Laws of Vietnam

DECREE No. 51/1998/ND-CP OF JULY 18, 1998 AMENDING AND SUPPLEMENTING A NUMBER OF ARTICLES OF DECREE No. 87-CP OF DECEMBER 19, 1996 DETAILING THE ASSIGN-MENT OF RESPONSIBILITIES FOR MANAGING, DRAFTING, IMPLEMEN-TING AND SETTLING THE STATE BUDGET

THE GOVERNMENT

Pursuant to the Law on Organization of the Government of September 30, 1992;

Pursuant to Law No. 6/1998/QH10 of May 20, 1998 Amending and Supplementing a Number of Articles of the Law on the State Budget;

At the proposal of the Minister of Finance,

DECREES:

Article 1.- To amend and supplement a number of articles of Decree No. 87-CP as follows:

1. Article 3 is amended and supplemented as follows:

"Article 3.-

1. The State budget includes the central budget and the budgets of the local administration of various levels (local budgets).

The budgets of the local administration of various levels include:

a/ The budgets of the provinces and the cities directly under the Central Government (collectively referred to as the provincial-level budget);

b/ The budgets of the rural and urban districts, provincial capitals and cities (collectively referred to as the district-level budget);

c/ The budgets of the communes, wards and townships (collectively referred to as the commune-level budget)

2. The relationship between the budgets of various levels shall adhere to the following principles:

a/ Additional allocations from the higher-level budget to the lower-budget shall be made to ensure the fairness and balanced development among regions and localities. These additional allocations shall constitute a revenue of the lower-level budget;

b/ In cases where the higher-level State management agency authorizes the lower-level State management agency to perform a spending task that comes under the former's function, funds must be transferred from the higher-level budget to the lower-level budget for performing such task;

c/ Besides the making of additional allocations to the revenue source and the authorized performance of spending tasks defined in Points a and b, Clause 2 of this Article, the budget of one level shall not be used to cover the spending task of another level, except for the following cases where the People's Committees of various levels shall be allowed to use the budget within the scope of their assigned responsibility to support units which are managed by the higher level and located in their respective territories:

- When a natural calamity occurs or in other circumstances where the locality needs to urgently mobilize forces to stabilize the socio-economic situation.

- The units under the management of the higher level perform their functions in combination with a number of tasks at the request of the locality."

2. Article 15 is amended and supplemented as follows:

"Article 15.- The revenues of the central budget shall include:

1. The revenues to be 100% remitted into the central budget:

a/ Value-added tax on imports;

b/ Import tax, export tax;

c/ Special consumption tax, excluding the special consumption tax on such home-made goods as playing cards, votive papers and objects and on services dealing in dancing halls, massage parlors or karaoke bars; golf business with the sale of membership cards and golf playing tickets, casino business; jackpot games; horse race or car race betting ticket business;

d/ Enterprise income tax paid by units under the whole-branch cost-accounting system;

e/ Other taxes and revenues from the oil and gas exploration and exploitation (including land and water surface rents) under the management of the Central Government;

f/ Income from the State-contributed capital, State capital recovered from economic establishments, recovered State loans (including principals and interests), revenues from the State reserve fund, revenues from the central financial reserve fund in special cases;

g/ Government's borrowings; non-refundable aid donated by foreign governments, organizations and individuals to the Government in accordance with the provisions of law;

h/ Assorted fees and charges paid to the central budget: entry and exit visa fees, fees for flights across the air space of Vietnam, traffic fees and other fees and charges stipulated by the Government;

i/ Revenues from non-business activities of units managed by the central agencies;

j/ The central budget remainder from the previous year;

k/ Other revenues prescribed by law.

2. Revenues divided in percentage (%) between the central budget and the provincial-level budget:

a/ Value-added tax, excluding the value-added tax prescribed in Point a, Clause 1 of this Article, and value-added tax collected from lottery activities;

b/ Enterprise income tax, excluding the enterprise income tax prescribed in Point d, Clause 1 of this Article, and the enterprise income tax collected from lottery activities;

c/ Income tax paid by high-income earners;

d/ Tax on the remittance of incomes abroad by foreign organizations and individuals investing in Vietnam;

e/ Tax on the use of budgetary capital by State enterprises, excluding the tax on the use of the budgetary capital in lottery activities."

3. Article 16 is amended and supplemented as follows:

"Article 16.- The spending tasks of the central budget shall include;

1. Regular spending on:

a/ Non-business activities in the fields of education, training, health, social affairs, culture, information, physical training and sports, science, technology and environment, and in other fields managed by the central agencies:

- General education boarding schools for ethnic minorities;

- Post-graduate, university and college, intermediate professional and vocational training and other forms of training and fostering;

- Disease prevention, treatment and other non-business medical activities;

- Reformatory institutions, prevention and fight against social vices and other social activities;

- Preservation of cultural relics, museums, libraries, rehabilitation of historical relics, art performances and other cultural activities;

- Radio and television broadcast and other information activities;

- Fostering and training of coaches and athletes for national teams; national and international competitions; management of physical training and sports competition centers and other physical training and sport activities;

- Scientific and technological research;

- Environmental activities;

- Other non-business activities.

b/ Non-business economic activities managed by the central agencies:

- Non-business communications activities: maintenance and repair of roads, bridges, and other traffic works, installing road signs and working out measures to ensure traffic safety;

- Non-business agricultural, irrigation, fishery and forestry activities: maintenance and repair of dikes, irrigation projects, agricultural, fishery and forestry farms and stations; forestry, agricultural and fishery promotion activities; forest zoning for afforestation, forest protection, forest fire prevention and combat, and aquatic resource protection;

- Conducting basic surveys;

- Measuring administrative boundaries of various levels;

