CIRCULAR

GUIDING THE 2002 STATE BUDGET ESTIMATION

In furtherance of the Prime Minister’s Directive No. 16/2001/CT-TTg of June 21, 2001 on the elaboration of socio-economic development plan and State budget estimation for 2002, the Finance Ministry hereby guides the evaluation of the situation on execution of the 2001 State budget and the 2002 State budget estimation as follows:

A. ORGANIZATION OF THE ADMINISTRATION AND EVALUATION OF THE SITUATION OF EXECUTION OF THE 2001 STATE BUDGET

I. ORGANIZING THE ADMINISTRATION OF THE STATE BUDGET IN THE LAST SIX MONTHS OF 2001

The results of realization of the socio-economic tasks and State budget in the first six months of 2001 show that the economic and budgetary situation continues developing along the positive direction; many progresses have been made in some socio-cultural domains; the political security and social order and safety have been ensured.

However, numerous great difficulties have actually arisen, which should be settled with concentrated efforts: agricultural products were sold slowly and at lower prices; export, though on the rise, failed to reach the set rate; the number of underemployed people tended to rise; social evils remain acute. State budget revenues in some fields were recorded low, failing to match the economic growth rate. The deployment of budget estimation remained slow in some ministries and localities; the volume of implemented capital construction projects financed by the State budget and investment credit under the 2001 plan was recorded low; foreign direct investment tended to rise but slowly; a number of target programs were slow to be materialized; the State budget expenditure only reached 45.4% of the yearly estimate, in which the expenditure on capital construction was recorded only at 35.7%. The deployment of the policy on socialization in the fields of education, health, culture and physical training and sports as well as the experimental application of the financial management mechanism of self-financing to a number of administrative and public-service units with revenues are still limited.

The above situation demands that the ministries and localities base themselves on the socio-economic development objectives and tasks as well as budget revenue and expenditure estimates already assigned for the whole year by the Government to continue implementing in the last six months of 2001 the solutions already mapped out at the beginning of the year and the supplementary solutions in the year according to the Government’s Resolution No.05/2001/NQ-CP of May 24, 2001, focussing on the implementation of the following major solutions:

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In order to promote the achieved results and overcome the existing problems in the performance of the 2001 State budget revenue tasks, to strive to exceed the revenue estimate and reduce the 2001 State budget overspending according to the National Assembly’s Resolution No.38/2000/QH10 of November 28, 2000, the ministries, branches and localities shall concentrate on directing and efficiently performing the tasks on enhancing the revenue management against failure or omission of revenue collection for the 2001 State budget under the Prime Minister’s Directive No.15/2001/CT-TTg of June 11, 2001 and the Finance Ministry’s Official Dispatch No.5501 TC/TCT of June 14, 2001.

2. On State budget expenditure:

The budget management in the last six months of 2001 shall focus on the implementation of the following measures:

- Performing the tasks strictly according to the assigned estimates; tightly controlling expenditures according to regime and norms in a thrifty and efficient manner. The ministries and localities take initiative in managing it according to the budget expenditure estimates already assigned by the Government; no addition shall be made outside the estimates for centrally- run units as well as provinces and centrally-run cities, except for case of absolute necessity due to force majeure incidents. The local administrations at all levels only use budget reserves to settle important tasks arising unexpectedly in the year and to cope with natural calamities, famine, which may occur.

- Stepping up the implementation tempo of capital construction investment plans, soon completing procedures for allocation and payment of capital for completed volume as stipulated, ensuring adequate capital for projects having gone through all procedures; reviewing the implementation situation and proceeding with the transfer of unallocated capital construction funding of projects and units which are slow in their implementation to other projects and units which fully meet the conditions according to the Prime Minister’s Decision No.146/2000/QD-TTg of December 22, 2000; not letting the situation of capital awaiting projects occur. Promptly removing difficulties and problems in order to continue accelerating the tempo of disbursement of ODA capital (such as the ground clearance, simplification of administrative procedures, allocation of adequate reciprocal capital).

