INSTRUCTION

ON FINANCIAL TASKS AND STATE BUDGET MANAGEMENT OVER THE LAST MONTHS OF 2014

In the first 07 months of 2014, the Ministries, branches and all local authorities have actively implemented the Resolutions of the Communist Party, National Assembly and the Government on carrying out the plan for socio-economic development and state budget estimates for year 2014. Thanks to that, the socio-economic situation is developing positively as planned and satisfactory results are obtained in most of areas. Apart from the achievements, our economy is still facing many difficulties and challenges. i.e. the recovery of manufacture and business is slow; many enterprises are facing difficulties; the number of enterprises which are dissolved or shut down is high, access to capital sources is difficult, credit growth is slow; the developments of disasters, diseases and climate change is complicated. The illegal deployment of HD-981 oil platform of China in Vietnam’s exclusive economic zones and continental shelves, which commits serious violations against the international Law, the Declaration on Conduct of the Parties in the South China Sea (DOC) and the high-level agreements between the two nations, has caused socio-economic impacts on Vietnam including impacts on receipts and expenditures of the State budget. Besides, even though there are some initial achievements in overcoming the shortcomings of the State budget management (the distribution is dispersive, wasteful and inefficient), the overcoming progress is still slow.

In order to deal with the difficulties, fulfill the tasks of socio-economic development and manage the State budget in 2014 as well as fulfill the rising demands for National defense, security and protect Vietnam’s sovereignty over East Sea, the Prime Minister requests the Ministers, Heads of ministerial-level agencies, Governmental agencies and other central agencies (hereinafter referred to as the Ministries and agencies) and the Presidents of the People’s Committees of central-affiliated cities and provinces to keep implementing the Resolutions of the National Assembly and the Government, Instructions of the Prime Minister, intensify the management, implement fully and efficiently the approved measures, especially the following major contents:

1. Manage concurrently and efficiently the fiscal policy and monetary policy in order to facilitate the manufacture, control inflation, stabilize the macroeconomics and ensure social security. Collect information proactively, anticipate the potential risks to the plan for socio-economic development and revenue & expenditure of the State budget in the future, develop practical measures for possible circumstances. Based on such actions, strive to achieve the economic growth targets and an excess of about 8-10% of estimated state budget revenue of 2014.

a) The Ministries, agencies and local authorities, within their area of competence, must:

- Take measures for dealing with difficulties and enterprises’ proposals; support enterprises in recovering from damages quickly; step by step decrease the number of enterprises which are dissolved or shut down.

- Promptly implement the Decrees of the Government on policies for aquaculture and fishery development, including the incentive policies for offshore fishing (on credit, insurance, training, etc.) in order to give a great boost to the aquaculture and fishery according to the practical demands.

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b) The State bank shall take charge and cooperate with the Ministries, agencies and local authorities in managing credit according to the development of macroeconomics, inflation control and economic growth targets, measures for bad debts; instruct credit institutions to take the initiative in approaching enterprises to advise on taking loans for investment and efficient business plan; encourage the application of credit rating in order to increase unsecured loans and restructure the high interest loans granted in the past.

c) the Ministry of Finance shall take charge and cooperate with the Ministries, agencies and local authorities in:

- Hurriedly providing guidance on the incentives, exemption and reduction of corporate income tax according to the Law on amendments to the Law on corporate income tax; developing tax relief policies or offsetting mechanism applied to the enterprises that are facing capital difficulties due to unsold goods, deferred payments; reducing penalties for late tax payment.

- Continuing to simplify and modernize administrative taxation and customs procedures to assist taxpayers in exercising their rights and fulfilling the obligations to the state.

- Monitoring closely the developments of market prices, proposing timely appropriate measures according to the regulations of the Law in order to make valorizations, control inflation locally and nationwide, especially on the occasion of holidays; Continuing to control the prices of the essential commodities (petrol, oil, power, coal, milk for children under 6, public services, etc.) according to market mechanism with regulation by the state. Intensify the prevention and fight against transfer pricing, smuggling, counterfeits and commercial frauds.

2. Enhance the management of tax collection, prevent revenue loss, and settle tax arrears:

the Ministry of Finance, Ministries, agencies and local authorities must:

a) Check and identify the revenue sources for the State budget in the administrative division; verify the tax declarations of enterprises, organizations and individuals in order to collect correctly, sufficiently and in a timely manner taxes, fees, charges and other receivables for the State budget.

b) Expedite the collection of the due taxes and other receivables that were deferred in 2013. Collect sufficiently and in a timely manner the receivables according to the results of audit, inspection and Law enforcement agencies. Manage properly the tax refunds in order to ensure serving right objects, implementing properly the policies, detecting and handling strictly the violations in a timely manner.