- Topographic activities;

- Measuring national boundaries and installing border markers;

- Measuring, mapping and filing cadastral dossiers;

- Sedentarization and building new economic zones;

- Other non-business economic activities.

c/ Defense, security and social order and safety:

- Defense:

+ Ensuring the cultural and material life and working out policies for the entire army;

+ Training and scientific research;

+ Purchase of weapons and military equipment and facilities for the whole army, including local armies;

+ Preparing percussion caps, explosives and fuses for the production of mines and grenades so as to equip the militia, self-defense as well as the reserve forces therewith;

+ Preparing industrial mobilization, including preparing design documents, technologies, technical implementation guidelines, preparing special-use instruments and various kinds of equipment exclusively for defense purpose;

+ Long military exercises (more than five days) of mobilized reserve units of the regular army;

+ Transferring units of militia, self-defense force and/or reserve military personnel from one province to another;

+ Building new and repairing special military projects, combat works, working offices, garrisons and depots of the military offices of the district level upward;

- Social security, order and safety:

+ Ensuring the material and cultural life as well as social policies for the people's police force;

+ Training and scientific research;

+ Procurement of equipment, weapons and specialized facilities for the people's police force;

+ Management and education of convicts; management and education in re-educational establishments and reformatories;

+ Fire prevention and fight;

+ Building new and repairing special constructions, barracks, working offices and storehouses of the people's police force; repairing detention camps and reformatories of the district level upward; repairing houses in re-educational establishments and reformatories.

d/ Activities of the National Assembly, the President of the State, the ministries, the ministerial-level agencies, agencies attached to the Government, the system of People's Courts and People's Procuracies;

e/ Activities of the central bodies of the Communist Party of Vietnam;

f/ Activities of the central bodies of the Vietnam Fatherland Front, the Ho Chi Minh Communist Youth Union, the Vietnam War Veterans' Association, the Vietnam Women's Union, the Vietnam Peasants' Association; operations of the Vietnam General Confederation of Labor;

g/ Price subsidies in accordance with the State policies;

h/ Centrally-managed national programs;

i/ Support for the social insurance fund as stipulated by the Government;

j/ Implementing the policies toward the war invalids, sick armymen, the relatives of fallen heroes, families with meritorious services to the country and other beneficiaries of social policies;

k/ Financial support for social and socio-professional organizations at the central level in accordance with the provisions of law;

l/ Payments of interests on the Government's borrowings;

m/ Aid;

n/ Other expenditures as prescribed by law.

2. Spending on development investment:

a/ Investment in the construction of centrally-managed socio-economic infrastructure projects without possibility of capital recovery;

b/ Investment in and capital support for State enterprises; contribution of stock and joint-venture capital to enterprises in the areas where the State's participation is needed as provided for by law.

c/ Spending on the National Investment Support Fund and development support funds for economic development programs and projects;

d/ The State reserve;

e/ The Government's loans for investment development.

3. Payments of principals for the Government's borrowings.

4. Additional allocations to the financial reserve fund.

5. Additional allocations to the provincial-level budgets."

4. Article 17 is amended and supplemented as follows:

"Article 17.- The revenues of the provincial budget shall include:

1. The revenues to be 100% remitted into the provincial-level budget:

a/ Land and water surface rents paid by enterprises, including foreign invested enterprises, excluding the land and water surface rents from the oil and gas exploration and exploitation activities managed by the Central Government;

b/ Revenues from the lease and sale of State-owned dwelling houses;

c/ Registration fees collected on the district's territory, excluding house and land registration fees;

d/ Revenues from lottery activities;

e/ Non refundable aid, in cash or in kind, donated by organizations and individuals in foreign countries directly to the provincial level in accordance with the provisions of law;

f/ Assorted fees and charges remitted into the provincial-level budget as stipulated by the Government;

g/ Money mobilized from organizations and individuals for investment in the construction of infrastructure projects as stipulated by the Government;

h/ Voluntary contributions by organizations and individuals inside and outside the country to the provincial-level budget;

i/ Revenues from the provincial financial reserve fund in special cases;

j/ Non-business revenues of units managed by the provincial level;

k/ Revenues from the investment loans in accordance with the provisions of Clause 3, Article 8 of the Law on the State Budget;

l/ The provincial-level budget remainder from the previous year;

m/ Other revenues in accordance with the provisions of law;

n/ Additional allocations from the central budget.

2. Revenues divided in percentage (%) between the central budget and the provincial budget under Clause 2, Article 15 of Decree No. 87-CP of December 19, 1996 already amended and supplemented by this Decree.

3. Revenues divided in percentage (%) between the provincial budget, the district budget and the commune/township budget:

a/ Tax on the transfer of the land-use right;

b/ House and land tax;

c/ Land use levy.

4. Revenues divided in percentage (%) between the provincial-level budget, the district-level budget and the commune or township budget:

a/ Revenues stipulated in Clause 2 of this Article shall be decided by the provincial level within the scope assigned to the province;

b/ Such revenues as tax on the use of agricultural land; natural resource tax; house and land registration fees; special consumption tax on such home-made goods as playing cards, votive papers and objects as well as services dealing in dancing halls, massage parlors, karaoke bars, golf business with the sale of membership cards and golf playing tickets; casino business; jackpot games; horse race and car race betting ticket business shall be 100% channeled into the local budgets; the division of these revenues to the budgets of various levels (of the provinces; districts, communes, townships and wards) shall be decided by the provincial level. Particularly for the agricultural land use tax, this tax may be distributed to the communes, townships and wards at the maximum level of 100% and the minimum level of 20%.