- Organizing the implementation of national target programs under the Prime Minister’s Decision No.71/2001/QD-TTg of May 4, 2001 on the national target programs for the 2001-2005 period; accelerating the implementation tempo and the timely allocation of funding for national target programs already included in the estimates, particularly the program on hunger elimination and poverty alleviation and employment, program 135 and the project on planting 5 million hectares of new forests.

Localities must base themselves on budget revenue capability to administer the budgets:

+ For localities capable of collecting the budget revenues in excess of estimates, the amounts collected in excess should be used with priority for addition of capital to local socio-economic infrastructure projects, the program on solidification of canals and rural traffic roads, projects to be completed in 2001; to the support for production and business development, plant and animal breed development; the repayment of loans borrowed for investment in socio-economic infrastructure, loans borrowed for investment in capital construction in communes and debts owed to irrigation companies; the increase of financial reserve fund; not supplementing expenditures on administrative management, on the procurement and/or repair of equipment and facilities, which are not really urgent.

+ For localities with some revenues possibly being lower than the estimates, they must strive to increase revenues from possible sources in order to achieve the assigned revenue estimates made at the beginning of the year; and at the same time they must take initiative in restructuring their spending tasks to suit the local budget revenue sources on the basis of ensuring funding for important socio-economic development tasks such as expenditures on investment in agricultural and rural development, education and training, science and technology, social security,�

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1. On State budget revenue:

Based on the situation of implementation in the first six months, to assess the 2001 revenue results on the basis of application of measures for the fulfillment and overfulfillment of the estimates assigned in Decision No.206/2000/QD-BTC of December 25, 2000 of the Finance Minister and the potential revenue amounts enclosed with the Finance Ministry’s Official Dispatch No.5501 TC/TCT of June 14, 2001, focussing on analyzing the following issues:

- The causes affecting the 2001 revenue implementation results; the situation of implementation as against plans regarding the targets on output of main products, production and consumption, cost and sale prices thereof

- The impacts of the supplemented and/or amended regimes and/or policies on revenue sources in the localities.

- Determining the uncollected tax amounts carried forward from 2000, the amounts already collected in 2001; clearly stating the causes and handling measures. On that basis, determining the amount arising in 2001 and the amounts payable to the budget in 2001.

- The to be-reimbursed value added tax amounts arising in 2001; the amounts already reimbursed to enterprises in 2001; the reimbursable amounts of 2001 expected to be carried forwards to 2002.

1.1. The State enterprise sector:

- Firmly grasping the situation on production and business of enterprises, evaluating the situation on capital, assets, debts, increase and/or decrease of original prices of fixed assets- the number of laborers, wage, turnover, production cost, economic and technical norms, the situation on production and consumption of major products, profits earned and amounts payable to budget.

- Analyzing and evaluating the results of the work of organizing the revenue management and the situation of observing the operation process of tax management. Advantages and disadvantages in 2001, development capacity in 2002 and subsequent years.

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- Managing the collections from subjects that pay VAT by deduction methods:

+ Evaluating the situation of tax calculation, declaration and payment by units.

+ The change in number of subjects of management in 2001 as compared to 2000.

- Managing the collections from subjects that pay VAT by direct method:

+ Through the registration for granting of tax codes, evaluating the extent of management of collections from households: The number of households which have made tax declaration and registration and been granted tax codes against the actual number of business households; the number of households already granted the business registration.

+ The extent of management of turnover against the actual business turnover: The situation of turnover declaration and adjustment, added value, taxable income and taxes of various subjects; the extent of adjustment of turnover, VAT and taxes on each commodity group.

1.3. The foreign-invested enterprise sector:

- The total number of enterprises already granted licenses, the number of expired licenses, the number of dissolved enterprises, the number of licenses still effective, including the number of enterprises already commencing their production and business, the number of enterprises being under construction, the number of enterprises not yet deployed.

