disasters, catastrophes or epidemics on a large scale, national defense and security tasks or other urgent tasks for which expenditures are not yet included in budget estimates, and revenues remain insufficient even after budget funds have been rearranged and budget contingency has been used up.

5. Competence to decide on the use of financial reserve funds:

a/ For the central financial reserve fund, the Minister of Finance shall decide on advance payments from this fund to meet the spending needs prescribed at Point a, Clause 4 of this Article; the Prime Minister shall decide on the use of this fund to meet the spending needs prescribed at Point b, Clause 4 of this Article;

b/ For a provincial-level financial reserve fund, the provincial-level People’s Committee shall decide on the use of this fund in the cases specified in Clause 4 of this Article.

6. The Minister of Finance shall act as the account holder of the central financial reserve fund. The provincial-level People’s Committee chairperson or director of the provincial-level Finance Department as authorized by the former shall act as the account holder of a provincial-level financial reserve fund.

7. The use of a financial reserve fund in the case specified at Point b, Clause 4 of this Article takes the mode of transfer from this fund to state budget revenues for performance of the decided spending tasks.

8. Financial reserve funds shall be deposited at the State Treasury and generate interests at the rates prescribed by the law on management of the state budget fund.

9. Provincial-level budgets may get advance payments from the central financial reserve fund; district- and commune-level budgets may get advance payments from provincial-level financial reserve funds and shall refund such advance payments right in the budget year.

Article 9.Operating funds of the Communist Party of Vietnam and socio-political organizations

1. Funds for operation of the Communist Party of Vietnam and socio-political organizations, including the Vietnam Fatherland Front, Vietnam General Confederation of Labor, Ho Chi Minh Communist Youth Union, Vietnam War Veterans’ Association, Vietnam Women’s Union, and Vietnam Peasants’ Association, shall be covered by the state budget for the difference between the expenditure estimates determined according to regimes, criteria and norms set by competent authorities and the revenue sources under charters of these organizations.

2. The formulation and implementation of budget estimates and account finalization of budgets by the organizations specified in Clause 1 of this Article must comply with the Law on the State Budget, this Decree and relevant laws.

3. The Ministry of Finance shall prescribe in detail the management and use of state budget funds by agencies of the Communist Party of Vietnam.

Article 10.Operating funds of socio-politico-professional organizations, social organizations and socio-professional organizations

1. Funds for operation of socio-politico-professional organizations, social organizations and socio-professional organizations shall be arranged by these organizations themselves. These organizations may be entitled to state budget funds as support for tasks assigned to them by competent state agencies.

2. Funds as support for socio-politico-professional organizations, social organizations and socio-professional organizations shall be included in estimates of the budget of each level submitted to the National Assembly or related People’s Council for decision.

3. The formulation and implementation of budget estimates and account finalization of state budget funds provided as support must comply with the Law on the State Budget, this Decree and relevant laws.

4. The Government shall prescribe in detail the provision of state budget funds as support for the organizations specified in Clause 1 of this Article.

Article 11.State budget management based on task performance results

1. The state budget management based on task performance results means the formulation, allocation, implementation and account finalization of state budget funds on the basis of clearly identifying budget funds associated with tasks, services and products to be completed according to prescribed requirements on their volume, quantity, quality and technical standards.

2. Subjects performing the state budget management based on task performance results are state budget-using units that fully satisfy the following conditions:

a/ Being able to identify the volume, quantity, quality and time of completion of relevant tasks, services and products;

b/ Having bases and grounds for the formulation and assignment of fund estimates according to technical-economic norms and criteria, spending norms or value of equivalent or similar tasks, services and products provided under similar conditions (including payable taxes, duties, charges and fees in accordance with law);

c/ Having set criteria and mechanisms for supervision and evaluation of implementation;

d/ Reaching a written agreement on such management with task-assigning agencies.

3. The state budget management based on task performance results applies to tasks, services and products, of which the volume, quantity, quality and technical standard requirements can be identified and for which budget funds are needed on the basis of technical-economic norms and budget expenditure criteria and norms decided by competent agencies.

4. Principles of application:

a/ Increasing competence, responsibility and accountability of heads of related units before law;

b/ Simplifying the state budget management process at the stages of control and account finalization of state budget expenditures;

c/ The volume, quantity, quality, technical standards, time of supply, and expenditure estimates for tasks, services and products must be at least equal to those subject to the application of the input-based state budget management method;

d/ The Ministry of Finance shall detail and guide the state budget management based on task performance results.

Article 12.State extrabudgetary financial funds

1. State extrabudgetary financial funds are funds formed under Clause 19, Article 4 of the Law on the State Budget.

2. The state budget shall not cover expenses for operation of state extrabudgetary financial funds.

3. Based on the state budget capacity, competent agencies may consider providing support from the state budget for the charter capital of state extrabudgetary financial funds when these funds fully satisfy the following conditions:

a/ Being formed and operating in accordance with law;

b/ Being financially independent;

c/ Having revenue sources and spending tasks not identical to those of the state budget.

4. State extrabudgetary financial funds and their managing agencies must comply with the Law on the State Budget and this Decree regarding the formulation and implementation of state budget estimates and account finalization and audit of state budget funds with regard to state budget funds provided as support.

5. Annually, the agency managing the central extrabudgetary financial fund shall report to the Ministry of Finance on implementation of the current year’s financial plan, financial plan for subsequent year, and account finalization of the fund’s revenues and expenditures for summarization and reporting to the Government for further reporting to the National Assembly together with the report on state budget estimation and account finalization. Agencies managing local extrabudgetary financial funds shall report to provincial-level Finance Departments on implementation of the current year’s financial plans, financial plans for the subsequent year, and account finalization of the funds’ revenues and expenditures for summarization and reporting to provincial-level People’s Committees for further reporting to provincial-level People’s Councils together with reports on local budget estimation and account finalization.

6. The agency managing the central extrabudgetary financial fund shall assume the prime responsibility for, and coordinate with the Ministry of Finance in, reporting to the Government for further reporting to the National Assembly upon request; agencies managing local extrabudgetary financial funds shall assume the prime responsibility for, and coordinate with provincial-level Finance Departments in, reporting to provincial-level People’s Committees for further reporting to provincial-level People’s Councils upon request.

Chapter II

BUDGET MANAGEMENT ASSIGNMENT AND RELATIONSHIPS BETWEEN BUDGETS AT ALL LEVELS

Article 13.Revenue sources of the central budget

1. Revenues wholly belonging to the central budget:

a/ Value-added tax on imports;

b/ Import duty and export duty;

c/ Excise tax on imports, including excise tax on imports sold in the country by importers;

d/ Environmental protection tax on imports;

dd/ Royalties, enterprise income tax, value-added tax, profits shared to the host country, various charges, water surface rental, and other taxes, charges and revenues from oil and gas exploration and exploitation activities;

e/ Non-refundable aid provided by foreign governments, international organizations, other organizations and overseas individuals to the Vietnamese Government;

g/ Charges for services provided by central state agencies; these charges may be deducted for agencies that have to pay their operating expenses at a pre-fixed level; charges for services provided by central public non-business units and central state enterprises, after subtracting the amounts retained to cover relevant expenses as prescribed by law;

h/ Fees collected by central state agencies, excluding license fee prescribed at Point g and registration fee prescribed at Point h, Clause 1, Article 15 of this Decree;

i/ Collected fines for administrative violations, other fines and money amounts from seizures as prescribed by law under decisions of central state agencies;

k/ Proceeds from the sale of state property, including those from transfer of the right to use land and land-attached assets or change of land use purposes with regard to land managed by state agencies, political organizations, socio-political organizations, public non-business units, state-owned single-member limited liability companies or enterprises with capital contributions of central agencies before such companies or enterprises are equitized or reorganized, or other central units or organizations;

l/ Revenues from property over which the state ownership is established and which is managed by central agencies, units or organizations, after subtracting relevant expenses prescribed by law;

m/ Retrieved central budget capital amounts (both principals and interests) invested in economic organizations; dividends and profits from state-invested joint-stock companies and limited liability companies with two or more members in which ministries, ministerial-level agencies, government-attached agencies or other central agencies act as the owner’s representatives; after-tax profits left after setting aside various funds of state enterprises in which ministries, ministerial-level agencies, government-attached agencies or other central agencies act as the owner’s representatives;

n/ Revenues from the grant of the mining right or right to exploit water resource as prescribed by law;

o/ Levies to use sea areas falling within the competence of central agencies;

p/ Positive difference between revenues and expenditures of the State Bank of Vietnam;

q/ Revenues from the central financial reserve fund;

r/ Central budget remainder;

s/ Central budget revenues brought forward from preceding years;

t/ Other revenues as prescribed by law.

2. Revenues shared by percentage (%) between the central budget and local budgets:

a/ Value-added tax, including value-added tax payable by subcontractors for services for oil and gas exploration and exploitation activities, except value-added tax prescribed at Points a and dd, Clause 1 of this Article;

b/ Enterprise income tax, including enterprise income tax payable by subcontractors for services for oil and gas exploration and exploitation activities, except enterprise income tax prescribed at Point dd, Clause 1 of this Article;

c/ Personal income tax;

d/ Excise tax, except excise tax prescribed at Point c, Clause 1 of this Article;

dd/ Environment protection tax, except environment protection tax prescribed at Point d, Clause 1 of this Article. For environment protection tax amounts collected from domestically produced petrol and oil, their determination shall be based on the volume of petrol and oil sold in the market by wholesale traders and the ratio of the total output of domestically produced petrol and oil to the total volume of imported petrol and oil. The Ministry of Finance shall guide in detail this content.

