Decree No. 45/2017/ND-CP dated April 21, 2017 of the Government on detailing the formulation of five-year finance plans and three-year finance-state budget plans

DECREE

Detailing the formulation of five-year finance plans and three-year finance-state budget plans[1]

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

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

Pursuant to the June 18, 2014 Law on Public Investment;

Pursuant to the June 17, 2009 Law on Management of Public Debts;

At the proposal of the Minister of Finance;

The Government promulgates the Decree detailing the formulation of five-year finance plans and three-year finance-state budget plans.

Chapter I

GENERAL PROVISIONS

Article 1.Scope of regulation

This Decree details a number of articles of the Law on the State Budget regarding formulation of five-year finance plans and three-year finance-state budget plans; and tasks and powers of related agencies and units in the formulation of these plans.

Article 2.Subjects of application

1. Ministries, ministerial-level agencies, government-attached agencies and other central agencies (below referred to as ministries and central agencies); People’s Committees of provinces and centrally run cities (below referred to as provincial-level People’s Committees); provincial-level agencies and units; and other agencies and organizations involved in the formulation of five-year finance plans and three-year finance-state budget plans.

2. This Decree does not apply to agencies and organizations that do not have regular relations with the state budget.

Article 3.Interpretation of terms

In this Decree, the terms below are construed as follows:

1. Five-year finance plan means a finance plan drawn up for a five-year period together with the five-year socio-economic development plan under Article 17 of the Law on the State Budget. Five-year finance plans include national five-year finance plans and provincial-level five-year finance plans.

2. Three-year finance-state budget plan means a finance-state budget plan formulated annually by the successive method for three consecutive years, including the year of budget estimation and two following years, under Clauses 1 and 2, Article 43 of the Law on the State Budget. Three-year finance-state budget plans include national three-year finance-state budget plans and provincial-level three-year finance-state budget plans.

3. Three-year finance-state budget plans of ministries, central agencies and provincial-level agencies and units are three-year finance-state budget plans formulated annually by the successive method by ministries, central agencies and provincial-level agencies and units for three consecutive years under Clause 3, Article 43 of the Law on the State Budget.

4. Successive method means that annually agencies and units assigned to formulate three-year finance-state budget plans update and assess new developments in the socio-economic and state budget situation and clearly identify issues that newly arise so as to set an order of priority for allocation of resources in the medium term, creating a basis for annual state budget estimation.

5. Ceiling budget expenditure means the state budget expenditure limit notified by a competent agency to a ministry, central agency or provincial-level agency or unit for each year in a three-year planning period, in which the ceiling expenditure in the first year is the figure for budget expenditure estimate examination notified by a competent state agency under Clause 22, Article 4 of the Law on the State Budget.

6. Basic expenditure means the state budget expenditure for the performance of tasks and implementation of activities, regimes and policies in each sector which are and will be further performed or implemented in the three-year planning period and for which a competent agency has decided and committed to arranging funds under the state budget expenditure estimate of the previous year.

7. New expenditure means the state budget expenditure for the performance of new tasks and implementation of new activities, regimes and policies in each sector which have been approved by competent agencies, including also those which have been adopted but for which funds have not yet been arranged and which need to be performed or implemented in the three-year planning period.

8. Provisional debt means a debt which has not yet arisen but likely arises upon occurrence of at least one of pre-identified conditions.

Article 4.Relations between five-year finance plans, three-year finance-state budget plans and annual state budget estimates

1. Five-year finance plans are finance plans drawn up to serve the performance of objectives and tasks of national and local socio-economic development plans in each five-year planning period; set forth primary finance-state budget objectives and targets in each five-year planning period; and play the role as orientations for three-year finance-state budget plans and annual state budget estimates.

2. Three-year finance-state budget plans shall be formulated annually serving the implementation of five-year finance plans, specifying major contents on the state budget balancing framework and ceiling budget expenditures of ministries, agencies, units and localities in three consecutive years, taking into account current developments in the socio-economic and finance-budget situation as well as forecasts for the three-year planning period, and serving as a basis for making, considering and deciding on annual state budget estimates.

3. Annual state budget estimates concretize strategic orientations laid down in the five-year finance plans and objectives and tasks of three-year finance-state budget plans. An annual state budget estimate’s basic targets are as the same as those set for the first year of the relevant three-year finance-state budget plan.

Chapter II

FORMULATION OF FIVE-YEAR FINANCE PLANS

Article 5.Formulators of five-year finance plans

1. The Ministry of Finance shall assume the prime responsibility for, and coordinate with the Ministry of Planning and Investment and related ministries and central agencies in, formulating national five-year finance plans and reporting them to the Government for submission to the National Assembly for consideration and decision.

2. Provincial-level People’s Committees shall direct provincial-level Finance Departments to assume prime responsibility for, and coordinate with provincial-level Planning and Investment Departments and other related local agencies in, formulating provincial-level five-year finance plans and reporting them to provincial-level People’s Councils for consideration and decision.