- The total labor, total wage fund, turnover, production and business costs and efficiency.

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1.4. Agricultural land use levy:

- On the basis of the register on agricultural land use levies, evaluating the results of additional exploitation of land areas subject to tax, to be entered the tax register; the results of tax debt collection, paddy prices for tax calculation against the estimates assigned by the State.

- Synthesizing the results of effecting the exemption and reduction of agricultural land use levies in 2001 for subjects prescribed in the Government’s Resolution No.05/2001/NQ-CP of May 24, 2001 and the Finance Ministry’s Circular No.41/2001/TT-BTC of June 12, 2001 additionally guiding the exemption and reduction of agricultural land use levies in 2001 according to Resolution No.05/2001/NQ-CP.

1.5. House and land tax, land rents:

- Synthesizing the land areas already recorded in register for management of collection as compared to the land fund in the geographical areas under their respective management.

- Making clear analysis according to the following norms:

+ The number of enterprises, land areas being in use.

+ The number of enterprises, land areas and land rents already entered the tax register.

+ The number of enterprises, land areas and land rents which cannot be collected; clearly analyzing the causes thereof (failure to sign land lease contracts, land areas being not fully used by units, and other causes).

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- Evaluating the situation on debts of the land use right granting. Analyzing cases of prolonged debts, proposing handling measures.

- Evaluating the impacts of the promulgation of a number of policies aiming to step up the tempo of granting papers on dwelling-house ownership and land use right such as the policy of reducing prices of condominium apartments, support in land allocation money for subjects with meritorious services to the revolution, the reduction of house selling money according to work seniority of public officials and employees

1.7. Charge and fee collection:

Evaluating the situation of charge and fee collection and remittance by centrally-run organizations, provinces, districts, communes, wards that collect charges and fees: the collected amounts, the amounts permitted to be retained, the amounts remitted into the budget.

2. Regarding State budget expenditure:

2.1. Expenditures on capital construction: Focussing on revision and classification of all projects and works under the 2001 investment plans of the ministries, branches and localities; evaluating the situation on the completed volume and the capital amount already paid in the first 6 months for each project, each work, and on that basis, handling the capital according to the following principles:

- Urging the accelerated implementation tempo and quick and brief payment for investment projects and constructions in service of development of agriculture and rural economy (irrigation, dykes), natural disaster prevention and combat; research into, transformation and production of plant and animal breeds; Group A projects, reciprocal capital for ODA projects, projects to be completed in 2001.

- Effecting the transfer of unallocated capital of projects and units with slow capital disbursement to other projects and units. Resolutely suspending and dropping projects and/or works not going through all investment procedures, projects which are deemed inefficient or not really necessary yet.

2.2. For expenditures on the construction of socio-economic infrastructures, social welfare facilities, housing fund development, investment in agricultural and rural development, expenditure on forest regeneration financed with local budgets from revenue sources of land use levy, land rent, proceeds from sale of State-owned houses, revenues from construction lottery activities, agricultural land use levy, forest resource tax, localities should concretely evaluate the capability for the collection of each revenue in order to administer expenditures properly; where the revenue fails to reach the estimate, the expenditure should be reduced correspondingly; expenditures are made only when they are covered with revenues in order to avoid debts without sources to pay therefor.

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2.4. For regular expenditures: Based on budget estimates assigned at the beginning of the year and revenues retained to cover expenditures, the tempo of implementation of tasks to assess the capability for implementation in the whole year close to the reality of the ministries, localities and units. The evaluation of the whole year’s expenditures requires clear analysis of expenditures covered by budget allocations and expenditures covered by revenues allowed to be retained according to the prescribed regimes, the clear analysis of the structure of spending on wages (including increased wages), amounts of wage nature and expenditures compulsorily deducted from wages (social insurance, health insurance, trade union funding), regular operation expenditures and unexpected or irregular expenditures (procurement, repair), for use as basis for calculation to arrange the 2002 budget.