5. The division of revenue sources stipulated in Clause 4 of this Article shall be decided by the provincial-level People's Councils within the scope of their assigned responsibility. Balance must be ensured between the divided revenues and the spending tasks assigned to each level; importance must be attached to the optimum exploitation of on-the-spot revenue sources so as to perform the assigned spending tasks; the administration of various levels are encouraged to tap revenue sources and enhance their revenue management in a way suitable to the conditions and characteristics of each area and in close association with the managerial role of the local administration of each level; the division of small revenue sources to many levels and additional allocations from the higher-level budget should be limited."

5. Article 18 is amended and supplemented as follows:

"Article 18.- The spending tasks of the provincial budget shall include:

1. Regular spending on:

a/ Non-business activities in the fields of education, training, health, social affairs, culture, information, physical training and sports, science, technology and environment, and other non-business activities managed by the provincial-level agencies:

- General education, complementary education, crèche, kindergarten education and general education boarding schools for ethnic minorities and other educational activities;

- In-service university and college education, intermediate professional training, vocational training, short-term training and other forms of training and fostering;

- Disease prevention, treatment and other medical activities;

- Reformatories, social relief, famine relief, prevention and fight against social vices and other social activities;

- Preservation of cultural relics, museums, libraries, art performances and other cultural activities;

- Radio and television broadcasts and other communication activities;

- Fostering and training of coaches and athletes for provincial teams; provincial competitions; management of physical training and sports facilities and other physical training and sport activities;

- Scientific research and application of technical advances, other non-business scientific and technological activities;

- Environmental activities;

- Other non-business activities.

b/ Non-business economic activities managed by the provincial-level agencies:

- Non-business communications activities: maintaining and repairing roads, bridges, and other traffic works, installing road signs and working out measures to ensure traffic safety;

- Non-business agricultural, irrigation, fishery and forestry activities: maintenance and repair of dikes, irrigation projects, agricultural, fishery and forestry farms and stations; the forestry, agricultural and fishery promotion work; forest zoning for afforestation, forest protection, forest fire prevention and combat, protection of aquatic resources;

- Urban administrative work (in the cities directly under the Central Government, except for the area assigned to the provincial capitals): maintenance of the lighting system, pavements, water supply and drainage system, urban traffic, parks and other urban administrative activities;

- Measuring, mapping and filing cadastral documents;

- Conducting basic surveys;

- Other non-business economic activities.

c/ Defense, security and social order and safety, including:

- Defense:

+ Training militia and self-defense force;

+ Organizing conferences, military training and work reviews;

+ Operations of self-defense force units that perform on a rotary basis full-time combat duty or combat readiness in the key border and coastal areas in a number of cases under the direction of the Ministry of Defense;

+ Drawing up the regional defense plan;

+ Transporting weapons, military equipment and supplies for the militia and self-defense and reserve forces;

+ Organizing receptions of returning armymen who have fulfilled their military service.

- Social security, order and safety:

+ Supporting the campaigns to prevent and control crimes;

+ Supporting the campaigns to maintain security and social order and safety;

+ Supporting the work on fire prevention and fight;

+ Supporting the repair of houses for temporary detention and custody;

+ Supporting the reviews of mass movements for national security maintenance.

d/ Operations of the State agencies of provincial level;

e/ Operations of the provincial agencies of the Communist Party of Vietnam;

f/ Operations of the provincial agencies of the Vietnam Fatherland Front, the Ho Chi Minh Communist Youth Union, the Vietnam War Veterans' Association, the Vietnam Women's Union, the Vietnam Peasants' Association;

g/ Financial support for social and socio-professional organizations of provincial level in accordance with the provisions of law;

h/ Implementing the social policies managed by the provincial level;

i/ The national programs assigned by the Government to the provincial administration for management;

j/ Price subsidies in accordance with the State policies;

k/ Payments of interests on investment loans in accordance with Clause 3, Article 8 of the Law on the State Budget;

l/ Other expenditures as prescribed by law.

2. Spending on development investment:

a/ Investment in the construction of provincially managed socio-economic infrastructure projects;

b/ Investment in and capital support for State enterprises in accordance with the provisions of law.

3. Payments of the principals of investment loans in accordance with the provisions of Clause 3, Article 8 of the Law on the State Budget.

4. Additional allocations to the financial reserve fund.

5. Additional allocations to the lower-level budgets."

6. Article 19 is amended and supplemented as follows:

"Article 19.- The revenues of the district-level budget shall include:

1. The revenue to be 100% remitted into the district-level budget

a/ Trade-license tax, excluding the trade-license tax paid by small business households located in the commune/township territory;

b/ The animal slaughtering tax paid by slaughtering enterprises located in the ward territory;

c/ Assorted fees and charges collected from the activities of agencies managed by the district level;

d/ Proceeds from the non-business activities of units managed by the district level;

e/ Non-refundable aid, in cash or in kind, granted by organizations and individuals in foreign countries directly to the district level in accordance with the provisions of law;

f/ Contributions by organizations and individuals for investment in the construction of infrastructure projects as stipulated by the Government;

g/ Voluntary contributions by organizations and individuals inside and outside the country to the district budget;

h/ The district-level budget remainder from the previous year;

i/ Additional allocations from the provincial-level budget.

j/ Other revenues prescribed by law;

2. Revenues divided in percentage (%) between the provincial-level budget, the district-level budget and the commune, township or ward budget stipulated in Clauses 3 and 4, Article 17 of Decree No. 87-CP of December 19, 1996 already amended and supplemented by this Decree:

3. In addition to the revenues stipulated in Clauses 1 and 2 of this Article, the provincial capitals and towns shall be also distributed, in percentage (%), part of the revenue from registration fees, excluding house and land registration fees arising in their territory, and shall be allowed to set up an investment fund in accordance with the Government's stipulations."