Article 14.Spending tasks of the central budget

1. Development investment expenditures:

a/ Capital construction investment in programs and projects of ministries, ministerial-level agencies, government-attached agencies and other central state agencies in the fields prescribed in Clause 3 of this Article;

b/ Investment in, and provision of capital support for, enterprises providing public products and services under orders placed by the State, economic organizations, and central financial institutions; and investment of state capital in enterprises in accordance with law;

c/ Other development investment expenditures as prescribed by law.

2. National reserve expenditures.

3. Current expenditures of ministries, ministerial-level agencies, government-attached agencies and other central state agencies as assigned in the following fields:

a/ National defense;

b/ Security and social order and safety;

c/ Education-training and vocational training;

d/ Science and technology;

dd/ Health care, population and family;

e/ Culture and information;

g/ Radio and television broadcasting and news;

h/ Physical training and sports;

i/ Environmental protection;

k/ Economic activities in the fields of agriculture, forestry, irrigation and fisheries; transport; natural resources; border demarcation and planting of border markers; planning; trade and tourism; receipt, delivery, preservation and protection of, and insurance for, national reserves goods by the State; and other economic activities;

l/ Activities of state agencies and agencies of the Communist Party of Vietnam; Central Committee of the Vietnam Fatherland Front, Vietnam General Confederation of Labor, Central Committee of the Ho Chi Minh Youth Union, Central Committee of the Vietnam War Veterans’ Association, Central Committee of the Vietnam Women’s Union, and Central Committee of the Vietnam Peasants’ Association;

m/ Activities of central socio-politico-organizations, social organizations and socio-professional organizations as prescribed by law;

n/ Social security, including implementation of social policies in accordance with law;

o/ Other activities eligible for current expenditures as prescribed by law.

4. Expenditures for payment of interests on, and other charges and expenses arising from, government loans.

5. Expenditures for aid provision.

6. Expenditures for loan provision in accordance with law.

7. Transfers to the central financial reserve fund.

8. Central budget expenditures brought forward to the subsequent year.

9. Budget-balancing transfers and targeted transfers to local budgets.

Article 15.Revenue sources of local budgets

1. Revenues wholly belonging to local budgets:

a/ Royalties, except royalties collected from oil and gas exploration and exploitation activities;

b/ Agricultural land use tax;

c/ Non-agricultural land use tax;

d/ Land use levy;

dd/ Land and water surface rentals, excluding those from oil and gas exploration and exploitation activities;

e/ Rentals, and revenues from the sale, of state-owned houses;

g/ License fee;

h/ Registration fee;

i/ Revenues from construction lottery activities, including computerized lottery activities;

k/ Retrieved local budget capital amounts (both principals and interests) invested in economic organizations; dividends and profits from state-invested joint-stock companies and limited liability companies with two or more members in which provincial-level People’s Committees act as the owner’s representatives; and after-tax profits left after setting aside various funds of state enterprises in which provincial-level People’s Committees act as the owner’s representatives;

l/ Proceeds from the sale of state property, including those from transfer of the right to use land and land-attached assets or change of use purposes with regard to land managed by state agencies, political organizations, socio-political organizations, public non-business units, state-owned single-member limited liability companies, units or enterprises funded with local budgets before they are equitized or reorganized, or other local units or organizations;

m/ Non-refundable aid provided by international organizations, other organizations and overseas individuals directly to localities;

n/ Charges for services provided by local state agencies; such charges may be deducted for agencies that have to pay their operating expenses at a pre-fixed level; and charges for services provided by local public non-business units or state enterprises, after subtracting amounts retained to cover relevant expenses as prescribed by law;

o/ Fees collected by local state agencies;

p/ Collected fines for administrative violations, other fines and money amounts from seizures under decisions of local state agencies;

q/ Revenues from property over which the state ownership is established and which is realized by local agencies, units or organizations, after subtracting relevant expenses as prescribed by law;

r/ Revenues from the grant of the mining right or right to exploit water resource as prescribed by law;

s/ Levies to use seas areas within the competence of local administrations;

t/ Revenues from public land areas and yields and profits from public property;

u/ Capital contributions made by organizations and individuals as prescribed by law;

v/ Revenues from local financial reserve funds;

x/ Local budget remainders;

y/ Other revenues as prescribed by law.

2. Revenues shared by percentage (%) between the central budget and local budgets under Clause 2, Article 13 of this Decree.

3. Budget-balancing transfers and targeted transfers from the central budget.

4. Local budget revenues brought forward from the preceding year.

Article 16.Spending tasks of local budgets

1. Development investment expenditures:

a/ Capital construction investment in locally managed programs and projects in the fields specified in Clause 2 of this Article;

b/ Investment in, and provision of capital support for, enterprises providing public products and services under orders placed by the State, and local economic organizations and financial institutions in accordance with law; and investment of state capital in locally managed enterprises in accordance with law;

c/ Other development investment expenditures as prescribed by law.

2. Current expenditures of local agencies and units as assigned in the following fields:

a/ Education-training and vocational training;

b/ Science and technology;

c/ National defense, security and social order and safety as assigned to localities for management;

d/ Health care, population and family;

dd/ Culture and information;

e/ Radio and television broadcasting;

g/ Physical training and sports;

h/ Environmental protection;

i/ Economic activities in the fields of agriculture, forestry, irrigation and fisheries; transport; natural resources; planning; trade and tourism; and urban construction and administration; and other economic activities;

k/ Activities of state management agencies and agencies of the Communist Party of Vietnam; Vietnam Fatherland Front Committees, Ho Chi Minh Youth Unions, Vietnam War Veterans’ Associations, Vietnam Women’s Unions, and Vietnam Peasants’ Associations in localities;

l/ Activities of socio-politico-organizations, social organizations, and socio-professional organizations in localities as prescribed by law;

m/ Social security activities, including implementation of social policies in accordance with law;

n/ Other activities eligible for current expenditures as prescribed by law.

3. Expenditures for payment of interests on, and charges and expenses arising from, loans borrowed by provincial-level administrations.

4. Transfers to local financial reserve funds;

5. Local budget expenditures brought forward to the subsequent year.

6. Budget-balancing transfers and targeted transfers to lower-level budgets.

Article 17.Principles of assignment of revenue sources and spending tasks between local budgets at all levels

1. Based on revenue sources and spending tasks of local budgets prescribed in Articles 15 and 16 of this Decree, provincial-level People’s Councils shall decide to assign such revenue sources and spending tasks between local budgets at all levels according to the following principles:

a/ Ensuring conformity with the assignment of socio-economic, national defense and security tasks in each field and with economic, geographical and demographic characteristics and managerial level of each region or locality;

b/ Commune-level budgets shall be entitled to sharing of revenues from non-agricultural land use tax; license fee collected from business individuals and households; agricultural land use tax collected from households; and land and house registration fees;

c/ District- and commune-level budgets do not cover scientific and technological research spending tasks but may cover technology application and transfer tasks;

d/ The spending tasks assigned to towns, provincial cities and municipal cities must include those for construction of public general education schools at all levels, public lighting, water supply and drainage, urban traffic, urban sanitation and other public welfare works.

2. Based on the revenue sources wholly belonging to local budgets and revenues shared by percentage (%) as decided by the National Assembly or assigned by the Prime Minister, provincial-level People’s Councils shall decide on percentage (%) of revenue sharing between local budgets at all levels. For revenues shared between the central budget and local budgets, when sharing them to budgets of local administrations at all levels, percentage (%) of revenue sharing must not exceed percentage decided by the National Assembly or assigned by the Prime Minister to each province or centrally run city.

3. The Ministry of Finance shall prescribe in detail the budget management and other financial activities of communes, wards and townships.

Article 18.Principles of determination of percentage (%) of revenue sharing between budgets at all levels and budget-balancing transfers from high-level budgets to lower-level budgets

1. Percentage (%) of revenue sharing between the central budget and local budgets shall be determined to ensure that local budget revenues meet spending needs according to assigned tasks. After provinces and centrally run cities receive the whole revenues shared between the central budget and local budgets, if expenditures for their spending tasks still exceed such revenues, the central budget shall provide local budgets with budget-balancing transfers in proportion to the negative difference between revenues and expenditures.

2. Percentage (%) of revenue sharing between budgets at all levels shall be determined to ensure that local budget revenues meet spending needs according to assigned tasks. Based on practical conditions of their localities, provincial-level People’s Councils may assign the shared revenues and provide budget-balancing transfers to rural directs, urban districts, towns, provincial cities and municipal cities.

3. Percentage (%) for sharing of revenues and budget-balancing transfers shall be determined on the basis of taking into account revenue sources and spending tasks of the budget at each level according to the criteria of population, natural conditions and socio-economic conditions of each region, paying attention to deep-lying areas, remote areas, former revolutionary bases, ethnic minority areas, areas with difficulties and exceptional difficulties, areas with large wet-rice cultivation acreage, protection forest and special-use forest areas, and key economic regions.

4. Percentage (%) of revenue sharing shall apply to all revenues to be shared between the central budget and local budgets. Provincial-level People’s Councils shall decide on specific percentages of revenue sharing between budgets of local administrations at all levels.

Article 19.Transfers from higher-level budgets to lower-level budgets

1. The Government shall submit to the National Assembly for decision transfers from the central budget to the budget of each province or centrally run city. The People’s Committee at a certain level shall submit to the same-level People’s Council for decision transfers from such-level budget to its subordinate budget.

2. Budget-balancing transfers aim to ensure that a subordinate administration can balance its budget sources for performance of assigned socio-economic, national defense and security tasks. For the years of a budget stabilization period, based on the balancing capacity of a higher-level budget, a competent agency shall decide to increase budget-balancing transfers from such higher-level budget to a lower-level budget as compared to the first year of this period.