B. ESTIMATION OF 2002 STATE BUDGET REVENUES AND EXPENDITURES

I. OBJECTIVES AND REQUIREMENTS OF THE WORK OF ESTIMATION OF THE 2002 STATE BUDGET REVENUES AND EXPENDITURES

1. Requirements:

- The estimation of the 2002 State budget revenues and expenditures must be based on the objectives and tasks of socio-economic development in the 2001-2005 five year plan and in 2002 of branches and localities.

- The 2002 State budget estimates must exert positive impacts on the creation of stable and favorable environment for production and business with a view to boosting production and business, creating stable and steady revenue sources, raising accumulation, contributing an important part to the continued consolidation of the country’s capability and potentials, creating momentum for development in subsequent years, ensuring to achieve the objectives and fulfill the tasks set in the 2001-2005 five- year plan.

- Creating positive change in the restructuring of State budget, resolutely practicing thrift, combating wastefulness in parallel with the perfection of organizational apparatus, streamlining the payroll of administrative bodies, Party and State agencies, associations and mass organizations; focussing on increase of expenditures for development investment, education and training, science and technology, ensuring funding for the performance of defense and security tasks, furthering improving the regime of wage, allowances for people with meritorious services to the revolution, carrying out the program on hunger elimination and poverty alleviation, the social allowances belonging to the State budget. Stepping up the socialization in the fields of education, health, culture, physical training and sports in order to mobilize more resources for branch development.

- The State budget estimation must be carried out strictly according to the provisions of the State Budget Law and legal documents guiding the implementation thereof, strictly complying with the regulations on tasks, powers, organizing the discussion on budget and contents of reports on budget estimates, ensuring the grounds and bases for calculation according to set forms and tables and the time for submitting reports.

2. Objectives:

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b) The State budget expenditure estimates focus on the performance of the tasks of socio-economic development, security and defense maintenance; and at the same time the principle of thriftiness and rational relationship between regular expenditures and development investment expenditures must be firmly grasped; increasing reserves in order to actively cope with natural calamities including floods, handling tasks arising unexpectedly.

c) State budget balance:

- Tax and charge collection must ensure regular expenditures at a reasonable and thrifty level and ensure the repayment of due debts, continue allocating funding for effecting the adjustment of wage regime; put aside an appropriate proportion for accumulation for development investment.

- The State budget overspending must correspond to the firm capability of domestic loans and foreign preferential loans. Restricting domestic short-term loans at high interest rates to offset the State budget overspending.

d) For budgets of local administrations at all levels:

- The elaboration and decision on the 2002 budget estimates of local administration at all levels shall comply with the provisions of the State Budget Law; the 2002 budget is the budget in the period of stability (2000-2002), the local administrations at all levels organize the estimation of their respective budget revenues and expenditures, based on the revenue sources determined on the basis:

+ The proportion of revenue sources divided between the central budget and the local budget is stabilized under the Prime Minister’s decision, and assigned in 2000 and 2001.

+ The amount supplemented from the central budget for balancing the local budget (if any) is calculated with 3% increase over the supplementary amount in 2001 (including targeted supplementary amount of regular nature, the supplementary amounts for implementation of the regime of wage increase in 2001).

- Within the limit of revenue sources as determined above, to elaborate the local budget expenditure estimates ensuring the principle that: The total expenditure shall not exceed the total local budget revenue they are entitled to, giving priority to the tasks of expenditure for infrastructure construction (including craft village infrastructure, tourist infrastructure), giving priority to investment in solidification of canals and rural roads; increase the level of funding for the performance of the tasks of improving and developing plant and animal breeds; step up the crop and husbandry structure, the work of trade promotion, export market expansion and search; ensure funding for development of education and training, science, technology, environmental protection, health care, culture; increase investment in the performance of the tasks of hunger elimination and poverty alleviation, job creation, combat against social vices; practice thrift on administrative spending, limit procurement and repair of equipment and facilities.

