RESOLUTION

ON NATIONAL 5-YEAR FINANCIAL PLAN IN 2016-2020 PERIOD

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;

Upon the consideration of the Report No. 453/BC-CP dated October 18, 2016; the Inspection report No. 179/BC-UBTCNS14 dated October 19, 2016 by the Finance and Budget Committee; the Report No. 48/BC-UBTVQH14 dated November 08, 2016 by the Standing committee of the National Assembly of the Socialist Republic of Vietnam and the National Assembly’s enquiry reports,

RESOLVES:

Article 1. General objectives

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Article 2. Specific objectives

1. Total revenues of the State budget in the 2016-2020 period is VND 6,864,000 billion, increasing 1.65 times in comparison with that of the 2011-2015; ensure that the rate of revenues to the State budget is not under 23.5% GDP where revenues from taxes, charges and fees account for 21% GDP; domestic revenues account for 84% to 85% of total revenue of the state budget.

2. Gradually conduct the restructuring of the spending of the State budget in a positive direction. Total spending of the state budget in the 2016 - 2020 period is VND 8,025,000 billion, where the development investment accounts for 25% to 26% of total spending of the state budget; recurrent expenses reduces to under 64% of total spending of the state budget; prioritize the payment of debts and the expenditure on national reserve.

The investment in the development of the state budget in the 2016-2020 period shall not exceed VND 2,000,000 billion. Where the spending contains VND 260,000 billion from the Government bond sources (including VND 60,000 billion remaining from the estimate for 2014 - 2016 period), VND 300,000 billion from foreign investments, VND 250,000 billion from the sale of the state capital of several enterprises (including VND 10,000 billion estimated for making up for the decrease of revenues of the central government’s budget which has not been used). VND 1,800,000 billion shall be distributed. The remaining amount (10%) of the estimates which has not been distributed shall be used for handling the risks in revenue collection and urgent requirements pertaining to investment in direction. Depending on actual conditions, the distribution for development investment shall be decided in the annual national budget estimates.

3. The rate of the State budget deficit of the 2016-2020 period shall not exceed 3.9% GDP, where the deficit of central government’s shall not exceed 3.7% GDP and the deficit of the local government’s budget shall not exceed 0.2% GDP. Reduce as much as possible the State budget deficit to not exceeding 3.5% GDP by 2020 to balance the State budget, ensure that public debts are within the limit.

4. Ensure the security of public debts, so that:

a) The annual public debts do not exceed 65% GDP, the government debts do not exceed 54% GDP and external debts do not exceed 50% GDP.

b) The obligation to pay external debts is under 25% of total export turnover.

c) The Government’s obligation to pay debt directly (excluding the on-lending debts) does not exceed 25% of total annual revenue of the state budget.

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1. Regarding the State budget revenues: policies on revenue collection shall be amended and supplemented to increase the amount of mobilized GDP to the state budget, ensure the amount of domestic revenue not below the abovementioned level, suitable for the development of Vietnam. Ensure a reasonable ratio between the directly and indirectly collect amount of tax payment; increase the amount of domestic revenues; reduce the amount rate of revenues from crude oil, resources, importation and exportation; utilize effectively revenues from dividends and interests from the state capitals in enterprises. Reduce the tariff rates according to free-trade agreements or other international agreements who which Vietnam is a signatory. Enhance the application of measures for fighting against loss of revenues from tax, reduce significantly tax collection and state budget revenues. Minimize the promulgation of new policies which lead to the decrease of the State budget revenue.

2. Regarding the state budget spending: the structure between the accumulation and consumption shall be kept acceptable, the spending on development investment shall be increased and the recurrent expenses shall be reduced, the expenses on human, social security and national defense and security shall be ensured. Ensure that 20% of the total spending of the state budget is on education and training and 2% other is on science and technology. There shall be preferential policies for people meritorious to the revolution.   The base salary, retirement pension and preferential policies for meritorious people shall be increased by about 7% per year in average. Specific increase shall be decided by National Assembly in the annual state budget estimates, depending on the actual conditions.

3. Regarding the State budget deficit: the rate of the State budget deficit shall be reduced significantly so that the abovementioned objectives are fulfilled. Public debts shall be restructured in a way that the external debts are reduced and the domestic debts are increased. Bond market shall be developed, the issuance of international bonds shall be reduced, most of Government bonds shall have duration exceeding 5 years, the average duration of Government bonds issued in the 2016 - 2020 period shall be increased to 6 to 8 years.