3. Targeted transfers aim to support lower-level budgets for:

a/ Implementing a new policy and regime issued by a superior authority for which funds have not been included or fully included in the budget estimates for the first year of the budget stabilization period; specific support levels shall be determined on the basis of spending needs under such regime and policy and balancing capacity of budgets at relevant levels;

b/ Implementing national target programs and other programs and projects of superior authorities assigned to subordinate authorities; specific support levels shall be determined based on expenditure estimates assigned by competent authorities;

c/ Remedying consequences of widespread disasters, catastrophes and epidemics which go beyond the balancing capacity of lower-level budgets even after budget provisions and financial reserve funds have been used under regulations;

d/ Implementing a number of major and particularly important programs and projects with great impacts on local socio-economic development. The specific support level shall be determined for each program or project. The total annual support for development investment from the central budget to a local budget prescribed at this Point must not exceed 30% of the central budget’s total expenditures for capital construction investment.

Article 20.Competence of the Ministry of Finance to issue budget expenditure regimes, criteria and norms for nationwide application

1. To issue budget expenditure levels with regard to regimes and criteria already decided by the Government or Prime Minister for which specific expenditure levels are not yet available.

2. To issue budget expenditure regimes, criteria and norms for sectors and fields after reaching agreement with line ministries; if no agreement can be reached, to submit to the Prime Minister for consideration and opinion before decision under Clause 3, Article 26 of the Law on the State Budget.

3. To issue budget expenditure regimes, criteria and norms as assigned by the Government or Prime Minister.

Article 21.Competence of provincial-level People’s Councils to decide on budget allocation levels and budget expenditure regimes, criteria and norms

1. Based on local budget allocation principles, criteria and norms issued by the National Assembly Standing Committee, capacity of local budgets and local conditions, to decide on local budget allocation principles, criteria and norms to serve as a basis for the formulation of local budget estimates.

2. To decide on a number of specific budget expenditure regimes, criteria and norms under the Government’s framework regulations.

3. To decide on budget expenditures for a number of special spending tasks in localities, in addition to the spending regimes, criteria and norms issued by the Government, Prime Minister or Minister of Finance, for performance of socio-economic development tasks and maintenance of social order and safety in their localities, within the balancing capacity of local budgets; no support from the central budget shall be provided. Particularly, before deciding on expenditures to be paid as salaries, wages or allowances, to obtain opinions of the Ministry of Finance, Ministry of Home Affairs, Ministry of Labor, War Invalids and Social Affairs, and related line ministries.

Within 10 working days after the provincial-level People’s Council of a locality issues special budget expenditure regimes for its locality, the provincial-level People’s Committee shall send such regimes to the Ministry of Finance and related ministries and sectors for summarization and implementation supervision.

Chapter III

FORMULATION OF STATE BUDGET ESTIMATES

Article 22.Time frames for guiding the formulation, summarization, decision and assignment of state budget estimates

1. Before May 15 every year, the Prime Minister shall promulgate regulations on the formulation of the socio-economic development plan and state budget estimates for the subsequent year.

2. Before June 1 every year, the Ministry of Planning and Investment shall:

a/ Promulgate a circular guiding the formulation of the socio-economic development plan and state budget estimates for the subsequent year;

b/ Notify figures for examination ofstate budget-covered development investment expenditure estimates for the subsequent year to ministries, ministerial-level agencies, government-attached agencies, other central agencies, provinces and centrally run cities;

c/ Notify figures for examination of state budget-covered development investment expenditure estimates for the subsequent year for national target programs or target programs to ministries and agencies managing such programs.

3. Before June 1 every year, the Ministry of Finance shall:

a/ Promulgate a circular guiding the formulation of state budget estimates for the subsequent year;

b/ Notify figures for examination of budget estimates compared to the total and each of budget revenues or expenditures for national reserves and in each field eligible for budget-covered current expenditure for the subsequent year to each ministry, ministerial-level agency, government-attached agency or another central agency;

c/ Notify figures for examination of the budget-covered current expenditure estimate in each field for the subsequent year for each national target program or target program to each ministry or agency managing such a program;

d/ Notify figures for examination of estimates of the total state budget revenue in a locality and total local budget expenditure and a number of important fields eligible for budget expenditures to each province or centrally run city.

4. Before June 15 every year:

a/ Ministries, ministerial-level agencies, government-attached agencies and other central agencies shall guide the formulation of budget estimates for the subsequent year as assigned; and notify figures for examination of budget revenue and expenditure estimates for the subsequent year to their attached agencies and units;

b/ Provincial-level People’s Committees shall guide the formulation of budget estimates for the subsequent year in their localities to meet the requirements, contents and time frames for such formulation; and notify figures for examination of budget revenue and expenditure estimates for the subsequent year to their attached agencies and units and district-level People’s Committees; district-level People’s Committees shall notify figures for examination of budget revenue and expenditure estimates for the subsequent year to their attached agencies and units and commune-level People’s Committees.

5. Before July 20 every year:

a/ Ministries, ministerial-level agencies, government-attached agencies and other central agencies shall formulate budget revenue and expenditure estimates and budget allocation plans for the subsequent year in each field for each budget-using agency or unit and send them to the Ministry of Finance, Ministry of Planning and Investment, and agencies managing national target programs or target programs (for expenditures for national target programs or target programs);

b/ Provincial-level People’s Committees shall formulate and summarize local budget estimates for the subsequent year and send them to the Ministry of Finance, Ministry of Planning and Investment, and agencies managing national target programs or target programs (for expenditures for national target programs or target programs).

6. Before August 15 every year, ministries and agencies managing national target programs or target programs shall formulate budget expenditure estimates and budget allocation plans for the subsequent year for national target programs or target programs and send them to the Ministry of Finance and Ministry of Planning and Investment.

7. Before August 31 every year, the Ministry of Planning and Investment shall send plans on allocation of the central budget’s development investment expenditures for the subsequent year to the Ministry of Finance for summarization.

8. The Ministry of Finance shall summarize and formulate state budget revenue and expenditure estimates and plans on allocation of central budget funds for the subsequent year, then report them to the Government for submission to the National Assembly Standing Committee for opinion before September 20 under Clause 2, Article 44 of the Law on the State Budget.

9. Based on verification opinions of the National Assembly’s agencies, the Ministry of Finance shall complete reports assessing the implementation of the state budget in the current year and formulate state budget estimates and report on allocation of central budget funds for the subsequent year, and submit them to the Government for sending to National Assembly deputies at least 20 days before the National Assembly’s year-end session opens.

10. After the National Assembly decides on state budget estimates and allocation of central budget funds, the Prime Minister shall assign budget revenue and expenditure estimates for the subsequent year to each ministry, ministerial-level agency, government-attached agency or another central agency, and each province or centrally run city before November 20 of the current year.

11. Provincial-level People’s Councils shall decide on local budget estimates and allocation of provincial-level budget funds for the subsequent year before December 10. Lower-level People’s Councils shall decide on local budget estimates and allocation of same-level budget funds for the subsequent year within 10 days after their immediate superior People’s Councils decide on budget estimates and allocation of budget funds.

12. Within 5 working days after the People’s Council at a level decides on budget estimates, the same-level People’s Committee shall assign budget revenue and expenditure estimates for the subsequent year to each agency or unit at such level or subordinate level and, at the same time, report them to the immediate superior People’s Committee and finance agency; the provincial-level People’s Committee shall report to the Ministry of Finance on budget estimates decided by the provincial-level People’s Council.

13. Before December 31, ministries, ministerial-level agencies, government-attached agencies, other central agencies and local People’s Committees at all levels shall complete the assignment of budget estimates to their attached agencies and units and subordinate People’s Committees, except the case specified in Article 27 of this Decree.

Article 23.Formulation of budget estimates at budget-estimating units and state budget-supported organizations

1. Budget-using units and project owners shall formulate budget revenue and expenditure estimates as assigned and send them to their immediate superior managing agencies.

2. Budget-using units that are allowed by competent authorities to manage their budgets based on their task performance results shall formulate a separate budget estimate for each specific task, service or product. The budget estimate for each task, service or product shall be formulated based on requirements on performance results, technical standards and time of completion of such task, service or product; current technical-economic norms and spending regimes and norms or value of equivalent or similar tasks, services or products.

3. Immediate superior managing agencies (other than level-I budget-estimating units) shall consider and summarize budget estimates of their subordinate units and send them to level-I budget-estimating units.

4. State budget-supported organizations shall formulate budget revenue and expenditure estimates as assigned and send them to same-level finance agencies and planning and investment agencies.

5. Level-I budget-estimating units shall consider budget estimates formulated by their subordinate units; summarize such estimates and formulate budget revenue and expenditure estimates as assigned, and send them to same-level finance agencies and planning and investment agencies.

6. Budget revenue and expenditure estimates formulated must meet the requirements on formulation of state budget estimates prescribed in Article 42 of the Law on the State Budget.

Article 24.Formulation of state budget estimates at budget revenue-collecting agencies

1. Provincial-level Tax Departments shall:

a/ Formulate state budget revenue estimates in geographical areas under their management and refundable value-added tax amounts as prescribed and send them to the General Department of Taxation and provincial-level People’s Committees, Finance Departments and Planning and Investment Departments;

b/ Guide their attached tax offices in formulating state budget revenue estimates in relevant geographical areas and send such estimates to related People’s Committees, finance agencies and planning and investment agencies, ensuring the satisfaction of the requirements, contents and time frames for the formulation of local state budget estimates.

2. Provincial-level Customs Departments shall formulate estimates of revenues from export duty, import duty, excise tax, value-added tax and environmental protection tax on imports, and other revenues from import and export activities under their management in provinces and centrally run cities, and send them to the General Department of Customs and provincial-level People’s Committees, Finance Departments and Planning and Investment Departments.

3. Agencies and units assigned by competent authorities to collect budget revenues from charges and fees shall formulate estimates of charge and fee revenues as assigned and send them to same-level tax offices and finance agencies.