Article 6.Grounds for formulation of five-year finance plans

1. Grounds for formulation of a national five-year finance plan:

a/ The implementation of the five-year socio-economic development plan and finance plan of the previous period;

b/ Socio-economic development and finance-state budget objectives, targets and orientations set forth in the national strategy and five-year plan on socio-economic development; and strategies on finance, public debts and tax system reform;

c/ Regulations on finance-state budget, including also treaties which the Socialist Republic of Vietnam has signed or acceded to; and orientations for revision of existing regulations and promulgation of new ones in the five-year planning period;

d/ Forecasts about the international and domestic economic and financial situation which might affect the ability to mobilize and the demand for finance-state budget resources in the five-year planning period;

dd/ The Prime Minister’s directions on formulation of five-year socio-economic development plans and five-year finance plans.

2. Grounds for formulation of a provincial-level five-year finance plan:

a/ The implementation of the local five-year socio-economic development plan and finance plan of the previous period;

b/ Socio-economic development and finance-state budget objectives, targets and orientations set forth in the national strategy and five-year plan on socio-economic development; strategies on finance, public debts and tax system reform; socio-economic development objectives, targets and orientations in the five-year planning period of the locality; and approved socio-economic development master plan of the locality;

c/ Forecasts about the socio-economic situation which might affect the locality’s ability to mobilize and demand for finance-state budget resources in the five-year planning period;

d/ Regulations on finance-state budget, including also mechanisms for assignment of revenue sources and spending tasks between the central budget and local budgets and among local administrations of different levels; and orientations for revision of existing regulations and promulgation of new ones in the five-year planning period;

dd/ Directions of the Prime Minister and provincial-level People’s Committee on formulation of five-year socio-economic development plans and five-year finance plans.

Article 7.Requirements on formulation of five-year finance plans

1. Being conformable with the objectives, tasks and solutions set in the national socio-economic development strategy; strategies on finance, public debts and tax system reform; and with national and local socio-economic development objectives, targets and orientations in each five-year planning period.

2. Being conformable with forecasts about the socio-economic situation, capacity of balancing state budget revenue sources, raising funds and repaying debts, and requirements on national financial safety limits in each five-year planning period; being conformable with the principles of balancing, management and assignment of state budget revenue sources and spending tasks and principles of public debt management.

3. Prioritizing the allocation of state budget funds for implementation of major guidelines and policies of the Party and State in each period.

4. Ensuring publicity, transparency and effectiveness.

Article 8.Contents of five-year finance plans

1. Contents of a national five-year finance plan:

a/ Evaluation of the performance of major objectives, targets and tasks of the national five-year finance plan of the previous period; achievements, shortcomings, limitations, reasons therefor and drawn lessons and experiences;

b/ Determination of overall objectives of the five-year finance plan;

c/ Determination of specific and major finance-state budget objectives, covering state budget revenues and structure of state budget revenues; state budget expenditures and structure of state budget expenditures; state budget deficit; government debts, public debts and national foreign debts; domestic and foreign borrowings; mobilization and distribution of resources, and structure of the state budget in the five-year planning period;

d/ Determination of the state budget balance, covering:

Total state budget revenues (the absolute figure and ratio to gross domestic product - GDP), sector-based structure of state budget revenues; regulatory and managerial solutions to mobilizing state budget revenue sources;

Total state budget expenditures (the absolute figure and ratio to GDP), structure of state budget expenditures categorized by development investment expenditure, national reserve expenditure, current expenditure, interest payment expenditure, expenditure for aid provision and other expenditures; factors affecting state budget expenditures and regulatory and managerial solutions to ensuring a reasonable and sustainable structure of state budget expenditures and improving state budget spending efficiency;

State budget balance: State budget deficit or surplus (the absolute figure and ratio to GDP); total borrowings of the state budget, including borrowings for offsetting of deficit and borrowings for repayment of principal debts of the state budget, and solutions to ensuring safety and sustainability of the state budget;

dd/ Debt management indicators, including debt limits; balance of public debts, government debts and national foreign debts; ratio of debt repayment expenditure to total state budget revenue; total level of debts; and regulatory and managerial solutions to ensuring public debt safety and stability;

e/ Forecasts about risks that might affect the state budget balance and debt management indicators;

f/ Other financial solutions to ensuring the implementation of the national five-year finance plan.