7. Article 20 is amended and supplemented as follows:

"Article 20.- The spending tasks of the district-level budget shall include;

1. Regular spending on:

a/ Non-business activities in the fields of education, training and health according to the assignment by the provincial level. The assignment to the district level shall be based on its managerial level and capability and the revenue sources within the territory and at the same time ensure the fulfillment of the province's overall plan on the development of education, training and health;

b/ Non-business activities in the fields of culture, information, physical training and sports, social affairs and other non-business activities managed by the district level;

c/ Non-business economic activities managed by the district agencies:

- Agriculture, fishery, forestry and irrigation;

- Communications;

- Urban administrative work (applied to the budgets of the provincial capitals and towns): maintenance of the lighting system, pavements, water supply and drainage system, urban traffic, parks and other urban administrative activities;

- Other non-business economic activities.

d/ Defense, security and social order and safety, including:

- Defense:

+ Education on the entire people's defense;

+ The recruitment for the army and reception of returning armymen who have fulfilled their military service;

+ Registration of the reserves;

+ Organization of training for leading members of the militia and self-defense forces;

+ Meetings and military training for the militia and self-defense force.

- Social security, order and safety:

+ Propagandizing for mass movements to maintain security;

+ Supporting campaigns to maintain security and social order and safety;

+ Supporting the reviews of mass movements for national security maintenance;

+ Supporting activities for local security and order.

e/ The operations of the State agencies of the district level;

f/ The operations of the district-level agencies of the Communist Party of Vietnam;

g/ The operations of the district-level agencies of the Vietnam Fatherland Front, the Ho Chi Minh Communist Youth Union, the Vietnam War Veterans' Association, the Vietnam Women's Union, the Vietnam Peasants' Association;

h/ Financial support for social and socio-professional organizations of the district level in accordance with the provisions of law;

i/ Other expenditures as prescribed by law.

2. Spending on development investment: Expenditures on the investment in the construction of socio-economic infrastructure projects according to the assignment by the provincial level. The provincial capitals and towns must be assigned the task of spending on the construction of public general education schools of various levels and public facilities, the lighting system, water supply and drainage system, urban traffic, traffic safety and urban sanitation.

3. Additional allocations to the lower-level budget."

8. Article 21 is amended and supplemented as follows:

"Article 21.- The revenues of the commune/township budget shall include:

1. The revenues to be 100% remitted into the commune/township budget:

a/ Trade-license tax paid by small business households;

b/ Animal-slaughtering tax;

c/ Assorted fees, charges and contributions to the commune/township budget in accordance with the provisions of law;

d/ Proceeds from the use of the public land fund and yields from other public property;

e/ Revenues from the non-business activities managed by the commune or township;

f/ Voluntary contributions to the commune or township;

g/ Non-refundable aid granted by organizations and individuals in foreign countries directly to the commune or township in accordance with the provisions of law;

h/ The commune/township budget remainder from the previous year;

i/ Additional allocations from the higher-level budget.

j/ Other revenues prescribed by law;

2. The revenues divided in percentage (%) between the provincial-level budget, the district-level budget and the commune/township budget as stipulated in Clauses 3 and 4, Article 17 of Decree No. 87-CP of December 19, 1996 already amended and supplemented by this Decree.":

9. Article 22 is amended and supplemented as follows:

"Article 22.- The spending tasks of the commune/township budget shall include;

1. Regular spending on:

a/ Social work and cultural, information, physical training and sports activities managed by the commune or township:

b/ Financial support for complementary education, crèche and kindergarten education managed by the commune or township:

c/ Medical activities in the commune or township;

d/ Management and maintenance of architectural works, assets, welfare works and transport routes managed by the commune or township;

e/ Operations of the State agencies of the commune or township;

f/ Operations of the agencies of the Communist Party of Vietnam, the Vietnam Fatherland Front, the Ho Chi Minh Communist Youth Union, the Vietnam War Veterans' Association, the Vietnam Women's Union, the Vietnam Peasants' Association of the commune or township;

g/ The operations of militia and self-defense force and the social order and safety work:

- Training the militia and self-defense force;

- Registering military services, organizing send-offs for young people to perform their military service duty;

- Mobilizing and educating the masses to maintain security, social order and safety;

- Activities for local security and order.

h/ Other expenditures prescribed by law.

2. Spending on development investment:

The investment in constructing socio-economic infrastructure projects shall comply with the assignment by the provincial administration."

10. Article 24 is amended and supplemented as follows:

"Article 24.- The revenues of the ward budget shall include:

1. The revenues to be 100% remitted into the ward budget:

a/ Fees, charges and contributions to the ward budget as prescribed by law;

b/ The animal-slaughtering tax, excluding the slaughtering tax paid by animal-slaughtering enterprises;

c/ Voluntary contributions by organizations and individuals to the ward;

d/ Non refundable aid granted by organizations and individuals in foreign countries directly to the ward in accordance with the provisions of law;

e/ The ward budget remainder from the previous year;

f/ Additional allocations from the higher-level budget.

g/ Other revenues as prescribed by law;

2. The revenues divided in percentage between the provincial-level budget, the district-level budget and the ward budget as stipulated in Clause 4, Article 17 of Decree No. 87-CP of December 19, 1996 already amended and supplemented by this Decree."

11. Article 28 is amended and supplemented as follows:

"Article 28.-

1. The Government shall specify the percentages (%) for the division of revenues between the central budget and the budget of each province or city directly under the Central Government; which shall apply to all divisible revenues.

