NATIONAL ASSEMBLY - SOCIALIST REPUBLIC OF VIETNAM Independence - Freedom - Happiness No 27/2016/QH14 Ha Noi, November 11, 2016 RESOLUTION ON STATE BUDGET ESTIMATES OF 2016 THE NATIONAL ASSEMBLY OF THE SOCIALIST REPUBLIC OF VIETNAM Pursuant to the Constitution of the Socialist Republic of Vietnam; Pursuant to the Law on State budget No 83/2015/QH13 and the Resolution No 25/2016/QH14 dated November 09, 2016 by the National Assembly on National 5-year financial plans for the 2016-2020 period; Upon the consideration of the Report No 467/BC-CP dated October 19, 2016 and No 522/CPKTTH dated November 09, 2016 by the Government; the Inspection report No 183/BC-UBTCNS14 dated October 19, 2016 by the Finance and Budget Committee; the Report No 54/BC-UBTVQH14 dated November 11, 2016 by the Standing committee of the National Assembly of the Socialist Republic of Vietnam and the National Assembly’s enquiry reports, RESOLVES: Article Approval for state budget estimates of 2017 Estimated gross state budget balance revenue is VND 1,212,180 billion (one million two hundred twelve thousand one hundred and eighty billion) Estimated gross state budget balance revenue is VND 1,390,480 billion (one million three hundred ninety thousand four hundred and eighty billion) State budget deficit is VND 178,300 billion (one hundred seventy eight thousand and three hundred billion), equivalent to 3.5% of gross domestic products (GDP), including: Central government’s budget deficit is VND 172,300 billion (one hundred seventy two thousand and three hundred billion), equivalent to 3.38% of GDP; Local government’s budget deficit is VND 6,000 billion (six thousand billion), equivalent to 0.12% of GDP Estimated loan of the state budget, including loans taken to make up for the deficit and loans taken to pay loan principals of the state budget is VND 340,157 billion (three hundred forty thousand one hundred and fifty seven billion) (Enclosed with the Annexes No 1, 2, and 4) Article Government's responsibilities Execute closely the fiscal policies; cooperate consistently which monetary policies to support the development of production and business, continue to stabilize macroeconomics, control the inflation and boost the economic growth Reinforce the disciplines on finance - budget; implement state budget estimate according to law Strengthen the inspection and the explicitness and transparency in the use of the state budget, especially in areas most likely to raise corruption and/or extravagance Direct the conduct and implementation of laws on tax and promptly provide guidance on the conversion of a number of types of charge to service prices according to law Strengthen the investigation and inspection of taxation; prevent the loss of revenue, smuggling, trade frauds, production and trade of counterfeits, price transfer and tax evasion; promptly discover and handle the unconformable declaration, fraud or evasion of taxes Minimize the promulgation of new policies which lead to the decrease of the State budget revenue From 2017, the revenues of road pricing collected for each vehicle, marine security charges (after deducting the collection costs) will be specified in the gross state budget balance revenue and will be used for maintaining the road network and ensure the marine security Distribute the revenues of environment protection tax on petroleum products between the central government’s budget and local government’s budget according to regulations of the Law on State budget By 2017, transfer 100% of revenues of special excise duty on petroleum products of Nghi Son Refinery to the central government’s budget From 2018, when the refinery operates stably, the transfer of revenues will be redistributed according to law Collect 72% of interests from the trade of oil and gas of the host country, interests distributed from joint Russian-Vietnamese enterprise “Vietsovpetro” and the document reading’s incurred amount of money in 2017 The remaining amount (28%) will be given to Vietnam National Oil and Gas Group to make investment according to law Guide local governments to include the revenue from lottery operations in the balance revenue of local government’s budget and use the whole of such revenue for development investment under the decision of provincial People’s Councils, where the investment in education, training, vocational training, healthcare, agricultural development and climate change response shall be prioritized Arrange the expenditure on food safety management and assurance in local area in proportion to the revenue from penalties for administrative violations against regulations on food safety which is transferred to local government’s budget Ensure the rate of publication of Government bonds having term of not less than years at least 70% of total amount of Government bonds to answer to the requests for capital mobilization for the State budget, schedule structure of debt portfolio, risk management and bond market development Direct the State budget expenditure according to the assigned estimates Save thoroughly on recurrent expenditure of each Ministry, central and local authorities; minimize the expenditure on the organization of conferences, seminars, festivals; limit the expenditure on overseas research/survey trips; limit the expenditure on purchase of vehicles and expensive