2. Contents of a provincial-level five-year finance plan:

a/ Evaluation of performance of major objectives, targets and tasks set in the local five-year finance plan of the previous period; achievements, shortcomings, limitations, reasons therefor and drawn lessons and experiences;

b/ Determination of the overall objectives of the five-year finance plan;

c/ Determination of specific and major finance-budget objectives of the locality, covering state budget revenues and revenue structure, state budget expenditures and expenditure structure; local budget deficit; debts of the provincial budget; mobilization and distribution of resources and structure of the local budget in the five-year planning period;

d/ Determination the local budget balance, covering:

State budget revenues from local sources and revenues for balancing the local budget, covering total revenues; the figures and structure of state budget revenues categorized by domestic revenue and import and export revenue; factors affecting local budget revenues and regulatory and managerial solutions to ensuring local budget revenue sources;

Local budget expenditures, covering total expenditures, figures and structure of local budget expenditures categorized by development investment expenditure, current expenditure, interest payment expenditure; factors affecting local budget expenditures and regulatory and managerial solutions to ensuring a reasonable and stable expenditure structure and improving the efficiency of local budget spending;

Local budget balance: Local budget deficit or surplus, total borrowings of the local budget, including borrowings for offsetting deficit and borrowings for repayment of principal debts of the local budget; and solutions to ensuring safety and stability of the local budget;

dd/ Local debt management indicators, including limits and balance of debts of local administrations; loan borrowing and debt repayment plans; and regulatory and managerial solutions to ensuring safety and stability of debts of local administrations;

e/ Forecasts about risks that might affect the local budget balance and local debt management indicators;

f/ Other financial solutions to implementing the five-year finance plan.

Article 9.Order of formulation of five-year finance plans

1. Order of formulating national five-year finance plans:

a/ Before March 31 of the fourth year of each five-year finance plan, the Prime Minister shall issue a directive on formulation of the national five-year finance plan for the subsequent period;

b/ Before December 31 of the fourth year of each five-year finance plan, the Ministry of Planning and Investment shall assume the prime responsibility for, and coordinate with related ministries and agencies in, anticipating major socio-economic targets for the subsequent five-year period and send them to the Ministry of Finance for use as a basis for formulation of the national five-year finance plan for the subsequent period;

c/ Before June 30 of the fifth year of each five-year finance plan, based on the socio-economic development plan of the subsequent five-year period already submitted to the Government, 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, formulating the national five-year finance plan for the subsequent period and submitting it to the Prime Minister;

d/ Before September 20 of the fifth year of each five-year finance plan, based on the Prime Minister’s opinions, the Ministry of Finance shall finalize the national five-year finance period for the subsequent period and report it to the Government for submission to the Standing Committee and agencies of the National Assembly;

dd/ Before October 20 of the fifth year of each five-year finance plan, based on opinions of the Standing Committee and Committees of the National Assembly, the Ministry of Finance shall finalize the national five-year finance plan for the subsequent period and report it to the Prime Minister for submission to the National Assembly.

2. Order of formulation of provincial-level five-year finance plans:

a/ Before May 15 of the fourth year of each five-year finance plan based on the Prime Minister’s directive on formulation of the five-year finance plan for the subsequent period, provincial-level People’s Committees shall direct provincial-level Finance Departments to assume the prime responsibility for, and coordinate with provincial-level Planning and Investment Departments and related agencies and units in, formulating their local five-year finance plans for the subsequent period;

b/ Before November 30 of the fourth year of each five-year finance plan, provincial-level People’s Committees shall report their local five-year finance plans for the subsequent period to their provincial-level People’s Councils’ Standing Bodies;

c/ Before December 31 of the fourth year of each five-year finance plan, provincial-level People’s Committees shall send their local five-year finance plans for the subsequent period which have been finalized based on opinions of provincial-level People’s Councils’ Standing Bodies to the Ministry of Finance and Ministry of Planning and Investment for opinion;

d/ Before July 20 of the fifth year of each five-year finance plan, provincial-level People’s Committees shall finalize their local five-year finance plan for the subsequent period and send them together with documents on annual state budget estimates to the Ministry of Finance and Ministry of Planning and Investment;

dd/ Based on the opinions of the Ministry of Finance and Ministry of Planning and Investment, provincial-level People’s Committees shall finalize their local five-year finance plans for the subsequent period and report them to their provincial-level People’s Councils for consideration and decision together with the budget estimates for the first year of the subsequent five-year planning period;

e/ Before December 10 of the fifth year of each five-year finance plan, based on their local socio-economic development plans for the subsequent five-year period, provincial-level People’s Councils shall consider and decide on their local five-year finance plans of the subsequent period.

Article 10.Adjustment of five-year finance plans

1. For national five-year finance plans

a/ Upon occurrence of any changes in major objectives or targets of the national five-year socio-economic development plan or occurrence of urgent defense and security requirements, leading to great changes in the state budget balance or ability to raise funds from various sources, the Ministry of Finance shall assume the prime responsibility for, and coordinate with the Ministry of Planning and Investment and related agencies in, formulating a plan on adjustment of the national five-year finance plan and reporting it to the Government for submission to the National Assembly for decision together with the budget estimate of the year of adjustment;

b/ The formulation of plans on adjustment of national five-year finance plans (if any) must comply with the order and time frame of formulating national five-year finance plans.