2. Basing themselves on the percentage (%) stipulated by the Government for each province or city directly under the Central Government, the provincial-level People's Committees shall specify the percentages (%) for the division of the revenues between the provincial budget and the budget of each rural or urban district, provincial capital or city and the budget of each commune, township or ward. The determination of the percentages (%) for the division of the revenues defined in Clause 2, Article 28 of the Law on the State Budget already amended and supplemented under the Law Amending and Supplementing a Number of Articles of the Law on the State Budget, between the budgets of the local administration of various levels must ensure that such percentages shall not exceed the percentage stipulated by the Government for each province or city directly under the Central Government."

12. Article 29 is amended and supplemented as follows:

"Article 29.- The Government shall submit to the Standing Committee of the National Assembly for decision the plan on additional allocations from the central budget to the budget of each province or city directly under the Central Government. The provincial-level People's Committee shall submit to the People's Council for decision the plan on additional allocations from the provincial-level budget to the budget of each district and stipulate the additional allocations to the commune budget.

Annually, in case of price inflation, the Government shall base itself on the additional allocations already decided by the National Assembly Standing Committee and the economic growth rate to decide to increase the additional allocations to the lower-level budget proportionate partly to the inflation rate and partly to the economic growth rate.

The Minister of Finance shall stipulate the method for calculating the additional allocations from the higher-level budget to the lower-level budget in accordance with Article 40 of the Law on the State Budget already amended and supplemented by the Law Amending and Supplementing a Number of Articles of the Law on the State Budget."

13. Article 34 is amended and supplemented as follows:

"Article 34.-

1. The provincial Customs Departments shall draw up plans on the collection of import and export taxes, special consumption tax and value-added tax on imports as well as other import-export related revenues under their management and send them to the General Department of Customs, the provincial People's Committees and the provincial Finance and Pricing Departments.

The General Department of Customs shall coordinate with the Ministry of Finance, the Ministry of Planning and Investment and the Ministry of Trade in making the estimate of revenues from import and export taxes, the special consumption tax and value-added tax on imports and other import-export related revenues for the whole country and send it to the Ministry of Finance and the Ministry of Planning and Investment for inclusion in the draft State budget and submission to the Government.

2. The local tax offices shall draw up estimates of State budget revenues in the territories, project the value-added tax amount to be reimbursed to the enterprises located in the territories under their management and send them to the higher-level tax office, the People's Committee, the finance agency and the planning and investment agency of the same level."

14. Article 36 is amended and supplemented as follows:

"Article 36.- Drafting the State budget:

1. Drafting the commune budget: The commune Finance Board shall make a draft of the commune's budget revenues and expenditures and submit it to the commune People's Committee for further report to the chairman and vice-chairmen of the commune People's Council, who shall consider then report it to the district People's Committee, and concurrently to the district Finance Section.

2. Drafting the district budget: The district Finance Section shall consider the draft budgets of the units attached to the district, the revenues estimates made by the tax office and the draft budget revenues and expenditures of the communes; make a draft of State budget revenues on the territory and the district budget revenues and expenditures (including the draft budgets of the communes and the district draft budget) and a draft on authorized funding (if any), submit them to the district People's Committee which shall then report them to the Standing Board of the district People's Council for consideration before reporting them to the provincial People's Committee and the provincial Finance and Pricing Department and also to the provincial Planning and Investment Department (for the draft budget according to each field, the draft expenditures for national programs and the draft expenditure on capital construction investment); the provincial Department managing the branch or field (for the draft expenditures for the branch or field managed by such Department) and the provincial agency managing the national programs (for the draft expenditures for national programs).

3. Drafting the provincial budget: The provincial Finance and Pricing Department shall consider the draft budgets of the units attached to the province, the revenue estimates made by the tax office or the customs office (if any) and the draft budget revenues and expenditures of the districts; make drafts of the State budget revenues in the locality, of the provincial budget revenues and expenditures (including the draft budgets of districts and the province) and of the authorized funding; then submit them to the provincial People's Committee which shall then report them to the Standing Board of the provincial People's Council for consideration before reporting them to the Government and also to the Ministry of Finance and the Ministry of Planning and Investment (for the draft budget according to each field, draft expenditures for national programs and the draft expenditures on construction investment), the ministry managing the branch or field (for the draft expenditures for the branch or field managed by the ministry) and the central agencies managing national programs (for the draft expenditures for national programs) on August 15 of the preceding year at the latest.

4. Drafting the State budget and the central budget:

The Ministry of Finance shall assume the prime responsibility and coordinate with the Ministry of Planning and Investment and other ministries, on the basis of the budget revenues and expenditures drafted by the ministries, central State agencies and provinces, the draft expenditures for the branches and fields and the national programs which are prepared by the ministries and the agencies managing the national programs, the debt repayment demand and the borrowing possibility, in drafting the central budget revenues and expenditures, synthesizing and drafting the State budget revenues and expenditures and submit them to the Government for submission to the National Assembly for decision."

15. Article 37 is amended and supplemented as follows:

"Article 37.- Tasks and powers of the People's Committees of various levels and the State agencies in the process of drafting, synthesizing and allocating the budget:

1. The People's Committee:

a/ To guide, organize and direct its attached units and the lower-level People's Committees in drafting the budget revenues and expenditures within the scope of its management; coordinate with and direct the tax office and the customs office (if any) in the locality in drafting the State budget revenues in its locality, estimate the value-added tax amount to be reimbursed to the enterprises in its territory;

b/ To draft the State budget revenues in its territory and the local budget revenues and expenditures; report the local draft budget to the Standing Board of the People's Council or the chairman and vice-chairmen of the People's Council for consideration before reporting them to the higher-level administrative State agency;

c/ After the draft State budget is decided by the National Assembly, on the basis of the budget collection and spending tasks assigned by the higher level, to submit the local draft budget and its distribution plan to the People's Council of the same level for decision, report to the administrative State agency and the finance agency of the immediate higher level the local draft budget and the result of the distribution of such budget which has been decided by the People's Council of the same level;

d/ On the basis of the resolution of the People's Council of the same level to assign the budget collection and spending tasks to each of its attached agencies and units and the budget collection and spending tasks and additional allocations to the lower-level budget(s);

e/ To make a plan on the adjustment of the local draft budget and a plan on the distribution of its own draft budget revenues and expenditures and submit them to the People's Council of the same level for decision at the request of the higher-level administrative State agency in cases where the resolution of the People's Council of the same level fails to comply with the collection and spending tasks assigned by the higher level;

f/ To examine the resolution(s) of the lower-level People's Council(s) on the draft budget(s); request, when necessary, the lower-level People's Council(s) to adjust their draft budget.