equipment; encourage the limitations on employment of public automobiles reasonably and efficiently Enhance the administrative reform in the State budget expenditure management Promulgate policies on increasing the State budget expenditure only when it is actually necessary and with available sources Manage closely and minimize the state budget estimate advances and brought forward expenditure Must not convert on-lent loans or government-guaranteed loans into state budget allocation Strictly comply with the Law on Thrift practice and waste prevention and the Anticorruption Law 10 Adjust the base salary from VND 1.21 million per month to VND 1.3 million per month, increase the retirement pension, social insurance allowance and benefit to people meritorious to the Revolution an amount equal to the increase in the base salary Time for such activities is from July 01, 2017 Assign Ministries and central and local authorities to be self-controlled in extra pay, on the basis of the assigned state budget estimates, to regulate the increase in base salary Central government’s budget shall guarantee the funding for adjustment of retirement pension, social insurance allowance (covered by the state budget) and benefit to people meritorious to the Revolution; support partially the extra pay for a number of poor localities whose budgets cannot be balanced according to regulations of the Government 11 In 2017, issue VND 50,000 billion of Government bonds to invest in essential and urgent constructions and projects in medium-term public investment plans Estimated government bond capitals in 2016 which have not been used may be transferred for use in 2017 The management of spending from the state budget to serve the investment in development must comply with law provisions Strengthen the mobilization of domestic and foreign resources for development investment, complete the legal basis to enhance public-private partnership, enabling economic sectors to participate in infrastructural construction, especially in agriculture and rural areas and tourism sector Guide local governments to use supplements serving certain purpose to prioritize the support related to housing for households of people meritorious to the revolution 12 From 2017, direct responsible local governments to initially arrange the payment of loan principals and interests according to the Law on State budget 13 Closely monitor the State budget deficit; put forward positive measures to minimize the deficit Reinforce the inspection and supervision of applications for loans, use of loans and debt payment, especially new loans and Government-guaranteed loans Ensure balance of public debts, government debts and national foreign debts within prescribed limits 14 Direct Ministries and central and local authorities to boost the self-control of non-business unit in association with the roadmap for accurate calculation of public service prices and, on that basis, decrease the direct aid for non-business unit to increase the spending on support for poor people and beneficiaries of incentive policies and create funding for salary reform and for supporting the purchase and maintenance to increase public service quality Adjust prices of articles under the state management toward the market price, ensuring to make up reasonably for the production and trading cost to attract the investment from other economic sectors Article Supervision of implementation The Standing committee of the National Assembly, the Finance and Budget Committee, the Council of Ethnic Affairs, committees of the National Assembly, delegations of the National Assembly, and deputies of the National Assembly shall be responsible for supervising the implementation of this Resolution within their responsibility and power as prescribed This Resolution has been ratified in the 2nd Meeting Session of the 14th National Assembly dated November 11, 2016 CHAIRMAN OF NATIONAL ASSEMBLY Nguyen Thi Kim Ngan APPENDIX No STATE BUDGET BALANCE IN 2017 (Enclosed with the Resolution No 27/2016/QH14 dated November 11, 2016 by the National Assembly) Unit: Billion dong No CONTENT E S T I M A T ESTIMATE OF E 2017 O F A- ESTIMATED GROSS REVENUE OF STATE BUDGET Domestic revenue , 1,212,1802 , 990,2809 , Crude oil revenue Balance revenue from export-import operations Aid revenue B- ESTIMATED BALANCE EXPENDITURE OF STATE BUDGET Investments in development Expenditure on national reserve Payment of loan interests Aid provision , 38,300 0 180,000, 0 , 3,6006 0 , 1,390,4800 , 357,150, 8505 , 98,900 0 1,3001 , 0 Recurrent expenditure Expenditure on pay reforms and staff downsizing Contributions to financial reserve funds Provisions 896,280, , 6,6006 0 1000 , 29,300 0 C- STATE BUDGET DEFICIT Deficit rate compared with GDP Deficit of the central government’s budget Deficit rate compared with GDP 178,300, 0 , 3,5% % 172,300, 0 , 3,38% % Deficit of the local government’s budget (1) Deficit rate compared with GDP D- PAYMENT OF LOAN PRINCIPALS , 0,12% % (2) 163,846 Payment of loan principals by central government’s budget 4 144,000, 0 - From loans 4 144,000 , 0 - From the surplus and increase of revenues, the economical spending and the residual Payment of loan principals by local government’s budget , 19,846 - From loans , 12,537 - From the surplus and increase of revenues, the economical spending and the