2.  For provincial-level five-year finance plans:

a/ Upon occurrence of any changes in major objectives or targets of its local five-year socio-economic development plan or occurrence of urgent defense and security requirements, leading to great changes in the local budget balance or ability to raise funds from various sources, a provincial-level People’s Committee shall direct its provincial-level Finance Department to assume the prime responsibility for formulating a plan on adjustment of the provincial-level five-year finance plan, report it to the Standing Body of the provincial-level People’s Council for opinion, and then send it to the Ministry of Finance and Ministry of Planning and Investment for opinion before submitting it, together with the budget estimate of the year of adjustment, to the provincial-level People’s Council for decision;

b/ The formulation of plans on adjustment of provincial-level five-year finance plans (if any) must comply with the order and time frame of formulating provincial-level five-year finance plans;

c/ Provincial-level People’s Committees shall send to the Ministry of Finance and Ministry of Planning and Investment adjusted provincial-level five-year finance plans within 30 days after such plans are approved by provincial-level People’s Councils.

Article 11.Tasks and powers of agencies and organizations in formulation of five-year finance plans

1. Tasks and powers of the Prime Minister:

a/ To promulgate directives on formulation of national five-year finance plans;

b/ To direct the formulation of national five-year finance plans and adjustment of national five-year finance plans when necessary;

c/ To organize inspection of the formulation of five-year finance plans by localities;

2. Tasks and powers of the Ministry of Finance:

a/ To propose the Prime Minister to promulgate directives on formulation of national five-year finance plans;

b/ To assume prime responsibility for formulating national five-year finance plans and reporting them the Prime Minister and Government for submission to the National Assembly Standing Committee and National Assembly for decision;

c/ To assume the prime responsibility for formulating plans on adjustment of national five-year finance plans under Clause 1, Article 10 of this Decree;

d/ To give opinions on formulation or adjustment of provincial-level five-year finance plans.

2. Tasks and powers of the Ministry of Planning and Investment:

a/ To assume the prime responsibility for, and coordinate with ministries, central agencies and localities in, determining major socio-economic targets for each five-year period serving the formulation of national five-year finance plans;

b/ To coordinate with the Ministry of Finance and related ministries and sectors in formulating and adjusting national five-year finance plans;

c/ To give opinions on the formulation or adjustment of provincial-level five-year finance plans.

4. Tasks and powers of ministries and central agencies:

a/ To coordinate with the Ministry of Planning and Investment in determining major socio-economic targets of each five-year period in the sectors and fields under their management serving the formulation of national five-year finance plans;

b/ To coordinate with the Ministry of Finance in formulating or adjusting national five-year finance plans.

5. Tasks and powers of provincial-level People’s Committees:

a/ To direct provincial-level Planning and Investment Departments to assume the prime responsibility for, and coordinate with related local agencies and units in, determining major socio-economic targets of their localities for each five-year period and notify them to provincial-level Finance Departments serving the formulation of provincial-level five-year finance plans;

b/ To direct provincial departments and local functional agencies to coordinate with provincial-level Investment and Planning Departments in determining major socio-economic targets in the sectors and fields under their management in each five-year period serving the formulation and adjustment of provincial-level five-year finance plans;

c/ To direct provincial-level Finance Departments to assume the prime responsibility for, and coordinate with provincial-level Planning and Investment Departments, Tax Departments, Customs Departments and other related local agencies and units in, formulating and adjusting provincial-level five-year finance plans and reporting them to provincial-level People’s Committees for submission to provincial-level People’s Councils for decision and sending to the Ministry of Finance and Ministry of Planning and Investment under this Decree.

Chapter III

FORMULATION OF THREE-YEAR FINANCE-STATE BUDGET PLANS

Article 12.Formulators of three-year finance-state budget plans

1. The Ministry of Finance shall assume the prime responsibility for, and coordinate with the Ministry of Planning and Investment in, summarizing  national three-year finance-state budget plans and reporting them to the Government for submission to the National Assembly for reference during the discussion, consideration and approval of annual state budget estimates and central budget allocation plans.

2. Provincial-level Finance Departments shall assume the prime responsibility for, and coordinate with provincial-level Planning and Investment Departments in, summarizing provincial-level three-year finance-state budget plans and reporting them to provincial-level People’s Committees for submission to provincial-level People’s Councils for reference during the discussion, consideration and approval of annual local budget estimates and allocation plans.

3. Ministries, central agencies and level-I budget-estimating agencies and units at the provincial level shall formulate three-year finance-state budget plans under their management and send them to finance and planning and investment agencies of the same level for summarization.