2. The finance agencies of various levels:

a/ To hold working sessions on the draft budget(s) with the lower-level People's Committees and the concerned agencies and units; to be entitled to request the revision of revenue and expenditure items which do not comply with the prescribed regime and criteria and which are not rational, economical and suitable to the budget capability and the socio-economic development orientation.

During the process of deliberation to sum up and draft the budget, if there is a divergence of opinions between the finance agency, other agencies of the same level and the lower-level administration, the local finance agency of any level must report the matter to the People's Committee of the same level for decision; the Ministry of Finance shall report the matter to the Prime Minister for decision;

b/ To assume the prime responsibility and coordinate with the planning and investment agency of the same level in summing up and drafting a budget for each field;

c/ To assume the prime responsibility and coordinate with the concerned agencies and units in summing up, drafting the budgets as well as drawing up the plan for allocating the draft budget of its own level

d/ To coordinate with the planning and investment agency of the same level in drafting and allocating the draft expenditures on capital construction, focusing on specific units, projects or constructions;

e/ To coordinate with the agencies managing the national programs in drawing up the plan for allocating the draft expenditures;

f/ To propose plans to balance the budget and measures to materialize the policy of increasing budget revenues and saving budget expenditures.

g/ The Ministry of Finance shall coordinate with the State Bank of Vietnam in elaborating the plan for borrowing loans to cover the State budget overspending, and in estimating the level and time for making advance payments from the State Bank to make up for temporary deficits of the central budget in the year.

h/ The Ministry of Finance shall consider the resolutions of the provincial People's Councils on the draft budgets and propose to the Prime Minister to request the provincial People's Councils to adjust the draft budgets in case of necessity. The local finance agencies of various levels shall consider the resolution(s) of the lower-level People's Council(s) on the draft budget and propose to the People's Committee of the same level to request the lower-level People's Council(s) to adjust the draft budget when necessary.

3. The planning and investment agencies of various levels:

a/ The Ministry of Planning and Investment shall submit to the Government the national socio-economic development plan and the major balances of the national economy, including the financial, monetary and capital construction fund balances, which shall serve as the basis for the formulation of the financial and budgetary plans; submit to the Government for submission to the National Assembly a list of the national programs and projects, key and important construction projects financed by the State budget.

b/ The Ministry of Planning and Investment and the local planning and investment agencies shall assume the prime responsibility and coordinate with the finance agencies of the same level in drafting and allocating the expenditures for investment in capital construction focusing on each unit, each project and construction, then send them to the finance agency of the same level as a basis for summing up and drafting the budget and its allocation plan to be submitted to the competent level for consideration and decision before allocating it to the various units.

c/ To coordinate with the finance agency of the same level in summing up and drafting a budget for each field;

d/ To coordinate with the agencies managing the national programs in drawing up the plan on the allocation of draft expenditures to the national programs.

4. The central and local State agencies:

a/ The ministries and branches shall coordinate with the Ministry of Finance in formulating the regime, criteria and norms of State budget expenditures by their respective branches and fields.

b/ Each central or local State agency shall organize the drafting of budget revenues and expenditures under the scope of its management, draft the revenues and expenditures for the branch or field under its charge and send them to the finance agency and the planning and investment agency of the same level (for the draft budget for each field, the draft expenditures for the national programs and the draft expenditures for capital construction investment), the agency managing the national programs of the same level (for the draft expenditures for national programs) and the higher-level agency managing each field or branch (for the draft budget for each field); coordinate with the finance agency and the planning and investment agency of the same level and the lower-level People's Committee in drafting and allocating the budget for each field or branch;

c/ The agencies managing the national programs shall coordinate with the finance agency and the planning and investment agency of the same level in drafting the expenditures for the national programs and the plan on their allocation to various units and localities and send them to the finance agency and the planning and investment agency of the same level for including them into the draft budget to be submitted together with its allocation plan to the competent level for decision and allocation to the concerned units."

16. Article 38 is amended and supplemented as follows:

" Article 38.- Deciding, allocating and assigning the draft State budget:

1. After the draft State budget is decided by the National Assembly:

a/ The Government shall make a plan on the allocation of the central draft budget to each ministry and each branch and the level of additional allocation from the central budget to each province and submit them to the National Assembly Standing Committee for decision;

b/ The Prime Minister shall base himself on the resolution of the National Assembly and the resolution of the National Assembly Standing Committee to decide to assign budget collection and spending tasks to each ministry and each branch, the collection and spending tasks and the level of additional allocation from the central budget to each province;

c/ The Ministry of Finance shall provide detailed guidance on budget collection and spending tasks for the central agencies, provincial People's Committees and State enterprises.

2. After receiving the Prime Minister's decisions to assign budget collection and spending tasks, the provincial People's Committees shall submit to the provincial People's Councils for decision their respective provincial draft budgets and allocation plans; report to the Government and the Ministry of Finance on the provincial draft budgets and the results of the allocation of the provincial draft budgets already decided by the provincial People's Council.