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Applying the mechanism of investing in the construction of infrastructure of border-gate economic zones from the sources of State budget revenue therein under the Prime Minister’s Decision No.53/2001/QD-TTg of April 19, 2001 on policies toward the border-gate economic zones.

The local administrations of all levels shall arrange from their budgets a reserve of 3-5% of the total budget expenditure according to the provisions in Decree No.87/CP of December 19, 1996 of the Government, arrange additions to the financial reserve funds at reasonabe levels according to the provisions in Decree No.51/1998/ND-CP of July 28, 1998 of the Government.

II. MAJOR CONTENTS OF THE WORK OF ESTIMATING THE 2002 STATE BUDGET REVENUES AND EXPENDITURES

1. Regarding State budget revenues:

Elaborating the estimates according to Circular No.103/1998/TT-BTC of July 18,1998 of the Finance Ministry guiding the responsibility assignment, elaboration, execution and settlement of State budget while paying attention to the following major contents:

1.1. The State enterprise sector:

a) Value added tax: calculated according to the VAT Law, the Government’s Decree No.79/2000/ND-CP of December 29, 2000 and the Finance Ministry’s Circular No.122/2000/TT-BTC of December 29, 2000 guiding the implementation thereof.

b) Enterprise income tax: calculated and estimated according to the following guiding documents:

- Circular No.99/1998/TT-BTC of July 14, 1998 of the Finance Ministry guiding the implementation of the Government’s Decree No.30/1998/ND-CP of May 13, 1998 detailing the implementation of the Enterprise Income Tax Law.

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- Attention: In 2002, the enterprise income tax rate of 32% shall apply to production and business establishments that have enjoyed the tax rate of 25% prescribed in Item a, Point 1, Section V, Part B of Circular No.99/1998/TT-BTC of July 14, 1998 of the Finance Ministry.

c) Capital use levies: to be collected uniformly at the rate of 0.15%/month for State capital available at the enterprises.

1.2. Foreign-invested enterprise sector:

a) The enterprise income tax; tax on income from capital transfer; tax on transfer of profits abroad:

The estimation shall comply with the provisions of Circular No.13/2001/TT-BTC of March 8, 2001 of the Finance Ministry " Guiding the implementation of the provisions on tax applicable to investment forms under the Law on Foreign Investment in Vietnam".

- Attention:

+ Factors related to the determination of enterprise income tax amount, such as: transfer of losses of business cooperation contracts, adjustment of enterprise income tax rates and the enterprise income tax exemption and reduction preferences.

+ For tax on transfer of profits abroad, it should be based on tax settlements for 2000 and previous years to determine the profit amounts of foreign investors, which have not yet been transferred; and at the same time estimate the profit amounts of foreign investors which will arise in 2001 in order to determine the tax on profit transfer abroad in 2002.

b) For foreign organizations branches operating in Vietnam: To comply with Circular No.08/2001/TT-BTC of January 18, 2001 additionally guiding the provisions on enterprise income tax applicable to foreign organizations branches operating in Vietnam, stipulated in Circular No.99/1998/TT-BTC of July 14, 1998 of the Finance Ministry

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- For domestic organizations and individuals, the land rent shall be paid according to the provisions in Part I of Circular No. 35/2001/TT-BTC of May 25, 2001 of the Finance Ministry guiding the payment of land rents and contribution of capital to joint ventures with the land use right value by domestic organizations, households and individuals.

- For enterprises with foreign investment capital: To comply with the provisions in Decision No. 189/2000/QD-BTC of November 24, 2000 of the Finance Minister, guiding the payment of land, water surface and sea surface rents applicable to forms of foreign investment in Vietnam.