Article 13.Grounds for formulation of three-year finance-state budget plans

1. Grounds for formulation of a national three-year finance-state budget plan:

a/ The implementation of the socio-economic plan and state budget estimates of the current year;

b/ The national strategy for socio-economic development; strategies for finance, public debts and tax system reform; five-year plans on socio-economic development, finance, and public investment (in case the three planning years are covered by a five-year plan), or objectives, targets and orientations for socio-economic development, finance, and public investment in 5 subsequent years (in case the three planning years belong to two consecutive five-year planning periods);

c/ Planned major socio-economic targets in the three planning years; state budget revenue and expenditure framework and structure, estimated budget expenditures in the fields identified in the national three-year finance-state budget plan made in the previous year;

d/ Current regulations and orientations for revision and promulgation of the law on finance-state budget in the three planning years;

dd/ The Prime Minister’s directive and guidance of the Ministry of Finance and Ministry of Planning and Investment on formulation of three-year finance-state budget plans;

e/ Three-year finance-state budget plans of ministries, central agencies and provinces and centrally run cities.

2. Grounds for formulation of a provincial-level three-year finance-state budget plan:

a/ The implementation of the local socio-economic plan and state budget estimates of the current year;

b/ The national strategy for socio-economic development; strategies for finance, public debts and tax system reform; national and local five-year plans on socio-economic development, finance and public investment (in case the three planning years are covered by a five-year plan), or the locality’s objectives, targets and orientations for socio-economic development, finance and public investment in 5 subsequent years  (in case the three planning years belong to two consecutive five-year planning periods);

c/ Planned major socio-economic targets of the province or centrally run city in the three planning years; estimated budget expenditures in the fields identified under the local three-year finance-state budget plan made in the previous year;

d/ Current regulations and orientations for revision and promulgation of centrally and locally promulgated laws and regulations on finance-state budget in the three planning years;

dd/ The Prime Minister’s directive, guidance of the Ministry of Finance and Ministry of Planning and Investment, and the provincial-level People’s Committee’s direction on formulation of three-year finance-state budget plans;

e/ Three-year finance-state budget plans of provincial-level agencies and units.

3. Grounds for formulation of a three-year finance-state budget plan of a ministry, central agency or provincial-level agency or unit:

a/ The implementation of major objectives, tasks, regimes and policies and state budget estimates of the current year;

b/ Development strategy, master plan and plan for the sector, field, agency or unit; medium-term public investment plan of the agency or unit;

c/ Current regulations and orientations for revision and promulgation of centrally and locally promulgated laws and regulations on finance-state budget in the three planning years;

d/ Planned socio-economic targets that affect the implementation of objectives and tasks of the agency or unit in the three planning years;

dd/ Competent state agencies’ direction on formulation of three-year finance-state budget plans in the three planning years;

e/ Ceiling budget expenditure notified by a competent agency to the ministry, central agency or provincial-level agency or unit under the three-year finance-state budget plan made in the previous year.

Article 14.Requirements on three-year finance-state budget planning

1. To conform with the practical implementation of five-year and annual objectives, targets and orientations for socio-economic development and finance, and with forecasts for the three planning years.

2. To fully reflect state budget revenues and other revenues as prescribed by law; and budget expenditures estimated according to the structure of fields and major expenditures not exceeding the ceiling budget expenditure notified by a competent agency.

3. To comply with the principles of budget balancing, management and assignment, and public debt management prescribed by the Law on the State Budget and the Law on Public Debt Management.

4. To be formulated according to the successive method for a 3-year period, in which the state budget estimate planned for the first year is used as reference for formulating, submitting and deciding on annual state budget estimates.

5. The process of formulation, reporting, summarization and submission is incorporated into the annual budget estimation process.

Article 15.Contents of three-year finance-state budget plans

1. Contents of a national three-year finance-state budget plan:

a/ The performance of socio-economic tasks of the current year and planned major socio-economic targets in the three planning years; assessment of the development trend of the economy over 5 years from the year preceding the current year through the third year of the planning period, comparison with the objectives and targets set in the five-year socio-economic development plan already decided by the National Assembly;

b/ The implementation of state budget estimates of the current year; important mechanisms and policies planned for implementation in the budget estimation year  and 2 subsequent years to ensure finance-state budget operations conformable with the objectives and orientations of the five-year finance plan;

c/ Determination of state budget revenues and expenditures and structure of the budget estimation year and 2 subsequent years, including:

State budget revenue estimates summarized by revenue item and the structure of domestic revenue, crude oil revenue, import-export revenue and aid revenue; explanations about factors affecting budget revenues, including revision and promulgation of mechanisms and policies on state budget revenues and state budget revenue management;

State budget expenditure estimates summarized by spending area and the structure of development investment expenditure, current expenditure, national reserve expenditure, interest payment expenditure, aid expenditure, other expenditures; explanations about factors affecting budget expenditures, including revision and promulgation of mechanisms and policies on state budget expenditures;