The provincial People's Committees shall base themselves on the resolution of the provincial People's Councils to decide to assign budget collection and spending tasks to each of their attached agencies and units; the collection and spending tasks and the level of additional allocation to each district.

3. After receiving the provincial People's Committee's decision to assign budget collection and spending tasks, the district People's Committees shall submit to the district People's Councils for decision their respective district draft budgets and allocation plans; report to the provincial People's Committee and the provincial Finance and Pricing Department the district draft budgets and the results of the allocation of the district draft budgets already decided by the district People's Councils.

The district People's Committees shall base themselves on the resolution of the district People's Councils to decide to assign budget collection and spending tasks to each of their attached agencies and units; the collection and spending tasks and the level of additional allocation to each commune.

4. After receiving the district People's Committee's decision to assign budget collection and spending tasks, the commune People's Committees shall submit to the commune People's Council for decision their respective commune draft budgets and allocation plans; report to the district People's Committee and the district Finance Section their commune draft budgets and the results of the allocation of the commune draft budgets already decided by the commune People's Councils.".

17. Article 54 is amended and supplemented as follows:

"Article 54.- At the end of the budget year, for the provinces which have collected more than their assigned tasks from import and export taxes and the special consumption tax (excluding the special consumption tax on such home-made goods as votive papers and objects, and services dealing in dancing halls, massage, karaoke; golf business with the sale of membership cards and golf playing tickets, casino business; jackpot games and the horse race and car race betting ticket business, the Government shall decide deduct in percentage (%) part of the excess revenue as reward to the provincial budget for investment in the construction of infrastructure projects and report it to the Standing Committee of the National Assembly. The use of specific amount of reward money for each project, the consideration of rewards for the provincial, district and commune budgets shall be decided by the provincial People's Committee and reported to the provincial People's Council."

18. Article 56 is amended and supplemented as follows:

"Article 56.- The financial reserve funds:

1. The sources for the formation of financial reserve funds:

a/ The central financial reserve fund shall be formed from the following sources:

- Part of the central budget revenue in excess of the estimate. The concrete level shall be decided by the Prime Minister;

- Fifty percent (50%) of the central budget remainder;

- The amount included in the annual draft expen-diture of the central budget. The concrete level shall be submitted by the Government to the National Assembly for decision.

b/ The provincial financial reserve fund shall be formed from the following sources:

- Part of the provincial budget revenue in excess of the estimate. The concrete level shall be decided by the president of the provincial People's Committee;

- Fifty per cent (50%) of the provincial budget remainder;

- The amount included in the annual draft expenditure of the provincial budget. The concrete amount shall be submitted by the president of the provincial People's Committee to the People's Council for decision.

2. Management and use of the financial reserve funds:

a/ The financial reserve funds shall be managed at the State Treasury which shall pay the interest on the deposits of the financial reserve funds, to be paid by the State Bank to the State Treasury and such interest shall be added to the fund;

b/ The central financial reserve fund shall have the Minister of Finance as its account holder; the provincial financial reserve fund shall have the president of the provincial People's Committee as its account holder;

c/ Deductions for the setting up of the financial reserve funds shall be gradually made year by year; the maximum deduction level is 25 per cent of the annual draft budget expenditure of the corresponding level.

d/ The financial reserve funds shall be used to meet the spending needs only when the revenue sources are not yet gathered while repayment must be made within the budget year, except for special cases defined in Point f, Clause 2 of this Article.

e/ The provincial budget may borrow from the central financial reserve fund if all the provincial reserve fund has been used up. The district and commune budgets may borrow from the provincial financial reserve fund;

f/ In cases where the budget revenues collected or borrowed to cover the overspending fail to meet the approved draft or where a natural calamity or enemy sabotage occurs and even after the budget has been adjusted and the reserve fund has been used up there are still not enough sources to meet the spending tasks:

- The Prime Minister shall decide to use the central financial reserve fund to balance the budget.

- The presidents of the provincial People's Committees shall decide to use the provincial financial reserve funds to balance the budgets and report it to the People's Councils of the same level and the Ministry of Finance."

19. Article 62 is amended and supplemented as follows:

"Article 62.- Upon the expiry of an accounting period (monthly, quarterly or yearly) the accounting units must close the accounting books. The closing of the budget accounting books at the end of the year must ensure the following requirements:

1. All revenues of the preceding years' budgets which are remitted in the current year shall be accounted and settled in the current year's budget revenues.

2. All expenditures of the current year's draft budget which have not yet been spent shall not be carried forward to the following year for further allocation. In special cases where they can be further allocated if it is so decided by the Minister of Finance (for the central budget) or the president of the People's Committee (for the budget of the local administration of same level), their accounting and settlement shall be effected as follows:

- If it is decided to be included in the preceding year's budget expenditures, they shall be settled by the preceding year's budget remainder and be accounted into the preceding year's budget expenditures (during the time when the final accounts are revised);

- If it is decided to be included in the subsequent year's budget expenditures, they shall be included in the draft expenditures of the subsequent year's budget.

3. The debts, borrowings and advance payments of the budget drafting agencies and of the budgets of the administration of various levels must be settled before the closing of the accounting books at the end of the year; in special cases, if permitted by the competent agency, the debts, borrowings and advance payments of the current year's budget shall be made into the debts, borrowings and advance payments of the following year's budget.

4. The temporarily collected or withheld amounts must be concretely considered and dealt with as follows:

- To return them to the subjects having such temporarily collected or withheld amounts or pay them into the State budget, depending on each specific case to be decided by the competent level.

