How to implement the estimation of balanced expenditure for the local budget when estimating the local budget in Vietnam from August 30, 2024?
How to implement the estimation of balanced expenditure for the local budget when estimating the local budget in Vietnam from August 30, 2024?
Based on Clause 2, Article 22 of Circular 49/2024/TT-BTC on the construction of budget estimates for local government budget balances, People's Committees at all levels shall be proactive in the following matters:
In 2025, continue to stabilize the rate of allocation of divisible revenues and balance sheet supplements from the Central Budget to the local budget as in 2024.
Construct the local government budget estimate based on the expected revenues following the decentralization, the balance supplement from Central Budget to local budget determined by the assigned estimate in 2024 (if any), and the supplement from Central Budget to local budget for the implementation of salary reform in 2025 (if any).
- Based on the objectives of the socio-economic development plan for the entire 2021-2025 period, particularly the targets and tasks for local socio-economic development in 2025;
- Estimating the implementation of local budget revenue and expenditure tasks in 2024 to construct detailed local budget expenditure in each field according to the provisions of the 2015 Law on State Budget, ensuring prioritization of sufficient budget allocations for committed projects, tasks, and policies.
Additionally, the following main contents are implemented:
(i) Allocating budget estimates for salary reform funding sources according to Resolution 27-NQ/TW 2018 and accompanying guidelines (if any).
(ii) On constructing the local budget investment and development budget estimate:
- Based on the provisions of the 2015 Law on State Budget; Resolution 973/2020/UBTVQHM; constructing the 2025 investment and development budget estimate, detailing the local budget balance sources (comprising domestic centralized capital construction investment, investment from land levy revenues, lottery revenues, and local budget overdrafts (if any); budget estimates for projects using foreign capital (loans, aid).
- Allocate sufficient matching funds belonging to local responsibilities, budget for full and prompt repayment of local budget loans when due. Allocate sufficient capital for regional, important projects with spillover effects that the locality has committed according to regulations; allocate sufficient capital to repay all debts due within the five-year plan, recover the entire remaining advance funds within the 2021-2025 medium-term public investment plan.
- Entrust local budget capital through the Social Policy Bank to support implementing some activities under national target programs as per Clause 6, Article 4 of Resolution 111/2024/QH15.
- Allocate investment and development budget estimates from land levy revenues, prioritizing investment in socio-economic infrastructure, the National Target Program on New Rural Development.
- For lottery revenues: Local authorities estimate real lottery revenues (including revenues from computerized lottery activities) and continue using the entire revenue from lotteries for investment and development, prioritizing investment in education - training, vocational training (including purchasing teaching equipment for the new general education curriculum) and health;
The remainder is allocated for essential and urgent development investment tasks under the local investment portfolio, the National Target Program for New Rural Development.
- Use revenues from casino entry fees:
+ Local authorities authorized by competent agencies to allow Vietnamese nationals to play at casino business locations,
+ Use the revenue from casino entry fees for social welfare, community service, ensuring security, social order, allocating a minimum of 60% for education, training, vocational training, and health as stipulated in Clause 3, Article 5 of Circular 102/2017/TT-BTC.
(iii) Interest payments, fees, and other expenses:
Construct budget estimates as a separate expense item in the local budget balance, ensuring full and prompt payment of due debts;
Accompanied by detailed explanations for each loan source (if any), including foreign loans borrowed by the Government of Vietnam for local re-lending, development credit, and local government bond issuance.
(iv) Additional contributions to the local financial reserve fund: determined by the assigned estimate of 2024.
(v) local budget contingencies arranged as per the Law on State Budget (from 2-4% of the total local budget balance expenditure - excluding the local budget deficit).
(vi) On constructing the regular expenditure budget estimate for the local budget:
+ After allocating funds for salary reform (if any);
+ Investment and development balance local budget; interest payments, fees, and other expenses;
+ Additional contributions to the financial reserve fund; local budget contingencies as above;
+ The remaining local budget balance will be allocated for regular expenditures.
Local authorities organize the implementation of reducing estimates for state agencies and public service providers based on streamlining staff, reorganizing apparatus, and renovation of public service providers in 2025, based on cumulative results until 2024, targets of Resolution 18-NQ/TW 2017, Resolution 19-NQ/TW 2017, and Decree 60/2021/ND-CP, separately determining downsizing based on authority staff allocation decisions (if any).
The above is guidance on implementing the construction of the local budget balance budget estimate when building the local budget budget estimate from August 30, 2024
How to implement the estimation of balanced expenditure for the local budget when estimating the local budget in Vietnam from August 30, 2024? (Internet image)
How is the construction of Budget Estimation for salary reform in Vietnam carried out?
Based on Clause 4, Article 22 of Circular 49/2024/TT-BTC stipulating that in 2025, the mechanism of creating salary reform funding to carry out salary reform continues to be implemented according to regulations.
In which:
+ Local authorities continue to implement a mechanism to save 10% of regular expenditures (excluding wages, allowances calculated on wages, wage-based expenditures, and expenditures for individuals as per policies);
+ Local revenue increase sources (excluding land levy, lotteries, equitization, and divestment of state-owned enterprises managed by local authorities);
+ Excluded items as per Clause 2, Article 3 of Resolution 34/2021/QH15, including 70% of the realized revenue increase in 2024 compared to the 2024 estimate, 50% of the estimated revenue increase in 2025 compared to the 2023 estimate assigned by the Prime Minister of the Government of Vietnam;
50% of the funds allocated from reducing regular activity support in administrative areas and supporting public service providers as proposed by localities under Directive 17/CT-TTg 2024;
+ Remaining funds for salary reform from 2024;
+ Revenue retained as per policies in 2025.
When does Circular 49/2024/TT-BTC come into effect in Vietnam?
According to Article 29 of Circular 49/2024/TT-BTC:
Effective Date
1. This circular takes effect from August 30, 2024, and applies to the process of constructing the 2025 state budget estimate and the 2025-2027 three-year financial - state budget plan. The content, process, and timing of constructing the 2025 state budget estimate and the 2025-2027 three-year financial - state budget plan are carried out according to the provisions of the Law on State Budget, its guiding documents, and this circular.
2. During the process of constructing the 2025 state budget estimate and the 2025-2027 three-year financial - state budget plan, if any organizational difficulties arise, central ministries, agencies, local authorities, economic groups, and state corporations should report to the Ministry of Finance for prompt resolution.
Circular 49/2024/TT-BTC takes effect in Vietnam from August 30, 2024, and applies to the process of constructing the 2025 state budget estimate and the 2025-2027 three-year financial - state budget plan.
* Note: The content, process, and timing of constructing the 2025 state budget estimate and the 2025-2027 three-year financial - state budget plan are carried out according to the provisions of the Law on State Budget, its guiding documents, and the directions in Circular 49/2024/TT-BTC.
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