Vietnam: Making annual state budget estimates must meet statutory requirements

1. Basis for making annual state budget estimates

According to Article 41 of the Law on State Budget 2015 of Vietnam, the making annual state budget estimates shall be based on the following basis:

- Socio-economic development, national defense, security, diplomatic objectives, and gender equality.

- Specific objectives of Ministries, ministerial agencies, Governmental agencies, other central regulatory agencies, local agencies, organizations and units.

- Regulations of law on taxes, fees, charges, and regulations on collection of state budget revenues; norms of budget allocation; policies, standards, limits on state budget expenditure.

- Distribution of revenue sources and obligatory expenditures; ratio of revenue distribution and level of additional funding for budget balancing from superior budget to inferior budget.

- Legislative documents promulgated by competent authorities on guidelines for formulation of socio-economic development plans and making of next year’s state budget estimate.

- 5-year financial plans, -year state budget – finance plans, and plans for midterm investment of state budget.

- Last year’s enactment of the state budget.

- Checked estimate of budget revenue and expenditure notified to relevant agencies, organizations, and individuals.

2. Requirements applied to annual state budget estimates

Annual state budget estimates must meet the following requirements:

- State budget estimates must be sorted by revenue, expenditure, ratio of expenditure on development investment, recurrent expenditure, expenditure on national reserve, repayment of loans and aid, additional contribution to financial reserve funds, and budget reserve.

- Budget estimates of budget estimate units at various levels must contain all revenues and expenditures in accordance with the form and schedule prescribed by competent authorities. The budget estimate contains:

+ Budget revenue estimate based on forecast about macroeconomic indicators and relevant criteria, regulations of law on taxes, fees, charges, and collection of budget revenues;

+ Estimate of expenditure on development investment based on planning, plans, programs/projects approved by competent authorities; 5-year financial plans, plans for midterm investment of state budget, ability to balance resources in the budget year, regulations of law on public investment, construction, and relevant regulations of law;

+ Estimate of recurrent expenditures based on given tasks and objectives approved by competent authorities, policies, standards, and limits on expenditures imposed by competent authorities. Regulations of the government shall apply to budget estimates made by regulatory agencies exercising financial autonomy; public service agencies exercising autonomy in terms of task performance, organizational structure, personnel, and finance;

+ Estimate of budget expenditure on education, vocational training, science and technology at the ratio prescribed by relevant regulations of law.

+ Estimate of expenditures on execution of National target programs based on the list of programs and total expenditure in each period decided by the National Assembly; targets, contents, objectives, and details of component projects of each National target program;

+ Estimate of expenditure on repayment of debts that are due in the budget year;

+ Estimate of loans for covering state budget deficit based on state budget balance, capacity of each source, solvency, and safety limits under the National Assembly’s Resolution.

This content is specified in Article 42 of the Law on State Budget 2015 of Vietnam.

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