Article 25.Formulation of local budget estimates

1. Provincial-level Finance Departments shall assume the prime responsibility for, and coordinate with provincial-level Planning and Investment Departments in, examining state budget revenue estimates in their localities which are formulated by budget revenue-collecting agencies, budget revenue and expenditure estimates of level-I budget-estimating units under their management, and district-level budget revenue and expenditure estimates; and formulate state budget revenue estimates in their localities and local budget revenue and expenditure estimates, then report them to provincial-level People’s Committees for submission to standing bodies of provincial-level People’s Councils for consideration and opinion.

2. After obtaining opinions of standing bodies of provincial-level People’s Councils, provincial-level People’s Committees shall send reports on local budget estimates to the Ministry of Finance, Ministry of Planning and Investment, and agencies managing national target programs or target programs with regard to expenditure estimates of such programs.

Article 26.Formulation of state budget estimates, plans on allocation of the central budget

1. The Ministry of Finance shall assume the prime responsibility for, and coordinate with the Ministry of Planning and Investment and related ministries and agencies in, summarizing data and formulating state budget revenue and expenditure estimates and plans on allocation of the central budget, then submit to the Government the documents specified in Clause 1, Article 47 of the Law on the State Budget.

2. As assigned by the Government and authorized by the Prime Minister, the Minister of Finance shall, on behalf of the Government, report and explain the formulation of state budget venue and expenditure estimates and plans on allocation of the central budget to the National Assembly and its agencies in accordance with law.

Article 27.Re-formulation of state budget estimates

1. The re-formulation of state budget estimates and plans on allocation of the central budget, and local budget estimates and plans on allocation of local budgets must comply with Article 48 of the Law on the State Budget.

2. The time frames for re-formulation of state budget estimates and plans on allocation of the central budget shall be decided by the National Assembly.

3. The time frames for re-formulation of local budget estimates shall be as follows:

a/ For state budget estimates and central budget allocation plans already decided by the National Assembly and assigned by the Prime Minister, provincial-level People’s Committees shall submit to provincial-level People’s Councils for decision local budget estimates and plans on allocation of provincial-level budgets before December 10. In case a provincial-level People’s Council requests the provincial-level People’s Committee to re-formulate the local budget estimate and plan on allocation of provincial-level budget of a year, such estimate and plan shall be submitted before December 20 of the preceding year as decided by the provincial-level People’s Council;

b/ The re-formulation of local budget estimates and plans on allocation of provincial-level budgets must comply with Clause 2 of this Article, and provincial-level People’s Committees shall submit to provincial-level People’s Councils for decision local budget estimates and plans on allocation of provincial-level budgets within 15 days after the Prime Minister assigns budget estimates to their localities;

c/ Provincial-level People’s Committees shall specify the time frames for re-formulation of estimates of district- and commune-level budgets but shall ensure that lower-level People’s Councils decide on local budget estimates and plans on allocation of budgets at their levels within 10 days after immediate higher-level People’s Councils decide on budget estimates and allocation plans.

Article 28.Responsibilities of agencies and units in formulation of budget estimates and plans on allocation of budget estimates

1. People’s Committees at all levels shall:

a/ Guide, organize and direct their attached units and lower-level administrations in formulating budget revenue and expenditure estimates under their management; coordinate with and direct local tax offices and customs offices in formulating state budget revenue estimates and estimating value-added tax amounts to be refunded under regulations;

b/ Formulate estimates of state budget revenues to be collected in their localities and local budget revenue and expenditure estimates; and report them to standing bodies of People’s Councils for consideration before reporting to superior state administrative agencies;

c/ Base themselves on budget revenue and expenditure estimates assigned by superior authorities to submit to the same-level People’s Councils for decision local budget estimates and plans on allocation of budgets at their levels, and report to immediate higher-level state administrative agencies, finance agencies and planning and investment agencies on their local budget estimates and results of the allocation of budget estimates at their levels which have been decided by the same-level People’s Councils;

d/ Base themselves on resolutions of the same-level People’s Councils to assign budget revenue and expenditure estimates to each of their attached agencies and units and budget revenue and expenditure estimates and budget transfers to subordinate authorities;

dd/ Make plans on adjustment of their local budget estimates and plans on allocation of budget revenue and expenditure estimates at their levels, then submit them to the same-level People’s Councils for decision at the request of superior state administrative agencies in case resolutions of the same-level People’s Councils are not conformable to budget revenue and expenditure estimates assigned by superior authorities;

e/ Request lower-level People’s Councils to adjust budget estimates in case of necessity.

2. Finance agencies at all levels shall:

a/ Assume the prime responsibility for, and coordinate with planning and investment agencies in, organizing discussions about annual budget estimates with agencies and units at the same level. For the first year of the budget stabilization period, they shall assume the prime responsibility for, and coordinate with planning and investment agencies, tax offices and related agencies in, organizing discussions with immediate lower-level People’s Committees in order to determine budget revenue and expenditure estimates, percentage (%) of revenue sharing between higher-level and lower-level budgets, and budget-balancing transfers from higher-level budgets to lower-level budgets. For subsequent years of the budget stabilization period, higher-level finance agencies shall organize discussions with immediate lower-level People’s Committees at the latter’s request.

In the course of discussion about budget estimates and budget allocation plans, finance agencies may request the reallocation of revenue and expenditure amounts in such estimates which are incompliant with law and unconformable with regimes and standards, and remain unreasonable, uneconomical and unsuitable to the budget capacity and socio-economic development orientations. In case opinions remain divergent among finance agencies and same-level agencies and units and lower-level People’s Committees, local finance agencies shall report such opinions to the same-level People’s Committees for decision; or the Ministry of Finance shall report them to the Prime Minister for decision;

b/ Assume the prime responsibility for, and coordinate with planning and investment agencies and related agencies at the same level in, summarizing data and formulating budget estimates and plans on allocation of budget estimates in each field of budgets at their levels. For development investment expenditures and current expenditures, they shall summarize data and formulate specific expenditure estimates for the fields of education-training and vocational training and science and technology in their localities and nationwide;

c/  Assume the prime responsibility for, and coordinate with planning and investment agencies and related agencies at the same level in, summarizing data and formulating budget estimates and plans on allocation of budget estimates at their levels;

d/ Coordinate with planning and investment agencies at the same level in formulating development investment expenditure estimates of budgets at their levels;

dd/ The Ministry of Finance shall appraise national target programs and target programs for current expenditures formulated by agencies managing such programs, and summarize estimates and plans on allocation of expenditures for such programs sent by the Planning and Investment Ministry for submission to the Government;

e/ Assume the prime responsibility for, and coordinate with related agencies in, proposing budget balancing plans and measures to implement policies to increase budget revenues and reduce budget expenditures;

g/ The Ministry of Finance shall examine resolutions on budget estimates of provincial-level People’s Councils, and recommend adjustment of such budget estimates when necessary. Local finance agencies at all levels shall examine resolutions on budget estimates of lower-level People’s Councils in order to submit recommendations to the same-level People’s Committees and request lower-level People’s Councils to adjust such budget estimates when necessary.

3. Planning and investment agencies at all levels:

a/ The Ministry of Planning and Investment shall submit to the Government national socio-economic development plans and major balances of the national economy, including financial, monetary and development investment capital balances, to serve as a basis for the formulation of budget estimates;

b/ Planning and investment agencies shall coordinate with finance agencies at the same level in summarizing data and formulating budget estimates at their levels; assume the prime responsibility for, and coordinate with finance agencies at the same level in, formulating development investment expenditure estimates and plans on allocation of capital construction investment expenditures; and send data to finance agencies at the same level for summarizing and formulating state budget estimates and plans on budget allocation;

c/ The Ministry of Planning and Investment shall appraise budget estimates and plans on allocation of expenditures for national target programs and target programs regarding capital construction investment expenditure amounts formulated by agencies managing these programs; summarize budget estimates and plans on allocation of expenditures for these programs and send them to the Ministry of Finance.

4. Central and local state agencies:

a/ Ministries, ministerial-level agencies, government-attached agencies and other central agencies shall coordinate with the Ministry of Finance in formulating regimes, standards and norms of state budget expenditures in sectors or fields under their management;

b/ Central and local state agencies shall organize the formulation of budget revenue and expenditure estimates under their management, then send them to finance agencies and planning and investment agencies at the same level; formulate estimates of budget expenditures for national target programs and target programs, then send them to finance agencies, planning and investment agencies and agencies managing these programs; and coordinate with finance agencies at the same level in formulating and allocating budget estimates in the fields covered by budgets at their levels;

c/ Agencies managing national target programs and target programs shall assume the prime responsibility for, and coordinate with finance agencies and planning and investment agencies in, formulating budget estimates and plans on allocation of budget expenditures for these programs for units and localities to send them to finance agencies and planning and investment agencies at the same level for incorporation in budget estimates and plans on allocation of budget estimates for subsequent submission to competent authorities for decision. In case opinions remain divergent among agencies managing national target programs and target programs, the Ministry of Finance and Ministry of Planning and Investment, these agencies shall report such opinions to the Prime Minister for consideration and decision.

Article 29.Decision on and assignment of state budget estimates

1. Based on the National Assembly’s resolution on budget estimates of a year, the Prime Minister shall assign budget revenue and expenditure estimates to each of ministries, ministerial-level agencies, government-attached agencies or other central agencies in each field; revenue and expenditure estimates and total borrowing to offset the budget deficit and repay principal loans of each locality, percentage (%) of revenue sharing between the central budget and local budgets and budget-balancing transfers and targeted transfers from the central budget to each locality before November 20 of the preceding year.