State budget deficit or surplus estimate; estimated ratios of public debts, government debts and national foreign debts and debt safety indicators;

Estimated total borrowing for the state budget, including borrowing to offset state budget deficit and borrowing for payment of principal debts of the state budget;

d/ Major orientations for arrangement of the structure of state budget revenues, expenditures and balancing; principles and criteria for state budget allocation; priority in state budget allocation by sector and major program, project and spending task;

dd/ Ceiling budget expenditures for ministries and central agencies detailed by the structure of development investment expenditure and current expenditure and divided according to each spending area; estimated expenditures for budget-balancing transfers and targeted transfers from the central budget to each local budget;

e/ Anticipation of risks for the state budget balancing framework and debt management indicators;

g/ Solutions to implementing the three-year finance-state budget plan.

2. Contents of a provincial-level three-year finance-state budget plan:

a/ Assessment of the performance of socio-economic tasks of the current year, planned major socio-economic targets of the locality in the three planning years, comparison with the objectives, targets and orientations set in the five-year socio-economic development plan of the locality;

b/ The implementation of local state budget estimates of the current year; centrally and locally promulgated important mechanisms and policies expected to be implemented in the three planning years to ensure finance-state budget operations conformable with the objectives and orientations of the provincial-level five-year finance plan;

c/ Determination of the overall budget balancing framework of the locality in the budget estimation year and 2 subsequent years, including:

State budget revenue estimates of the locality and local budget balancing revenues detailed by revenue item and the structure of domestic revenue, crude oil revenue, import-export revenue and aid revenue, budget-balancing transfers and targeted transfers from the central budget to the local budget; explanations about factors affecting budget revenues, including revision and promulgation of mechanisms and policies on state budget revenues and state budget revenue management;

Local budget expenditure estimates summarized by spending area and the structure of development investment expenditure, current expenditure, interest payment expenditure, other expenditures; local budget balancing expenditure and expenditure from targeted transfers from the central budget; explanations about factors affecting budget expenditures, including revision and promulgation of mechanisms and policies on state budget expenditures;

Local state budget deficit or surplus estimate; estimated ratios of debts and debt management indicators of the local budget;

d/ Major orientations for arrangement of the structure of local budget revenues, expenditures and balancing; principles and criteria for local budget allocation; priority in local budget allocation by sector and major program, project and spending task;

dd/ Determination of ceiling budget expenditures by spending area for provincial-level agencies and units and budget-balancing transfers and targeted transfers for subordinate administrations;

e/ Anticipation of risks for local budget revenues, expenditures and balancing and debt management indicators of the local budget;

g/ Solutions to implementing the provincial-level three-year finance-state budget plan.

3. Contents of a three-year finance-state budget plan of a ministry, central agency or provincial-level agency or unit:

a/ Assessment of the implementation of objectives and major  tasks of the ministry, agency or unit in the current year; planned objectives and major tasks of the ministry, agency or unit in the three planning years; for a ministries and line management agencies, in addition to the assessment and planning of directly implemented objectives and tasks, their plans should also provide assessments and planned objectives and tasks of the sector under their respective management; and comparison with the objectives and tasks set in the development strategy, master plan and plan for the sector, field, agency or unit;

b/ Assessment of the implementation of budget revenues and expenditures of the ministry, agency or unit of the current year and the preceding year; anticipation of financial resources, including estimation of revenues assigned to it for management, and budget expenditure needs of the ministry, agency or unit in the budget estimation year and 2 subsequent years;

c/ Major orientations for arrangement of the structure of revenues, expenditures and balancing of resources of the ministry, agency or unit; principles and criteria for budget allocation to its attached agencies and units; priority in arrangement of budget and other financial resources for major programs, projects and tasks;

d/ Tentative detailed state budget allocation, which must match in terms of the total level, structure of development investment expenditure and current expenditure assigned to each spending area in the priority order and detailed by basic expenditure and new expenditure;

dd/ Anticipation of risks arising in the implementation of the plan, including outstanding debts and contingent debts;

e/ Solutions to implementing the three-year finance-state budget plan of the ministry, agency or unit.

Article 16.Process of formulating three-year finance-state budget plans

1. On the basis of three-year finance-state budget plans reported to competent authorities in the previous year, the capacity to implement state budget estimates of the current year; and planned objectives and tasks for the three planning years, ministries, agencies, units and localities shall annually review and assess the conformity with the practical situation of their three-year finance-state budget plans reported to competent authorities in the previous year and send them to finance agencies and planning and investment agencies of the same level; provincial-level People’s Committees shall direct provincial-level Finance Departments to review provincial-level three-year finance-state budget plans and send them to the Ministry of Finance and the Ministry of Planning and Investment for consideration, review and determination of ceiling budget expenditures for the three planning years. An assessment report must cover:

a/ Identification of the ministry’s, agency’s, unit’s or locality’s spending demand in each year of the three planning years detailed by basic expenditure, new expenditure and the structure of development investment expenditure, current expenditure and other budget expenditures in accordance with regulations;

b/ Planned solutions to ensuring resources to meet spending demands in the priority order determined in conformity with each revenue source and state budget source;

c/ Proposed and recommended revision of finance-state budget mechanisms and policies and resources.