1.3. Agricultural land use levy: Based on the current collection regime as provided for in the Agricultural Land Use Levy Law and documents guiding the estimation of State budget, in which the following should be clearly determined and analyzed:

- The area and levy collection level applicable to poor households (according to the poverty standards prescribed in Decision No. 1143/2000/QD/LDTB&XH of November 1, 2000 of the Minister of Labor, War Invalids and Social Affairs).

- The area and collection level applicable to households in communes under the programs on socio-economic development in mountainous, deep-lying and remote communes meeting with exceptional difficulties ( Program 135).

- The area and collection level for areas under paddy or coffee.

1.4. Petroleum charges: To comply with the guidance in Circular No.06/2001/TT-BTC of January 17, 2001 of the Finance Ministry guiding the implementation of Decree No.78/2000/ND-CP of December 26, 2000 of the Government.

1.5. The income tax on high-income earners: To comply with the Ordinance on Income Tax on High-Income Earners (Ordinance No.35/2001/PL-UBTVQH10 of May 31, 2001) and documents guiding the implementation thereof.

1.6. Charge and fee collection: To comply with current collection policies with lists of charges and fees specified in Circular No.21/2001/TT-BTC of April 3, 2001 of the Finance Ministry guiding the amendment to a number of contents in Circular No.54/1999/TT-BTC of May 10, 1999 of the Finance Ministry.

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The ministries, centrally-run agencies and budget- drafting units at all levels, when elaborating the 2002 State budget expenditure estimates, must base themselves on the assigned estimates; on the basis of the prescribed spending regimes and norms, the volume of assigned tasks, concentrating funding on major important tasks, and tasks already decided by the Prime Minister; at the same time resolutely practice thrift and combat wastefulness. When elaborating the 2002 State budget expenditure estimates, each branch, each ministry, each central agency and each locality must continue grasping the policy of socialization; combining State budget sources with other sources mobilized from the society according to the prescribed regime in order to better perform the tasks of each branch, each unit. Specifically for a number of key fields as follows:

2.1. For expenditure on development investment:

2.1.1. Expenditure on investment in capital construction:

The State budget capital is invested only in infrastructure projects incapable of yielding profits and incapable of recovering capital. The estimation of expenditures on concentrated capital construction must ensure the following order: the socio-economic infrastructure projects, giving priority to the State’s key projects of important significance for socio-economic development in the 2001-2005 period, water works for natural disaster prevention and combat, the program on solidification of canals and rural traffic roads, efficient projects carried forwards from 2001, projects to be completed and put to use in the year; clearly determining the demand for capital in preparation for investment for important projects and works to be built in the year and years to come; the capital amounts advanced from the State budget in the previous years should be included in the budget estimates for repayment; concretely determining the capital construction volume completed in 2001 and not yet covered by any sources. To calculate estimates of reciprocal capital for programs, projects using loan capital, foreign aids, works under Program 135 of the Government. For Group C projects, the estimates must be elaborated according to the principle of reserving more than 70% of capital for transitional works; and works for which capital shall be allocated when their construction starts for completion within no more than two years.

Works included in the 2002 budget expenditure estimates must go through all procedures for capital construction and be approved before October 2001.

For projects invested with sub-lent loans, the project owners must take initiative in arranging reciprocal capital in conformity with the contents of the signed agreements and domestic financial regulations so as not to affect the project implementation tempo.

- Continuing to elaborate estimates for re-investment in the petroleum industry with the after-tax profits enjoyed by Vietnam from the Vietsovpetro joint venture under the Prime Minister’s regulations.

- Continuing to elaborate estimates for investment in socio-economic infrastructure projects, social welfare projects, housing fund development, investment in agricultural and rural development with importance being attached to the improvement of plant and animal breeds; re-generation of forest funds with local budgets from the following sources: land use levy, land rent, proceeds from construction lottery, proceeds from sale of State-owned houses, agricultural land use levy, forest resource tax,as in 2001.