2. Based on the Prime Minister’s decisions on assignment of budget estimates of a year, provincial-level People’s Committees shall submit to the same-level People’s Councils for decision local budget estimates and plans on allocation of provincial-level budget estimates, transfers from provincial-level budgets to lower-level budgets and percentage (%) of revenue sharing among budgets of local administrations at all levels before December 10 of the preceding year; and report to the Ministry of Finance and Ministry of Planning and Investment on local budget estimates and results of the allocation of provincial-level budget estimates decided by provincial-level People’s Councils.

3. Based on resolutions of provincial-level People’s Councils, provincial-level People’s Committees shall decide to assign budget revenue and expenditure estimates to each agency or unit in their localities; budget revenue and expenditure estimates, percentage (%) of revenue sharing among budgets of local administrations at all levels; transfers from provincial-level budgets to each rural district, urban district, town, provincial city or municipal city.

4. After receiving a decision on assignment of budget estimates of a year from the higher-level People’s Committee, a People’s Committee shall submit to the same-level People’s Council for decision local budget estimates and plan on allocation of the budget at its level, ensuring that commune-level budget estimates shall be decided before December 31 of the preceding year. After budget estimates are decided by the People’s Council, the same-level People’s Committee shall report them to the immediate higher-level People’s Committee and finance agency.

Article 30.Forms used for formulation of state budget estimates

The Ministry of Finance shall set a specific system of forms to be used for the formulation and summarization of state budget estimates, plans on allocation of the central budget, local budget estimates and plans on allocation of local budgets.

Chapter IV

IMPLEMENTATION OF THE STATE BUDGET

Article 31.Allocation and assignment of state budget estimates by budget-estimating units

1. After being assigned budget estimates by the Prime Minister or People’s Committees, level-I budget-estimating units at the central and local levels shall allocate and assign state budget estimates to their attached budget-using units and subordinates according to the procedures and requirements and within the time limit prescribed in Articles 49 and 50 of the Law on the State Budget.

2. Budget estimates assigned to budget-using units shall be detailed by field or spending task. In case there are spending tasks subject to performance-based budget management, such estimates shall be detailed by task, service or product.

3. In case a state management agency of a higher-level budget authorizes a state management agency of a lower-level budget to perform the former’s spending tasks, the authorizing agency shall allocate or assign the budget estimate detailed for each authorized task to the authorized agency as for its attached budget-using units.

4. The same-level finance agencies shall examine budget estimates assigned by level-I budget-estimating units to budget-using units within 10 working days after receiving budget allocation reports from the budget-estimating units. In case they detect that the allocation fails to comply with the assigned total budget estimates or budget estimate detailed for each field or spending task or with prescribed policies or regimes, they shall request level-I budget-estimating units to make adjustment.

5. The Ministry of Finance shall set specific forms of assignment of budget estimates to agencies, organizations and units.

Article 32.Organization of collection of state budget revenues

1. Organizations that manage and collect taxes, charges, fees and other revenues shall remit collected amounts directly into the State Treasury. In case they are permitted to authorize the collection, they shall remit collected amounts fully and on time into the State Treasury under regulations of the Ministry of Finance.

2. Non-refundable aid in cash shall be promptly collected and remitted into the state budget. In case aid agreements require aid amounts to be disbursed directly for programs and projects, the disbursement shall be fully accounted into the state budget on a regular basis under regulations of the Ministry of Finance.

3. The State Treasury may open accounts at the State Bank of Vietnam and commercial banks under Article 40 of this Decree to collect revenues of the state budget; fully and promptly account revenues into the state budget and regulate revenues to budgets at all levels under regulations.

4. The Ministry of Finance shall specify the organization of collection and accounting of revenues and non-refundable aid amounts into the State Treasury.

Article 33.Management and accounting of loans of the state budget

1. Loans of the state budget shall be managed, accounted and monitored on accounts of each budget level. For foreign loans required by aid agreements to be disbursed directly for programs and projects, the disbursement shall be regularly accounted into the state budget under regulations of the Ministry of Finance.

2. The Ministry of Finance shall specify the management and accounting of loans of the state budget.

Article 34.Organization of payment of state budget expenditures

1. Finance agencies and State Treasury offices shall fully and promptly examine, control and pay for spending tasks included in budget estimates according to their performance progress. Heads of finance agencies and State Treasury offices may reject expenditures which fail to meet the conditions for payment prescribed in Clause 2, Article 12 of the Law on the State Budget, and shall take responsibility for their decisions in accordance with law and promptly notify such to concerned agencies, organizations and units. In case agencies, organizations and units having expenditures rejected disagree with decisions of finance agencies and State Treasury offices, they may report such to agencies that have assigned budget estimates and higher-level finance agencies and State Treasury offices for consideration and handling.

2. For budget-estimating agencies, organizations and units that fail to fully and promptly observe the regulations on accounting and finalization statements and other financial statements, finance agencies may request the State Treasury to suspend the payment of budget expenditures, except payment of salaries, allowances, social subsidies, scholarships and other urgent payments as prescribed by the Ministry of Finance and shall take responsibility for their decisions. When deciding to suspend the payment of budget expenditures, finance agencies shall concurrently notify their decisions to superior management agencies of agencies, organizations and units having expenditures suspended from payment.

3. The advance payment of capital and funds must comply with Clauses 2 and 3, Article 56 of the Law on the State Budget and advanced amounts shall be recovered immediately when the prescribed conditions for payment of expenditures are fully met.

4. Regular spending tasks shall be equally divided in a year for payment. Sources for payment of expenditures for capital construction, procurement, major repairs and other irregular payments shall be ensured according to the performance progress of such spending tasks and within the assigned budget estimates.

5. The payment of state budget expenditures shall be made on the principle of direct payment from the State Treasury to persons entitled to salaries, allowances and subsidies and goods and service suppliers. In case a number of expenditures fail to meet the conditions for direct payment from the State Treasury, budget-using units may receive advanced funds for making payments on their own initiative according to the assigned budget estimates, then making settlement with the State Treasury under regulations of the Ministry of Finance.

Particularly, expenditures from foreign loans of the Government and non-refundable aid under aid agreements that require disbursement via service banks for direct transfer to programs and projects shall be controlled under guidance of the Ministry of Finance and regularly accounted into the state budget under Clause 2, Article 32 and Clause 1, Article 33, of this Decree.

5. For expenditures for capital construction investment:

a/ Based on cost estimates of works and work items decided by competent authorities and assigned budget estimates, value of performed work volumes and the conditions for payment of budget expenditures, project owners shall make and send dossiers to the State Treasury offices where they conduct transactions to request payment if the payment conditions prescribed in Clause 2, Article 12 are fully met or request advance payment of capital under Clause 2, Article 56 of the Law on the State Budget;

b/ The State Treasury offices shall examine the balance of budget estimates and lawfulness of dossiers and documents sent by project owners and the satisfaction of the payment conditions prescribed in Clause 2, Article 12 or request for advance payment of capital under Clause 2, Article 56 of the Law on the State Budget in order to make payments and account them as state budget expenditures under regulations.

7. For expenditures subject to performance-based management:

a/ Based on assigned budget estimates, signed contracts or agreements, progress, volume and quality of the performance of tasks or provision of services or products, heads of budget-using units shall decide on payment of expenditures, take responsibility for their decisions, and send dossiers to request the State Treasury offices where they conduct transactions to make payment or advance payment under regulations;

b/ The State Treasury offices shall examine the balance of budget estimates and lawfulness of dossiers sent by such units to make payments and account them as budget expenditures or advance payments under regulations.

8. For current expenditures:

a/ Based on the satisfaction of the conditions for payment of budget expenditures and work performance progress, heads of budget-using units shall decide on payment of these expenditures and send dossiers to request the State Treasury offices where they conduct transactions to make payments or advance payments under regulations;

b/ The State Treasury offices shall examine the balance of budget estimates, lawfulness of dossiers sent by such units and the satisfaction of the payment conditions prescribed in Clause 2, Article 12 of the Law on the State Budget to make payments and account them as budget expenditures or advance payments under regulations.

9. For targeted transfers from higher-level budgets to lower-level budgets, the withdrawal of budget estimates shall be made at the State Treasury.

10. For the payment of funds for authorized spending tasks:

a/ The payment of funds for authorized spending tasks by authorized units must comply with Clauses 6, 7 and 8 of this Article;

b/ The State Treasury and authorized units shall account and separately report on expenditures for authorized spending tasks.

11. The payment of interests on and charges and other expenses arising from loans of the state budget must comply with Article 35 of this Decree.

12. The Ministry of Finance shall prescribe in detail and guide the process and procedures for accounting and controlling the payment of budget expenditures for regular spending tasks, capital construction investment, payment of debts, support for enterprises and other special spending tasks of the state budget, and transfers from higher-level budgets to lower-level budgets.

Article 35.Management, accounting and repayment of loans of the state budget

1. Interests on and charges and other expenses arising from loans shall be paid once they actually arise and within budget estimates.

2. Due loan principals shall be repaid on the due date as committed, under signed contracts and within budget estimates decided by competent authorities under Clause 1, Article 5 of this Decree.

3. Accounting of expenditures for debt payment:

a/ The payment of interests on and charges and expenses arising from loans shall be accounted as a state budget expenditure;

b/ The payment of loan principals shall be accounted as a decrease in the debit balance of the state budget, not as a state budget expenditure;

c/ The Ministry of Finance shall prescribe in detail the accounting of payment of loan principals, and interests on and charges and other expenses arising from loans of the state budget.