Article 4. Tasks and their implementation

1. Boost the completion of national system of financial regulations and mechanisms to continue the detailing of the Constitution, ensure the consistency, transparency, stability and conformity with the requirements arising during the socio-economic development of Vietnam and the international integration. Carry out the restructuring of the State budget revenue and spending according to the provided objectives and orientation. Gradually manage the budget according to the results of the implementation of the tasks; establish statistics of the budget according to the practices and international standards. Implement effectively measures to ensure the security and safety of national finance; reduce as much as possible the state budget deficit.

2. Take measures for adjusting collection policies in an orientation towards the expansion of tax bases, adjusting scope and entities; reviewing and limiting the eligibility to tax exemption or reduction; considering the addition of taxes on properties according to the actual conditions of Vietnam. Minimize the combination of social policies in law on taxation. Review preferential policies that have influence on the State budget revenues.

3. Implement effectively regulations on innovation in the management of the state budget according to the Law on State budget, arrange expenditure, practice thoroughly economy, prevent extravagance, increase the career revenues; must not promulgate policies, programs or projects if the capital sources are not balanced; tightly control the estimate advances, expenditure forwarding or spending from the state budget provisions. Tight implement fiscal policies in combination with monetary policy.

4. Strictly comply with financial disciplines in the state budget collection and spending. Intensify the inspection and audit to avoid loss of revenue, prevent commercial fraud, price transfer and tax evasion and prevent loss or extravagance in the spending of the State budget, especially on fundamental construction. Actively expedite and conduct the handling of tax arrears and State budget revenues; minimize the amount of tax arrears. Strictly and promptly impose penalties for violations against regulations on the management, collection and use of the State budget, increase the responsibility of heads of regulatory bodies and local agencies in the management of the state budget. Reduce spending specified in the estimates which are unnecessary or implemented slowly; minimize source forwarding to December 31^st of every year to tightly control the deficit and the ceiling public debt of every year.

5. Implement drastically and consistently mechanisms and policies related to the innovation of financial mechanism for public service providers, boost the adjustment of prices of public services towards the sufficient calculation of costs, contributing in the increase of the self-control of units; establish plans on the application of market price in education and healthcare associated with support to beneficiaries of incentive policies, facilitate the restructuring of the spending of the State budget, make provision to serve the improvement of wages and enhance the downsizing of payroll and the restructuring of the organization.

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7. Keep public debts in the acceptable limit; minimize the issuance of Government guarantees for new debts; tightly control the deficit and debts owed by local government; allocate capital sources to ensure the sufficient and conformable payment of debts. Must not convert on-lending loans or government-guaranteed loans into state budget allocation. Must not use the State budget to carry out the restructuring of state-owned enterprises, handle bad debts of state-owned commercial banks, provide charter capitals for commercial credit institutions or contribute to international financial institutions. New debts shall be owed only when sufficient assessment on the scope of public debt and the medium-term solvency.

Mobilize Government bonds shall ensure the rate of publication of Government bonds having term of not less than 5 years at least 70% of total amount of Government bonds to answer to the requests for capital mobilization for the State budget and concurrently ensure the extension of time limit of the debt portfolio and the risk management.

8. Complete the legal system for financial market, insurance and accounting and audit services; increasing the effectiveness of financial resources in the management and use of public properties; speed up the international integration in financial sector; complete the legal system pertaining to public debt management towards reasonable adjustment of the scope of public debt in conformity with international practice and the actual situation of Vietnam.

9. Enhance the innovation of administrative procedures in financial sector. Carry out the modernization of national finance management by boosting the application of information technology and the establishment of national financial database system. Enhance and increase the transparency of information about finance and budget according to regulations. Reduce the time for administrative procedures related to taxation and customs.

Article 5. Organization of implementation

1. The Government, Ministries, central government’s agencies and local government’s agencies shall, within their functions and tasks, implement effectively this Resolution.

2. 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 supervise the implementation of this Resolution.

3. The Central Committee of Vietnamese Fatherland Front and its members and social organizations established according to law shall, within their responsibility, supervise and encourage people from all social strata to implement this Resolution.

This Resolution has been ratified in the 2nd Meeting Session of the 14th National Assembly dated November 09, 2016.

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CHAIRMAN OF NATIONAL ASSEMBLY




Nguyen Thi Kim Ngan