- Pending a decision to deal with them, the temporarily collected or withheld amounts shall be transferred into the account for the temporarily withheld amounts under the guidance of the competent levels.

5. The unsold materials and goods and the cash left-over in the funds of the budget drafting units by the end of December 31 must be inventoried in accordance with current regulations and shall be dealt with as follows:

- The unsaleable goods and materials of a unit shall be settled in the preceding year's budget expenditures, if they are to be used in the following year their use must be closely overseen by the unit and separate reports shall be made thereon; if they cannot be used in the following year, the unit shall set up a liquidation board to sell them and the proceeds therefrom shall be paid to the State budget.

- The left-over of the cash fund of a unit by December 31 belonging to the State budget funds, minus the amounts to be paid according to the prescribed regime, shall be remitted to the State budget.

6. For the balance of the authorized fund (of a budget level) by the end of December 31, the State Treasury agency of the same level shall complete the procedure for returning it to the higher-level budget and report it to the finance agency of the same level. The higher-level State Treasury agency shall receive the returned amount of the authorized fund from the lower-level budget, record it as a reduction in the allocation from the higher-level budget and report it to the finance agency of the same level."

20. Article 63 is amended and supplemented as follows:

"Article 63.- The adjustment of the final settlement of accounts shall be stipulated as follows:

1. The tasks to be performed during the period of adjusting the final accounts:

- Continue to account the budget revenues and expenditures arising from December 31 and before but their supporting documents come later;

- Compare and deal with the errors during the process of cost-accounting accountancy;

- Deal with the preceding year's budget expenditures according to the decisions of the competent levels.

2. The time for adjusting the final accounts:

- By the end of January 31 of the following year for the commune-level budget;

- By the end of February 28 of the following year for the district-level budget;

- By the end of March 31 of the following year for the provincial-level budget;

- By the end of May 31 of the following year for the central budget."

21. Article 67 is amended and supplemented as follows:

"Article 67.- The order of making, sending and approving annual statements of final accounts of budget revenues and expenditures of the administration of various levels is stipulated as follows:

1. The commune Finance Board shall have to make the commune's annual statement of final accounts of budget revenues and expenditures and submit it to the commune People's Committee for consideration which shall then submit it to the district Finance Section, and at the same time to the commune People's Council for approval. In cases where there is any change in the commune's annual statement of final accounts after it was approved by the commune People's Council as compared to the one sent to the district Finance Section the commune People's Committee shall have to report such change to the district Finance Section.

2. The district Finance Section shall have to verify the statement of final accounts of the commune budget revenues and expenditures; make the statement of final accounts of the district budget revenues and expenditures; sum up the reports on State budget revenues in the district; prepare the final accounts of the district budget expenditures (including the district and commune budget revenues and expenditures) and submit them to the district People's Committee for consideration which shall then send them to provincial Finance and Pricing Department and at the same time to the district People's Council for approval. In cases where there is any change in the district's statement of final accounts after it was approved by the district People's Council as compared to the one sent to the provincial Finance and Pricing Department, the district People's Committee shall have to report such change to the provincial Finance and Pricing Department.

3. The provincial Finance and Pricing Department shall have to verify the statements of final accounts of the district budget revenues and expenditures; make the statement of final accounts of the provincial budget revenues and expenditures; sum up the reports on the State budget revenues in the province; prepare the final accounts of the provincial budget expenditures (including the provincial, district and commune budget revenues and expenditures) and submit them to the provincial People's Committee for consideration which shall then submit them to the Ministry of Finance and the regional State auditing agency and at the same time to the provincial People's Council for approval. In cases where there is any change in the statement of final accounts after it was approved by the provincial People's Council as compared to the one sent to the Ministry of Finance, the provincial People's Committee shall have to report such change to the Ministry of Finance and the regional State auditing agency.

4. The Ministry of Finance shall have to verify the statements of final accounts of the provincial budget revenues and expenditures; make the final statement of accounts of the central budget revenues and expenditures, sum up and make the general statement of final accounts of State budget revenues and expenditures and submit them to the Government for submission to the National Assembly for ratification, and concurrently to the State auditing agency."

22. Article 70 is amended and supplemented as follows:

"Article 70.-

1. Time limit for submitting monthly and quarterly accounting reports and annual statements of final accounts:

a/ The time limit for submitting monthly and quarterly accounting reports shall be defined by the Minister of Finance.

b/ The annual statements of final accounts must be sent to the finance agency not later than February 15 of the following year (for the level I budget drafting units of the district level), not later than March 15 of the following year (for level I budget drafting units of the provincial level) and not later than April 30 of the following year (for the level I budget drafting units of the central level).

c/ The annual statements of final accounts of the lower-level budgets shall be sent to the higher level not later than February 15 of the following year (for commune budgets); not later than March 15 of the following year (for district budgets) and not later than April 30 of the following year (for provincial budgets).

2. In cases where the lower-level budget drafting units fail to send quarterly accounting reports and annual statements of final accounts within the prescribed time-limit, the finance agency shall be entitled to temporarily suspend the allocation of funding until it receives the accounting reports and the statements of final accounts, except for a number of urgent expenditures to be decided by the competent levels.

Article 2.- This Decree takes effect from the budget year of 1999. The previous regulations of the Government, the ministries, ministerial-level agencies, agencies attached to the Government, which are contrary to this Decree are hereby annulled.

The Ministry of Finance and the concerned ministries shall have to guide and organize the implementation of this Decree.

Article 3.- The ministers, the heads of the ministerial-level agencies and agencies attached to the Government and the presidents of the People's Committees of the provinces and cities directly under the Central Government shall have to implement this Decree.

On behalf of the Government

For the Prime Minister

Deputy Prime Minister

NGUYEN TAN DUNG