Article 36.Organization of administration of the state budget

1. Finance agencies shall ensure sources for timely payment of expenditures according to budget estimates. Temporary shortage of the state budget fund shall be handled as follows:

a/ Handling of temporary shortage of the central budget fund: The Ministry of Finance shall make advance payments from the central financial reserve fund and other lawful financial sources, including those from the issuance of the State Treasury bills, and reimburse such advance amounts within the budget year. In case sources remain insufficient after advance payments are made from the central financial reserve fund and other lawful financial sources, including those from the issuance of the State Treasury bills, the Ministry of Finance shall report such to the Prime Minister for decision on advance payments from the State Bank of Vietnam under Clause 1, Article 58 of the Law on the State Budget;

b/ Handling of temporary shortage of provincial-level budget funds: Provincial-level People’s Committees shall decide to make advance payments from provincial-level financial reserve funds and other lawful financial sources, and reimburse such advance amounts within the budget year. In case sources remain insufficient after advance payments are made from provincial-level financial reserve funds and other lawful financial sources, provincial-level People’s Committees shall report such to the Ministry of Finance for decision on advance payments from the central financial reserve fund or from the central budget, and such advance amounts shall be reimbursed within the budget year;

c/ Handling of temporary shortage of district-level budget funds: At the request of district-level People’s Committees, provincial-level People’s Committees shall decide to make advance payments from provincial-level financial reserve funds and other lawful financial sources or from provincial-level budgets, and such advance amounts shall be reimbursed within the budget year;

d/ Handling of temporary shortage of commune-level budget funds: At the request of commune-level People’s Committees, district-level People’s Committees shall decide to make advance payments from district-level budgets to commune-level budgets, and such advance amounts shall be reimbursed within the budget year. In case district-level budgets cannot afford such advance payments, district-level People’s Committees shall request provincial-level People’s Committees to decide to make advance payments from provincial-level financial reserve funds or from higher-level budgets, and such advance amounts shall be reimbursed within the budget year.

2. In the course of implementation of the state budget, in case revenues are unlikely to reach the budget estimates decided by the National Assembly or People’s Councils, the Government shall propose the National Assembly Standing Committee to decide on reduction of a number of expenditures and report such to the National Assembly at its nearest session; or People’s Committees shall propose standing bodies of the same-level People’s Councils to decide on reduction of a number of expenditures and report such to People’s Councils at the nearest session under Point a, Clause 2, or Point a, Clause 3, Article 53 of the Law on the State Budget.

3. The adjustment of budget estimates assigned to budget-using units shall be made under Article 53 of the Law on the State Budget.

4. In case expenditures for investment in programs and projects funded with ODA capital and concessional loans from donors have not yet been included in budget estimates or exceed assigned budget estimates, the Ministry of Planning and Investment shall assume the prime responsibility for submitting such expenditures to the Government for reporting to the National Assembly Standing Committee for opinion before making payment, and report such to the National Assembly at its nearest session.

5. The use of financial reserve funds to meet spending needs of the state budget must comply with Point b, Clause 2, Article 11 of the Law on the State Budget and Article 8 of this Decree.

6. At the end of a budget year, in case of increases in budget revenues and decreases in budget expenditures, the Ministry of Finance shall submit to the Government for reporting to the National Assembly Standing Committee, or the local finance agency shall submit to the People’s Committee of a level for reporting to the standing body of the same-level People’s Council for decision additional budget estimates for increases in revenues; and allocate and use increases in budget revenues and decreases in budget expenditures under Clause 2, Article 59 of the Law on the State Budget.

7. Bonus for revenues shared between the central budget and local budgets which are higher than estimated shall be given in accordance with Point a, Clause 4, Article 59 of the Law on the State Budget while adhering to the following principles:

a/ The total central budget revenues increase compared to the budget estimates decided by the National Assembly;

b/ The percentage of bonus must not exceed 30% of the increase in revenues belonging the central budget which, however, must not exceed the increase in revenues compared to the preceding year’s collected revenues. The basis for considering bonus for each locality is the total of revenues shared in such locality, not a single revenue.

8. Based on the bonus level decided by the National Assembly Standing Committee, provincial-level People’s Committees shall report to the same-level People’s Councils for decision on use of the bonus for collected revenues higher than estimated which they enjoy to invest in infrastructure programs and projects, perform important tasks and give bonuses to lower-level budgets.

Article 37.Principles, criteria, conditions and competence for deciding on advance payments from budget estimates of the subsequent year

1. Principles for making advance payments from budget estimates of the subsequent year:

a/ When allocating budget estimates of the subsequent year, an agency competent to assign budget estimates shall ensure sufficient budget estimates in order to retrieve all advanced budget amounts; in case an agency or a unit fails to allocate or fully allocate budget estimates in order to retrieve all advanced budget amounts, it may not make advance payments from budget estimates of the subsequent year;

b/ An advance payment from budget estimates of the subsequent year must not exceed 20% of the expenditure estimates for capital construction investment in the year of implementation of capital construction projects and works under the state budget-funded medium-term public investment plan approved by a competent authority;

2. Eligible for advance payments from budget estimates of the subsequent year are:

a/ National important projects;

b/ Central and local urgent capital construction projects and works.

3. Conditions for making advance payments from budget estimates of the subsequent year:

a/ The balance of budget funds at each level is ensured;

b/ Capital construction projects and works must fully meet the conditions prescribed by the public investment and construction laws and shall be included in the state budget-funded medium-term public investment plan approved by a competent authority and need to have their implementation progress accelerated;

c/ There is no balance of advance payments from budget estimates;

d/ Owners of capital construction projects and works entitled to advance payments from budget estimates of the subsequent year must have dossiers and reports to explain the necessity of advance payments.

4. Competence to decide on advance payments from budget estimates of the subsequent year:

a/ As assigned by the Government and at the request of ministries, ministerial-level agencies, government-attached agencies, other central agencies or provincial-level People’s Committees, the Ministry of Finance and Ministry of Planning and Investment shall assume the prime responsibility for submitting to the Government for decision advance payments from the central budget estimates of the subsequent year; and biannually report such to the National Assembly Standing Committee and report to the National Assembly at its nearest session.

b/ Provincial- and district-level People’s Committees shall decide on advance payments from their-level budget estimates of the subsequent year; and biannually report such to the standing bodies of their-level People’s Councils and report to the same-level People’s Councils at the nearest session.

Article 38.Management and use of budgets by budget-using units

1. Ministries, ministerial-level agencies, government-attached agencies, other central agencies and local administrations shall guide, inspect and monitor the implementation of budgets in sectors or fields under their management and by their attached units; and periodically report on budget revenues and expenditures and make other financial statements in accordance with law.

2. Heads of budget-using units shall take responsibility for management and use of budgets according to assigned budget estimates, ensuring efficiency, economy, and conformity with budget expenditure policies, regimes, standards and norms; and periodically report on evaluation of implementation of assigned budget estimates to their immediate superior management agencies.

3. Persons in charge of finance and accounting work in budget-using units shall strictly comply with finance-budget management, state accounting and internal inspection regulations, prevent and detect violations and request heads of units and finance agencies at the same level to handle such violations.

4. Heads of agencies, units and organizations and persons in charge of finance and accounting work in budget-using units mentioned in Clauses 1, 2 and 3 of this Article shall perform their assigned tasks and exercise their vested powers in the field of finance and budget and take responsibility for errors and violations of persons under their management in accordance with law.

Article 39.Opening of accounts at the State Treasury

1. Budget-using units and organizations enjoying regular state budget supports shall open accounts at the State Treasury, submit to inspection and control by finance agencies and the State Treasury in the course of payment and use of funds. In case such units and organizations are allowed to open accounts at banks to collect a number of their revenues, they shall manage and use such accounts in accordance with law.

2. The Ministry of Finance shall specify and guide the opening of accounts at the State Treasury.

Article 40.Opening of State Treasury accounts at banks

1. The State Treasury may open accounts at the State Bank of Vietnam and commercial banks to collect their revenues and make payment of state budget expenditures.

2. Banks where the State Treasury opens its accounts shall ensure sources for payment and supply Vietnam dong and foreign-currency cash in a full and timely manner according to the collection and spending tasks of the state budget.

3. Deposits of the State Treasury at banks enjoy interests paid by such banks as for units and economic organizations. Payments made by the State Treasury via banks shall bear a charge payable to such banks as prescribed by law.

Article 41.Reports on implementation of the state budget

1. Agencies, organizations and units shall make reports on implementation of the state budget under Article 60 of the Law on the State Budget.

2. Forms and time limits applicable to reports specified in Clauses 1, 2, 3, 4, 5, 6 and 7, Article 60 of the Law on the State Budget shall be set by the Ministry of Finance.

3. Forms and time limits applicable to reports specified in Clause 8, Article 60 of the Law on the State Budget must comply with the National Assembly Standing Committee’s promulgating the regulation on formulation, appraisal and submission to the National Assembly for decision state budget estimates, plans on allocation of the central budget and approval of final state budget accounts.

Chapter V

ACCOUNTING, AUDIT AND ACCOUNT FINALIZATION OF THE STATE BUDGET

Article 42.Closing of account books and handling of state budget revenues and expenditures at the year end

1. At the end of a budget year, agencies, units and organizations involved in collection of state budget revenues and payment of state budget expenditures shall close account books and make state budget account-finalization statements according to contents of their assigned budget estimates and State Budget Index. The Ministry of Finance shall prescribe the state budget index system.