2. On the basis of socio-economic development plans, five-year finance plans, results of socio-economic and finance-budget task performance of the current year and planning for the three planning years, reports on results of three-year finance-state budget plan implementation of ministries, agencies, units and localities, finance agencies shall annually assume the prime responsibility for, and coordinate with planning and investment agencies in, setting ceiling expenditures for ministries, agencies and units; estimating budget-balancing transfers and targeted transfers from the central budget to the budget of each locality in the three planning years.

3. In case the spending demand of a ministry, an agency,  a unit or a locality is higher than the finance-state budget resource balancing capacity, the finance agency (for general state budget balancing and current expenditures) or the planning and investment agency (for development investment expenditures) may request the ministry, agency, unit or locality to provide additional information, data, descriptions and explanations, or assume the prime responsibility for, and coordinate with the related ministry, agency, unit or locality in, working out solutions to additionally raise extrabudgetary financial resources, and reviewing and arranging spending demands in the priority order or adjusting the notified ceiling expenditures to meet spending demands for fulfillment of the objectives and tasks assigned to the ministry, agency, unit or locality suitable to the resource balancing capacity.

The time for finance agencies and planning and investment agencies to work with ministries, agencies, units and localities must coincide with that for discussion of annual state budget estimates.

Article 17.Tasks and powers of agencies and organizations in formulation of three-year finance-state budget plans

1. Tasks and powers of the Prime Minister:

a/ To direct the formulation of three-year finance-state budget plans;

b/ To approve the state budget balancing framework; major orientations for arrangement of the structure of state budget revenues, expenditures and balancing; principles and criteria for state budget allocation; and state budget arrangement priority by sector, major program, project and spending task.

2. Tasks and powers of the Ministry of Finance:

a/ To guide ministries, central agencies and localities in formulating three-year finance-state budget plans;

b/ To determine the state budget balancing framework; structure of development investment expenditure, current expenditure, debt payment expenditure, aid, national reserve expenditure; transfers to the national financial reserve fund in the three planning years;

c/ To estimate budget revenues for each ministry, central agency and locality in the three planning years;

d/ To set ceiling budget expenditures for the three planning years for:

Current expenditures detailed for each sector, budget estimation year and 2 subsequent years, national target program and target program for each ministry or agency managing the national target program or target program;

Ceiling budget-balancing transfers and targeted transfers and estimated total state budget revenues in localities, total estimated local budget expenditures and a number of important spending areas in the budget estimation year and 2 subsequent years for each province and centrally run city;

dd/ To assume the prime responsibility for, and coordinate with the Ministry of Planning and Investment in, summarizing national three-year finance-state budget plans and submitting them to the Government for reporting to the National Assembly;

e/ To propose provincial-level People’s Committees to adjust their local three-year finance-state budget plans;

g/ To give opinions to the Ministry of Planning and Investment on major socio-economic targets as a basis for formulation of the state budget balancing framework in the three planning years; and on ceiling budget expenditures for development investment set for ministries and central agencies and targeted transfers for development investment expenditures from the central budget to local budgets;

h/ To guide in detail methods for setting ceiling budget expenditures, basic expenditures and new expenditures.

3. Tasks and powers of the Ministry of Planning and Investment:

a/ To assume the prime responsibility for, and coordinate with ministries, central agencies and localities in, setting major socio-economic targets for the three planning years and sending them to the Ministry of Finance as a basis for the formulation of national three-year finance-state budget plans;

b/ To guide ministries, central agencies and localities in formulating state budget-funded investment plans for the three planning years;

c/ To coordinate with the Ministry of Finance in setting the state budget balancing framework; structure of development investment expenditure, current expenditure, debt payment expenditure, aid, national reserve expenditure; transfers to the financial reserve fund in the three planning years;

d/ To set and notify ceiling development investment expenditures for ministries, central agencies and localities over the three planning years and send them to the Ministry of Finance for incorporation into the national three-year finance-state budget plan for submission to the Government;

dd/ To propose provincial-level People’s Committees to adjust their local three-year finance-state budget plans (for development investment funds) when necessary.

4. Tasks and powers of ministries and central agencies:

a/ To coordinate with the Ministry of Planning and Investment in setting major socio-economic targets of the sectors and fields under their management for the three planning years as a basis for formulation of national three-year finance-state budget plans;

b/ To formulate their three-year finance-state budget plans detailed by investment expenditure, current expenditure and spending area and send them to the Ministry of Finance and the Ministry of Planning and Investment for consideration and incorporation into national three-year finance-state budget plans for submission to the Government.