- Applying the mechanism of arranging expenditure estimates for implementation of projects on socio-economic infrastructure development from the source of collected tax on hydro-electric water resources, for reinvestment in border-gate economic zones under the Prime Minister’s Decision No.53/2001/QD-TTg of April 19, 2001.

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- Continuing to apply the policy of supporting activities of trade promotion, market search and expansion, consumption of commodity products chiefly agricultural products, giving priority to key projects, key branches, efficient enterprises, export goods production.

- Supporting the transformation, development and production of plant and animal breeds.

- Expenditures in support of public-utility activities, public-utility enterprises with revenues being unable to cover expenditures, enjoying support according to the Government’s regulations.

2.1.3. Expenditures to offset difference of interest rates on development investment credit loans of the State shall comply with Circular No.43/2000/TT-BTC of May 23, 2000, Circular No.53/2000/TT/BTC of June 6, 2000, Circular No.59/TT/TCNH of September 27,1996, Circular No.02/2001/TT-BTC of January 5, 2001 of the Finance Ministry. To provide post-investment interest rate support under the Prime Minister’s Decision No.58/2001/QD-TTg of April 24, 2001.

2.1.4. For State reserve expenditures: Based on their assigned tasks of State reserves, the branches and units shall have to evaluate and determine their respective reserve levels till December 31, 2001; project the levels of addition to the reserves for each type of commodity, supplies and elaborate the State reserve expenditures on the preservation of goods of the branches and units in 2002.

2.2. For expenditures on price subsidies for policy goods items:

- Expenditures on price and freight subsidies for policy goods items for mountainous regions, prescribed in Decree No.20/1998/ND-CP, Official Dispatch No.1196/CP-KTTH of December 28, 2000 of the Government, are calculated according to Joint Circular No.11/1998/TT-LB/BTM-UBDTMN-BTC-BKHDT of July 31, 1998. To continue supplying free of charge pupils writing papers and curative medicines according to the Government’s Official Dispatch No.1196/CP-KTTH of December 28, 2000.

- Expenditures on price subsidy for maintaining original strains, for press, publication, cinematography, shall comply with the current regimes. The ministries, localities and units should thoroughly calculate the price subsidies, based on clear determination of the volume, cost price, freight, specific subsidy level for each kind of goods according to the prescribed regime.

2.3. For administrative and public-service expenditures:

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- To arrange estimates of expenditures on education and training, science and technology, environment according to the 2nd plenum of the Party Central Committee ( VIIIth Party Congress); ensuring the 2002 State budget expenditures throughout the country (including investment expenditure, regular expenditures, expenditures from aid and loan sources, increased-wage expenditures) for the education and training sectors at the level of 15%, science, technology and environment at 2%, of the total State budget expenditure, and at the same time adjust the expenditure structure and the policy of expenditure management in an efficient and practical manner. For the culture and information domain, the expenditure shall be arranged according to the resolutions of the 5th plenum of the Party Central Committee (VIIIth Party Congress).

- To arrange with priority the expenditure estimates for healthcare, physical training and sports in a rational and thrift manner, strictly scrutinizing tasks and programs in order to ensure efficient operations, allocate adequate funding for the implementation of policies and regimes already promulgated by competent authorities.

- Economic expenditures should be concentrated on a number of central and key domains; each branch and each locality should study and adjust the spending structure, ensuring high efficiency, thus contributing to promoting the economic restructuring, supporting the development of agricultural production, ensuring the maintenance and repair of key socio-economic infrastructures.

- To arrange estimates of administrative expenditures (State management, Party, mass organizations): Calculating the correct norms prescribed in the spending regimes, practicing absolute thrift on such expenditures as those on guest reception, conferences, outbound and inbound delegations.

- For spending tasks financed with loan and/or aid capital sources, the detailed estimates must be elaborated according to each project and the Vietnamese parties reciprocal capital must be calculated adequately according to commitments and prescribed regimes.