2. The closing of account books must meet the following requirements:

a/ State budget revenues in previous years which are remitted from January 1 of the current year shall be accounted and finalized as budget revenues of the current year, except revenues specified in Clause 4 of this Article;

b/ Upon the expiration of the time limit for adjustment of budget account finalization, if estimated expenditures, including also those added in the year, which have neither been paid nor fully paid shall be cancelled, except transfers to the subsequent year for further payment under Article 43 of this Decree;

c/ Advance amounts in budget estimates may be paid until the expiration of the time limit for account finalization adjustment. Upon the expiration of the time limit for account finalization adjustment, if the payment procedures are not yet completed, these amounts shall be handled as follows:

In case they may be carried forward to the subsequent year under Article 43 of this Decree, they shall be carried forward to the subsequent year for payment;

In case they may not be carried forward to the subsequent year, budget-using units shall reimburse them into the state budget before February 15 of the subsequent year. After this deadline, if units fail to reimburse advance amounts, the State Treasury shall recover them by clearing corresponding spending items in these units’ budget estimates of the subsequent year. If the budget estimates of the subsequent year do not cover such spending items or cover such spending items but the budget estimates are smaller than recoverable amounts, the State Treasury shall notify such to finance agencies at the same level for handling;

d/ Temporarily collected or seized amounts shall be handled under decisions of competent authorities. At the end of December 31, if a competent authority has not yet decided on the handling of the balance of custody accounts for such amounts, such balance may be carried forward to the subsequent year for monitoring and further handling in accordance with law;

dd/ Supplies and goods in stock at budget-estimating units by the end of December 31 shall be inventoried under current regulations and handled as follows: The purchase value of supplies and goods in stock shall be account-finalized as budget expenditures of the previous year under regulations. In case these supplies and goods are further used for the subsequent year, budget-estimating units shall closely monitor and use them and make separate reports. In case they are no longer used for the subsequent year, budget-estimating units shall establish a council for liquidation and sale and remit proceeds into the state budget. Public non-business units may use such proceeds in accordance with law;

e/ The balance of deposit accounts of budget allocations opened by budget-estimating units at the State Treasury by the end of December 31 may be further settled under regulations within the time limit for account finalization adjustment. Upon the expiration of the time limit for account finalization adjustment, if such balance still exists, it shall be reimbursed into the state budget, except the cases where it may be carried forward to the subsequent year under Article 43 of this Decree. The balance of deposit accounts not belonging to state budget allocations may be carried forward to the subsequent year for use in accordance with law.

3. The time limit for state budget account-finalization adjustment of a year shall expire on January 31 of the subsequent year.

4. Within the time limit for state budget account-finalization adjustment, agencies, units, organizations and budgets at all levels shall:

a/ Further account budget revenues and expenditures arising on or before December 31, on which documents are in circulation;

b/ Account as budget expenditures advance amounts which fully meet the conditions for payment and payments for jobs and volumes performed on or before December 31 as assigned in budget estimates;

c/ Correct errors in the course of accounting.

Article 43.Budget transfers from a year to the subsequent year

1. Estimated amounts which remain unimplemented or not fully paid, amounts advanced from budget estimates, balance of deposit accounts upon the expiration of the time limit for budget account-finalization adjustment which remains unimplemented or not used up and may be carried forward to the subsequent year for further use include:

a/ Expenditures for development investment, which shall be carried forward to the subsequent year in accordance with the Law on Public Investment. In special cases, the Prime Minister shall decide to permit the carrying forward of these expenditures to the year after the subsequent year which must not be beyond the time limit for capital disbursement of projects under the medium-term public investment plan;

b/ Expenditures for procurement of equipment, for which procurement dossiers and contracts are completely concluded before December 31 of the year of implementation of budget estimates; expenditures for additional or deficit-offsetting purchase of national reserve goods;

c/ Sources for payment of salaries, allowances, subsidies, base salary-based amounts, and social security amounts;

d/ Funds assigned under the autonomy regime to public non-business units and state agencies; non-refundable aid amounts for which spending tasks are specified;

dd/ Estimated amounts added by competent authorities after September 30 of the year of implementation of budget estimates, excluding amounts added by superior budget-estimating units as adjustments to budget estimates assigned to their attached budget-estimating units;

e/ Funds for scientific research allocated for ongoing scientific research subjects and projects decided by competent authorities.

2. Increases in budget revenues and decreases in budget expenditures which may be used under Clause 2, Article 59 of the Law on the State Budget shall be decided by competent authorities to be used in the subsequent year.

Article 44.Requirements and order of making state budget account-finalization statements

1. The account finalization of the state budget must meet the requirements prescribed in Article 65 of the Law on the State Budget.

2. Budget-using units subject to performance-based state budget management may make the account finalization according to state budget expenditures actually spent for their task performance.

3. Order of making, approval and appraisal of budget account finalization of budget-estimating units:

a/ Budget-using units shall make budget account-finalization statements under regulations and send them to immediate superior budget-estimating units. In case subordinate agencies receive funds from superior agencies for authorized spending tasks, they shall report on account finalization of such funds to the authorizing superior agencies;

b/ Immediate superior budget-estimating units shall consider and approve budget account finalizations of their subordinate units and notify approval results to the latter; and summarize data and make budget account-finalization statements within the scope of their management, then send them to immediate superior budget-estimating units;

c/ Level-I budget-estimating units shall consider and approve budget account finalization of their subordinate units and notify approval results to the latter; and summarize data and make budget account-finalization statements within the scope of their management, then send them to finance agencies at the same level;

d/ Finance agencies shall appraise  final budget accounts of level-I budget-estimating units at their level and notify appraisal results to the latter. For level-I budget-estimating units that are concurrently budget-using units, finance agencies shall consider and approve their final budget accounts and notify approval results to the such units.

4. Order of making and appraisal of final budget accounts for capital construction investment programs and projects, national important projects, scientific research programs, projects and subjects, and national target programs:

a/ At the end of a budget year, owners of capital construction investment programs and projects, national important projects, and scientific research programs, projects and subjects shall make statements of account finalization of used capital and budget capital sources, capital use, value of completed volumes and jobs already finalized in the year, then send them to the agencies that have allocated capital construction investment capital, their superior agencies and finance agencies at the same level. Upon the completion of capital construction programs and projects and national important projects, they shall make statements of account finalization of the whole capital and budget capital sources, enclosed with explanatory reports on capital use, then send them to the agencies that have allocated capital construction investment capital and agencies competent to consider and approve statements of account finalization of capital construction investment programs and projects, national important projects, and scientific research programs, projects and subjects;

b/ Agencies, organizations and units assigned with expenditure estimates for national target programs shall make the account finalization of assigned budget estimates under regulations and at the same time report it to their immediate superior agencies for summarization and reporting to agencies managing national target programs;

c/ For national target programs and national important projects with investment policy decided by the National Assembly, in addition to the provisions of Points a and b of this Clause, agencies directly managing these programs and projects shall also make and submit account finalization statements to the Government for consideration and submission to the National Assembly.

5. Order of making commune-level budget account finalization:

a/ Commune-level People’s Committees shall make account finalization of state budget revenues in their localities as assigned and account finalization of commune-budget revenues and expenditures, then send them to the socio-economic affairs commissions of commune-level People’s Councils for verification, and concurrently to district-level finance agencies;

b/ Commune-level People’s Committees shall report to standing bodies of commune-level People’s Councils on budget account finalization for the latter’s opinion. After obtaining opinions of standing bodies of commune-level People’s Councils, commune-level People’s Committees shall submit the final budget accounts to commune-level People’s Councils for consideration and approval;

c/ Within 5 working days after commune-level budget account finalization statements are approved, commune-level People’s Committees shall send such statements to district-level People’s Committees and finance agencies.

6. Order of making district budget account finalization:

a/ District-level finance agencies shall appraise the account finalization of commune-level budget revenues and expenditures approved by commune-level People’s Councils; appraise, consider and approve final budget accounts of level-I budget-estimating units at their level; summarize data and make statements of account finalization of state budget revenues in their districts as assigned and account finalization of district budget revenues and expenditures, then submit them to district-level People’s Committees for sending to socio-economic affairs commissions of district-level People’s Councils for verification, and concurrently to provincial-level Finance Departments;

b/ District-level People’s Committees shall report to standing bodies of district-level People’s Councils on budget account finalization for the latter’s opinions. After obtaining opinions of standing bodies of district-level People’s Councils, district-level People’s Committees shall submit the final budget accounts to district-level People’s Councils for consideration and approval;

c/ Within 5 working days after budget account-finalization statements are approved, district-level People’s Committees shall send such statements to provincial-level People’s Committees and Finance Departments.

7. Order of making provincial budget account finalization:

a/ Provincial-level Finance Departments shall appraise district budget final accounts approved by district-level People’s Councils; appraise, consider and approve final budget accounts of level-I budget-estimating units at their level; summarize data and make statements of account finalization of state budget revenues in their provinces and account finalization of local budget revenues and expenditures, then submit them to provincial-level People’s Committees for sending to economic-budget affairs commissions of provincial-level People’s Councils for verification, and concurrently to the Ministry of Finance and State Audit Office of Vietnam;

b/ Provincial-level People’s Committees shall report to standing bodies of provincial-level People’s Councils on budget account finalization for the latter’s opinion. After obtaining opinions of standing bodies of provincial-level People’s Councils, provincial-level People’s Committees shall submit the final budget accounts to provincial-level People’s Councils for approval;

c/ Within 5 working days after budget account-finalization statements are approved, provincial-level People’s Committees shall send such statements to the Ministry of Finance and State Audit Office of Vietnam.

8. Order of making state budget account finalization:

a/ Level-I budget-estimating units of the central budget shall make statements of account finalization of budget revenues and expenditures of a year under their management, then send them to the Ministry of Finance and State Audit Office of Vietnam before October 1 of the subsequent year;

b/ Provincial-level People’s Committees shall send to the Ministry of Finance and State Audit Office of Vietnam statements of account finalization of local budgets of a year before October 1 of the subsequent year;

c/ The Ministry of Finance shall appraise, consider and approve statements of account finalization of budget revenues and expenditures of level-I budget-estimating units of the central budget;

d/ Based on results of appraisal, consideration and approval of account finalization statements of level-I budget-estimating units of the central budget and final local budget accounts approved by provincial-level People’s Councils, the Ministry of Finance shall summarize data and make state budget account-finalization statements, then submit them to the Government and send them to the State Audit Office of Vietnam within 14 months after the end of the budget year;

dd/ Order and procedures for verification by agencies of the National Assembly of final state budget accounts must comply with the National Assembly Standing Committee’s resolution promulgating the regulation on formulation, verification and submission to the National Assembly for decision state budget estimates and plans on allocation of the central budget and approval of final state budget accounts;

e/ The National Assembly shall consider and approve final state budget accounts of a budget year within 18 months after the end of such budget year.