5. Tasks and powers of provincial-level People’s Committees:

a/ To guide the formulation of provincial-level three-year finance-state budget plans;

b/ To approve local budget balancing frameworks; major orientations for arrangement of the structure of local budget revenues, expenditures and balancing; principles and criteria for local budget allocation; and state budget arrangement priority by sector, major program, project and spending task of their localities;

c/ To direct provincial-level Finance Departments to assume the prime responsibility for, and coordinate with provincial-level Planning and Investment Departments, Tax Departments and Customs Departments, and other related local agencies in, formulating provincial-level three-year finance-state budget plans in accordance with Point a, Clause 5 of this Article and reporting to competent local authorities for comment before sending them to the Ministry of Finance and Ministry of Planning and Investment; to set and notify ceiling budget expenditures for their attached agencies and units and ceiling balancing transfers and targeted transfers from provincial-level budgets to lower-level budgets;

d/ To finalize provincial-level three-year finance-state budget plans and report them to provincial-level People’s Councils for reference during the discussion, consideration and approval of annual local budget estimates and allocation plans.

Article 18.Time for formulation of three-year finance-state budget plans

1. Before March 31 every year, ministries, agencies, units and localities shall make reports on assessment of three-year finance-state budget plans reported to competent authorities in the previous year and send them to finance and planning and investment agencies in accordance with Clause 1, Article 16 of this Decree.

2. Before May 15 every year, the Prime Minister shall issue a directive on formulation of three-year finance-state budget plans.

3. Before June 1 every year, on the basis of the Prime Minister’s directive on formulation of three-year finance-state budget plans, the Ministry of Finance shall:

a/ Promulgate a document guiding the formulation of three-year finance-state budget plans for the three planning years;

b/ Set and notify ceiling current expenditures of the state budget for ministries and central agencies; estimate and notify total state budget revenues in localities, total local budget balancing revenues, balancing transfers and targeted transfers from the central budget to local budgets, total local budget balancing expenditures and estimated expenditures for a number of major sectors of localities in the three planning years.

4. Before June 1 every year, on the basis of the Prime Minister’s directive on formulation of three-year finance-state budget plans, the Ministry of Planning and Investment shall:

a/ Issue a document guiding the formulation of state budget-funded investment plans in the three planning years;

b/ Set and notify ceiling state budget expenditures for development investment for ministries, central agencies and localities in the three planning years and concurrently send them to the Ministry of Finance for summarization.

5. Before June 15 every year, on the basis of the Prime Minister’s direction and guidelines of the Ministry of Finance and Ministry of Planning and Investment on formulation of three-year finance-state budget plans:

a/ Provincial-level People’s Committees shall guide the formulation of provincial-level three-year finance-state budget plans;

b/ Ministries and central agencies managing national target programs and target programs shall guide the formulation of three-year finance-state budget plans for programs under their management.

6. Before July 20 every year:

a/ Provincial-level People’s Committees shall send to the Ministry of Finance and the Ministry of Planning and Investment provincial-level three-year finance-state budget plans already finalized based on opinions of the standing bodies of provincial-level People’s Councils;

b/ Ministries and central agencies shall send their three-year finance-state budget plans to the Ministry of Finance and Ministry of Planning and Investment.

7. Before August 31 every year, the Ministry of Planning and Investment shall summarize and finalize the national three-year finance-state budget plan (for development investment expenditures) detailed by sector for each ministry and central agency and targeted transfers for each locality and send them to the Ministry of Finance for incorporation into the national three-year finance-state budget plan and submission to the Prime Minister.

8. Before September 20 every year, the Ministry of Finance shall assume the prime responsibility for, and coordinate with the Ministry of Planning and Investment in, reviewing the national three-year finance-state budget plan and submitting to the Government for reporting to the Standing Committee and related agencies of the National Assembly for opinion.

9. At least 20 days before the opening date of the year-end National Assembly session, the national three-year finance-state budget plan shall be sent to National Assembly deputies for reference during the discussion, consideration and approval of annual state budget estimates and allocation plan.

10. Provincial-level People’s Committees shall finalize provincial-level three-year finance-state budget plans and submit them to provincial-level People’s Councils for reference during the discussion, consideration and approval of annual local budget estimates and allocation plans.

Chapter IV

IMPLEMENTATION PROVISIONS

Article 19.Effect

This Decree takes effect on June 5, 2017, and applies from the 2017 budgetary year.

Article 20.Transitional provisions

For the formulation of 2018-2020 three-year finance-state budget plans, ministries, agencies, units and localities shall submit their 2018 state budget estimates to competent authorities for setting ceiling budget expenditures, basic expenditures and new expenditures for 2018 and 2 subsequent years.

Article 21.Implementation responsibility

1. The Minister of Finance and the Minister of Planning and Investment shall guide in detail 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