residual DD- TOTAL LOAN BY THE STATE BUDGET 6,000 Loans taken to make up for deficit , 7,309 340,157, 183,6201 , Loans taken to pay principals 156,537, Notes: (1) The difference between the deficit and the surplus of local government (2) By offsetting payment of principals against the surplus, economical spending, residual and local government’s budget surplus, the amount of loans taken to pay loan principals shall be around VND 156,537 billion APPENDIX No REVENUE AND EXPENDITURE BALANCE OF CENTRAL GOVERNMENT’S BUDGET AND LOCAL GOVERNMENT’S BUDGET IN 2017 (Enclosed with the Resolution No 27/2016/QH14 dated November 11, 2016 by the National Assembly) Unit: Billion dong No CONTENT A CENTRAL GOVERNMENT’S BUDGET ESTIMATE OF 2017 I Central government’s budget revenue 729,730 Collection of taxes, charges and others 726,130 Aid revenue II Central government’s budget expenditure Expenditure depending on the tasks of the central government’s budget according to decentralization Contributions to local government’s budget - Supplement to cover budget deficit 3,600 902,030 647,400 254,630 194,250 - Supplement serving certain purposes 60,380 III Central government’s budget deficit 172,300 B LOCAL GOVERNMENT’S BUDGET I Local government’s budget revenue Local government’s budget revenue received according to decentralization Supplement revenue from central government’s budget - Supplement to cover budget deficit 737,080 482,450 254,630 194,250 - Supplement serving certain purposes 60,380 II Local government’s budget expenditure 743,080 Expenditure to balance local government's budget 682,700 Expenditure from source of supplement serving certain purpose III Local government’s budget deficit 60,380 6,000 APPENDIX No ESTIMATES OF REVENUE OF STATE BUDGET BY CATEGORY OF 2017 (Enclosed with the Resolution No 27/2016/QH14 dated November 11, 2016 by the National Assembly) Unit: Billion dong No REVENUE CONTENT ESTIMATED GROSS REVENUE OF STATE BUDGET ESTIMATE OF 2017 1,212,180 I Domestic revenue 990,280 Revenue from state-owned enterprises 286,441 Revenue from foreign-invested enterprises 201,057 Revenue from non-state economic sector 194,419 Personal income tax 80,977 Environmental protection tax 45,165 Charges and fees 54,339 Where: Registration fees Revenue from house and land a Agricultural land use tax b Non-agricultural land use tax 26,069 76,555 27 1,180 c Revenue from land rental or water surface rental 11,398 d Revenue from land levies 63,700 dd Revenue from state-owned house sale or lease 249 Revenue from lottery operations 24,000 Revenue other than state budget revenues 25,853 10 Revenue from public land and other yields of public property 1,473 II Crude oil revenue 38,300 III Balance revenue from export-import operations 180,000 Gross revenue from export-import operations 285,000 Import & export duties, special consumption tax, exports environment protection a 101,700 b VAT on imported goods (gross revenue) 183,300 VAT refund -105,000 IV Aid revenue 3,600 APPENDIX No EXPENDITURE ESTIMATES OF THE STATE BUDGET, CENTRAL GOVERNMENT’S BUDGET AND LOCAL GOVERNMENT’S BUDGET ACCORDING TO EXPENDITURE STRUCTURE OF 2017 (Enclosed with the Resolution No 27/2016/QH14 dated November 11, 2016 by the National Assembly) Unit: Billion dong No CONTENT TOTAL DIVIDED D I V I D E D D I V I D E D D I V I D E D Central Central L government’s government’s o budgetLocal c government’s a budget l g o v e r n m e n t ’ s budget b u d g e t ESTIMATED GROSS EXPENDITURE 1,390,480 OF STATE BUDGET Investments in development I 357,150 II Expenditure on national reserve III Payment of loan interests IV Aid provision 707,780 (2) 682,700 7 179,700177,4 179,700 , 50 850 850 850 98,900 98,900 98,900 1,300 1,300 1,300 Recurrent expenditure V (1) 896,280 404,630491,6 404,630 , 50 Where: Expenditure on education - training and vocational training 215,167 22,194 22,194192,971 39 , Expenditure on science and technology career VI Expenditure on pay reforms and staff downsizing 11,243 8,731 6,600 6,600 Contributions to financial reserve funds VII 6,600 100 1000 29,300 , 15,800 15,80013,500 0 Provisions VIII , 8,7312,5125 Notes: (1) Including the supplement serving certain purpose to local government’s budget; having deducted the balance supplement to local government’s budget (2) Including the balance supplement of VND 194,250 billion from central government’s budget to local government’s budget; not including the supplement serving certain purpose from central government’s budget to local government’s budget This translation is made by LawSoft and for reference purposes only Its copyright is owned by LawSoft and protected under Clause 2, Article 14 of the Law on Intellectual Property.Your comments are always welcomed ... (Enclosed with the Resolution No 27 /2016/ QH14 dated November 11, 2016 by the National Assembly) Unit: Billion dong No REVENUE CONTENT ESTIMATED GROSS REVENUE OF STATE BUDGET ESTIMATE OF 2017 1,212,180... GOVERNMENT’S BUDGET IN 2017 (Enclosed with the Resolution No 27 /2016/ QH14 dated November 11, 2016 by the National Assembly) Unit: Billion dong No CONTENT A CENTRAL GOVERNMENT’S BUDGET ESTIMATE OF 2017... CHAIRMAN OF NATIONAL ASSEMBLY Nguyen Thi Kim Ngan APPENDIX No STATE BUDGET BALANCE IN 2017 (Enclosed with the Resolution No 27 /2016/ QH14 dated November 11, 2016 by the National Assembly) Unit: Billion