Article 45.Forms of state budget account-finalization statements

1. Forms of state budget account-finalization statements to be submitted by the Government to the National Assembly must comply with the National Assembly Standing Committee’s promulgating the regulation on formulation, verification and submission to the National Assembly for decision state budget estimates and plans on allocation of the central budget and approval of final state budget accounts.

2. The Ministry of Finance shall set specific forms of state budget account-finalization statements.

Chapter VI

DISCLOSURE OF THE STATE BUDGET, PUBLIC OVERSIGHT OF
THE STATE BUDGET

Article 46.Subjects and scope of budget disclosure

1. Subject to budget disclosure are:

a/ State budgets at all levels;

b/ Budget-estimating units;

c/ Organizations entitled to state budget support;

d/ Capital construction investment programs and projects funded by the state budget.

2. Budget revenue-collecting agencies, finance agencies and the State Treasury shall disclose state budget-related procedures.

Article 47.Contents of disclosure of the state budget

1. Contents of disclosure of the state budget and central budget:

a/ Disclosure of data, explanations about state budget estimates to be submitted to the National Assembly and state budget estimates decided by the National Assembly; and final state budget accounts approved by the National Assembly, covering:

The state budget revenue-expenditure balance;

State budget revenues in each field and from each tax/duty;

State budget expenditures, including expenditures for development investment, current expenditures, expenditures for payment of loan interests, provision of aid, supplementation to financial reserve funds, and budget provisions;

State budget deficit; total borrowings of the state budget, including borrowings to offset the budget deficit and borrowings to pay loan principals of the state budget;

Central budget expenditures in each field; total expenditures and expenditures in each field of the central budget for each of ministries, ministerial-level agencies, government-attached agencies or other central agencies; central budget expenditures for national target programs;

State budget revenues in localities, local budget expenditures, budget-balancing transfers and targeted transfers from the central budget to budget of each province or centrally run city; percentage (%) revenue sharing between the central budget and budget of each province or centrally run city;

b/ Disclosure of data, explanations about the implementation of state budget revenue and expenditure estimates, including state budget revenue-expenditure balance, state budget revenues in each field, state budget expenditures for development investment, and current expenditures.

2. Contents of disclosure of local budgets at all levels:

a/ Disclosure of data, explanations about local budget estimates to be submitted to People’s Councils and local budget estimates decided by People’s Councils; and final local budget accounts approved by People’s Councils, covering:

State budget revenues in localities in each field and from each tax/duty;

Local budget revenue-expenditure balance;

Budget revenues enjoyable by localities as assigned;

Local budget expenditures, including expenditures for development investment, current expenditures, expenditures for payment of loan interests, supplementation to financial reserve funds for provincial-level budgets, and budget provisions;

Budget expenditures at each level in each field; total expenditures and expenditures in each field, at each level for each attached agency or unit; expenditures for capital construction from local budgets for each project or work; expenditures for projects and national target programs;

State budget revenues in each lower-level locality, expenditures of lower-level budgets, budget-balancing transfers and targeted transfers from each local budget level to each lower-level budget;

Percentage (%) of revenue sharing between budgets of local administrations at all levels and each lower-level budget in the years in the budget stabilization period;

b/ Disclosure of data, explanations about the implementation of state budget revenue estimates in localities, local budget revenue estimates and local budget expenditure estimates.

3. Detailed data and explanatory reports on budgets for national defense, security and national reserves must comply with Point a, Clause 1, Article 15 of the Law on the State Budget.

4. Contents of disclosure of state budget-related procedures must comply with Point b, Clause 2, Article 15 of the Law on the State Budget.

Article 48.Contents of budget disclosure by budget-estimating units, organizations entitled to state budget support, capital construction investment programs and projects funded with state budget capital

1. For budget-estimating units:

a/ Budget revenue and expenditure estimates assigned by competent authorities, the implementation of budget estimates and final budget accounts approved by competent authorities;

b/ Budget revenue and expenditure estimates assigned to lower-level budget-estimating units; and public disclosure of approved or appraised final budget accounts of lower-level budget-estimating units.

2. Organizations entitled to state budget support shall disclose data of budget revenue and expenditure estimates assigned by competent authorities, the implementation and account finalization of financial revenues and expenditures, contributions of organizations and individuals; and bases for determining levels and monetary amounts of state budget support they are entitled to.

3. Budget disclosure for capital construction investment programs and projects funded with state budget capital must comply with the Law on Public Investment and relevant legal documents.

Article 49.Time limit for budget disclosure

1. A report on state budget estimates shall be disclosed within 5 working days after the Government sends it to the National Assembly deputies or a People’s Committee sends it to the People’s Council deputies.

2. A report on state budget estimates decided by a competent authority or a state budget account-finalization statement approved by a competent authority shall be disclosed within 30 days after it is issued.

3. A quarterly or biannual report on implementation of the state budget shall be disclosed within 15 days after the end of a quarter or the first six months of a year.

4. An annual report on implementation of the state budget shall be disclosed when it is submitted by the Government to the National Assembly or by a People’s Committee to a People’s Council.

5. Disclosure of budget estimates of a budget-estimating unit or an organization entitled to state budget support shall be made within 15 days after such estimates are assigned by a competent authority; disclosure of implementation of the budget in the whole year of a budget-estimating unit shall be made within 5 working days after such unit reports it to the immediate higher-level budget-estimating unit; disclosure of final budget accounts of a budget-estimating unit shall be made within 15 days after they are approved or appraised by a competent authority.

6. State budget-related procedures shall be disclosed within 5 working days after relevant regulations are issued by a competent authority.

Article 50.Disclosure of results of implementation of recommendations of the State Audit Office of Vietnam

1. Contents to be disclosed:

a/ Results of jobs performed according to recommendations of the State Audit Office of Vietnam;

b/ Jobs not yet performed according to recommendations of the State Audit Office of Vietnam and explanations about reasons for non-performance.

2. Results of implementation of recommendations of the State Audit Office of Vietnam shall be disclosed within 30 days after relevant documents are issued.

Article 51.Budget disclosure methods, norms and forms

1. The disclosure of the state budget shall be made by one or several of the following methods: announcement at sessions, public display at working offices of agencies, organizations and units; distribution of publications; written notices to related agencies, organizations, units and individuals; posting on portals; and announcement in the mass media. Organizations, agencies and units that have portals shall disclose their budgets via such portals.

2. The Ministry of Finance shall prescribe specific norms, forms and methods of budget disclosure applicable to entities liable to budget disclosure.

Article 52.Public oversight of the state budget

1. The Vietnam Fatherland Front Committees at all levels shall assume the prime responsibility for, and coordinate with the Front’s members in, organizing the public oversight of the state budget.

2. The Vietnam Fatherland Front Committees at all levels shall receive directly or through the Front’s members information and oversight requests; and assume the prime responsibility for formulating plans on oversight of the state budget and organizing the oversight of the state budget under plans and in accordance with law.

3. Contents of oversight are specified at Points a, b and c, Clause 1, Article 16 of the Law on the State Budget.

4. Oversight methods:

a/ Studying and examining documents issued by competent state agencies in state budget fields relating to the people’s lawful rights and interests;

b/ Organizing oversight teams;

c/ Joining competent agencies and organizations in conducting the oversight;

d/ Through activities of commune-level people’s inspection boards or community-based investment supervision boards.

5. Agencies, units and organizations empowered to conduct oversight and related agencies shall:

a/ Provide information and documents according to prescribed oversight contents to the Vietnam Fatherland Front Committees at all levels;

b/ Consider to settle, explain and promptly respond to recommendations of the people and Vietnam Fatherland Front Committees at all levels or report to competent agencies on issues falling beyond their competence;

c/ Disclose contents of settlement or explanatory replies to recommendations of the people and Vietnam Fatherland Front Committees at all levels on oversight activities.

Chapter VII

IMPELEMENTATION PROVISIONS

Article 53.Transitional provisions

1. The final state budget accounts of 2015 and 2016 must comply with Law No. 01/2002/QH11 on the State Budget and the Government’s Decree No. 60/2003/ND-CP of June 6, 2003, detailing and guiding the implementation of the Law on the State Budget.

2. The 2011-2015 budget stabilization period shall be extended through the end of 2016. The subsequent budget stabilization period shall be from 2017 to 2020.

3. The provinces and centrally run cities that have a balance of borrowed loans by December 31, 2016, exceeding the borrowed loan balance limit prescribed by the Law on the State Budget shall set aside their assigned local budget revenues in their budget estimates of 2017 and subsequent years and reduce expenditures under their medium-term public investment plans to increase expenditures for payment of their loan principals, ensuring the borrowed loan balance not exceeding the local borrowed loan balance limit prescribed by the Law on the State Budget.

Article 54.Effect

1. This Decree takes effect on January 1, 2017, and applies from the 2017 budget year.

2. To annul the Government’s Decree No. 60/2003/ND-CP of June 6, 2003, detailing and guiding the implementation of the Law on the State Budget.

Article 55.Implementation responsibility

1. The Minister of Finance shall guide and organize the implementation of this Decree.

2. Ministers, heads of ministerial-level agencies, government-attached agencies and other central agencies, and chairpersons of provincial-level People’s Committees shall implement this Decree.-

On behalf of the Government
Prime Minister
NGUYEN XUAN PHUC