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3. Enhance the management of the State budget expenditure in order to ensure the thriftiness, stringency and efficiency of the expenditure.

a) The Ministries, agencies and local authorities within their area of competence must:

- Take back the provided capital in the plan for 2014 which is in the estimate for the beginning of the year of the Ministries, central agencies and local authorities but has not been distributed to investment projects or already distributed but the projects has not yet started up to June 30, 2014 according to the regulations of the Law on managing capital invested in infrastructural development and use it to increase central and local budget reserves; the funding for regular purposes which is handed over to units as estimated but has not been fully distributed by the end of June 30, 2014 (except a number of items are permissible for later distribution according to the regulations).

- Speed up the progress of construction and disbursement of the development investment capital, especially the investment capital from the State budget, Government bonds, National Objective Programs, ODA; enhance the settlement of outstanding debts of infrastructural development according to the Instructions of the Prime Minister no. 27/CT-TTg dated October 10, 2012 on the primary measures for local arrears of infrastructural development and no. 14/CT-TTg dated August 26, 2013 on enhancing the management and settlement of outstanding debts from infrastructural development funded by the State budget and Government bonds. Especially:

- Do not postpone provision of the investment in the plan for 2014, the advances from the State budget and Government bonds, and additional investments to the plan to 2015 (except some cases in which postponement is permitted by the competent authorities).

- Minimize paying advances from the State budget for the projects, except the necessary cases that it is required for ensuring National defense and security, protection of Vietnam’s maritime sovereignty and ensure sources of repayment for the advances.

b) Check the implementation of introduced policies on social security, ethnics and mountainous regions. Ensure the sources of repayment and make payment stringently and in a timely manner according to the regulations.

c) Strictly implement the policies on thrift practice and wastefulness prevention for the management of regular expenditure; check and arrange to cut or defer expenditures which are not really necessary. i.e:

- Cut or defer the expenditures on replacing equipment, cars, etc. which are in the end of useful life but still usable. The expenditures on purchases and repairs which are in the estimate of units but have not been approved or no tenders are held by October 31, 2014 shall be cancelled after such date.

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Do not develop new schemes, programs, policies or increase limits that increase expenditure of the State budget without guaranteed sources.

d) Check and manage stringently Brought forward expenditures. Expenditure is permitted to bring forward only if it is essential according to the regulations of the Law. Do not bring forward the expenditures on the duties of agencies funded by the State budget which are late at the agencies’ fault.

4. Managing the State budget in order to balance the budgets

The Ministry of Finance and the People’s Committees of central-affiliated cities and provinces shall take charge of:

a) Managing the distribution and use of the budget reserves which is estimated for budgets.

The reserve of central budget shall focus on fulfilling the demands for the National defense, security and protection of Vietnam’s maritime sovereignty. Every local authority must proactively use the local budget reserve to deal with the disasters and irregular arising demands. The central budget shall be considered to be used for supporting the local budget only in the cases that the arising demands are beyond the capability of the local authority.

b) Arranging and managing the expenditures and take measures for ensuring balance the budgets depending on the receipt capability.

Checking and arranging the expenditures in order of priority, cut or defer the unnecessary expenditure in case the revenue collected for balancing the local budget is less than the estimate. Ensuring the financial sources for the expenditures on salaries and those classified as salaries, regular expenditures which support the normal operation of units, expenditures on social security and investment in infrastructural development for important works; Using the local financial sources in order to compensate the shortfall in revenue collected for balancing the local budget. The local authorities are not permitted to get commercial loan in order to cover the expenditures of the local budgets (including investment in infrastructural development). The mobilization of capital invested in essential infrastructures in the administrative divisions shall comply with Clause 3 Article 8 of the Law on the State budget and ensure the sources of repayment which are included in the annual estimates of local budget.

c) Enhancing the supervision and inspection of the state budget expenditures within the area of competence; ensuring the state budgets are used stringently and efficiently.

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5. Implementation

a)The Ministries and agencies, the Presidents of People’s Committees of central-affiliated cities and provinces must promptly implement this Instruction and supervise the implementation of their inferiors and affiliated units in order to implement the state budget revenue and expenditure in 2014. They must also review the implementation, take strict measures at a timely manner for their inferior entities who commit violations according to according to the regulations of the relevant Laws.

b) The Ministry of Finance shall take charge and cooperate with the Ministry of Planning and Investment, the Ministries, agencies and local authorities in monitoring, expediting and inspecting the implementation of the Instruction; Analyze and present the report on the State budget in the monthly meeting of the Government.

THE PRIME MINISTER




Nguyen Tan Dung