- In 2002, to effect the transformation of some units with revenues into self-financing units; experiment the package financial revenue and expenditure assignment for activities of Vietnam Television Station under the Prime Minister’s Decision No.87/2001/QD-TTg of June 1, 2001.

- In the course of calculating expenditure estimates of administrative and/or public-service units with revenues, it is necessary to report fully on the tasks of spending from charge, fee and other collection sources, which are allowed to be retained according to the current prescribed regime.

2.4. For expenditures on implementation of target programs:

For national target programs: the funding allocation, the performance of tasks and the implementation of management mechanism shall comply with Decision No.38/2000/QD-TTg of March 24, 2000, Decision No.71/2001/QD-TTg of May 4, 2001 of the Prime Minister and Circular No.41/2000/TT-BTC of May 19, 2000 of the Finance Ministry.

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III. IMPLEMENTATION ORGANIZATION

1. The ministries and State bodies shall, according to their assigned functions, have to draw up socio-economic norms of the fields under their respective management and notify them to the Finance Ministry, other ministries, centrally-run agencies and localities before the time of making State budget estimates as provided for in documents guiding the implementation of the State Budget Law, for use as basis for the estimation of the 2002 State budget.

2. The ministries and centrally-run agencies, which manage the national target programs and the project on planting 5 million hectares of new forests, shall coordinate with the Ministry of Planning and Investment and the Finance Ministry, and work with concerned ministries, centrally-run agencies and localities on the tasks and the 2002 funding estimates for the national target programs and the project on planting 5 million hectares of new forests under their respective management.

3. The ministries, centrally-run agencies and the People’s Committees of the provinces and centrally-run cities shall base themselves on this Circular and the planned assignment of 2002 State budget revenue and expenditure estimates notified by the Finance Ministry for implementation, to guide and announce the inspected figures, organize discussions and sum up the 2002 State budget estimates strictly according to the provisions of this Circular.

4. The Finance Ministry shall organize working sessions with the ministries, centrally-run agencies and localities for discussions on the 2002 State budget estimates from mid-August 2001 (the detailed working schedule shall be notified later).

5. The General Department of Customs, the General Department of Tax shall have to provide detailed guidance on this Circular to their units for implementation and the sum up of State budget revenue and expenditure estimates for the fields assigned to them.

6. Regarding set forms and tables for elaboration of and report on, the 2002 State budget revenue and expenditure estimates:

- For the ministries, centrally-run agencies, they shall guide their units in elaborating and reporting on the elaboration of State budget estimates; on that basis, sum up and report to the Finance Ministry on their own 2002 State budget estimates according to forms and tables prescribed in Circular No.103/1998/TT-BTC of July 18, 1998 of the Finance Ministry.

- For localities: For the sum up and submission to the National Assembly of the 2002 State budget revenue and expenditure estimates for all four budget levels (central, provincial, district and commune), the provincial and municipal People’s Committees are requested to direct and guide their subordinate local administrations in elaborating budget revenue and expenditure estimate fully according to set forms and tables prescribed in Circular No.103/1998/TT-BTC of July 18, 1998 of the Finance Ministry and sum up the 2002 budget revenue and expenditure estimates of commune and equivalent levels according to set forms and tables for sum-up and report to the Finance Ministry. For set forms and tables on report on budget revenue and expenditure estimates of the provinces and centrally-run cities, issued together with Circular No103/1998/TT-BTC of July 18, 1998 of the Finance Ministry, they are requested to add the column on 2000 settlement norms and data and amend (Appendix 1: Tables 1, 2,7; Appendix 6: Tables 6, 17, 18) according to the enclosed appendixes; requested to report on the implementation of target programs and the increased wage funds according to enclosed appendixes.

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FOR THE FINANCE MINISTER
VICE MINISTER




Pham Van Trong