Vietnam: What is an off-budget financial fund? Is the off-budget financial fund supported by the state budget?
What is an off-budget financial fund in accordance with the Law on State Budget of Vietnam?
Pursuant to the provisions of Clause 19 Article 4 of the Law on State Budget in 2015 (guided by Article 12 of Decree 163/2016/ND-CP) as follows:
Article 4. Interpretation of terms
In this Law, the terms below are construed as follows:
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19. Off-budget financial fund means a fund established by a competent authority and independent from state budget; its revenues and obligatory expenditures are meant to fulfill certain tasks prescribed by law.
In addition, based on the provisions of Point h, Clause 1, Article 47 of the Law on State Budget in 2015 is as follows:
Article 47. Documents about state budget estimate and budget allocation plan
1. Documents about state budget estimate and budget allocation plan submitted by the government to the National Assembly include:
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h) Report on implementation the financial plan, formulate next year’s financial plans of off-budget financial fund under the management of central agencies;
At the same time, pursuant to clause 7, Article 65 of the Law on State Budget in 2015 (guided by Article 44 of Decree 163/2016/ND-CP)):
Article 65. Requirements applied to state budget statement
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7. Budget statements of off-budget financial funds must be enclosed with explanation and assessment of result, efficiency of performance of their tasks.
Thus, an off-budget state financial fund (hereinafter referred to as an extra-budget financial fund) is a fund established by a competent agency that decides to establish and operate independently of the state budget, revenue sources and expenditure tasks of the fund to perform tasks as prescribed by law.
The financial fund will also be submitted to the state budget estimate and the budget allocation plan according to regulations and comply with the budget settlement requirements as prescribed.
Vietnam: What is an off-budget financial fund? Is the off-budget financial fund supported by the state budget?
Is the off-budget financial fund supported by the state budget of Vietnam?
According to the provisions of Clause 11, Article 8 of the Law on State Budget in 2015 (guided by Article 12 of Decree 163/2016/ND-CP) as follows:
Article 8. Rules for state budget management
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11. State budget does not cover operating costs of off-budget financial funds. An organization only has its charter capital supported by state budget within the capacity of state budget and only when the conditions are satisfied: the organization is established and operating in accordance with law, financially independent, and sources of revenue and obligatory expenditures do not coincide with those of state budget.
Thus, off-budgetary financial funds will not be supported by the state budget for operating expenses.
However, depending on the capacity of the state budget, competent officials may consider supporting charter capital from the state budget for off-budget financial funds.
The consideration of charter capital support for off-budgetary financial funds must meet the following conditions:
(i) Be established and operate in accordance with the provisions of law;
(ii) Be financially independent;
(iii) Having revenue sources and expenditure tasks that do not coincide with revenues and expenditure tasks of the State budget.
In what circumstances is the provision of the state budget implemented in Vietnam?
* In case of temporary state budget grant:
- Pursuant to the provisions of Clause 1, Article 51 of the 2015 Law on State Budget as follows: In case at the beginning of the budget year, the budget estimate and budget allocation plan have not been decided by the National Assembly, the People's Council, financial agencies and State Treasury agencies at all levels according to the function of temporary budget allocation for spending tasks cannot be delayed until the budget estimate is decided by the competent authority:
+ Salary expenditures and items of a salary nature;
+ Professional expenses and civil service fees;
+ Balanced additional expenditures for subordinate budgets;
+ A number of other necessary expenditures to ensure the operation of the state apparatus, except for the procurement of equipment and repairs;
+ Expenditures on transitional projects under national target programs and projects of national importance; other important and urgent transitional investment projects to overcome the consequences of natural disasters, disasters and epidemics.
* The maximum monthly temporary allowance for the tasks specified at Points a, b, c and d, Clause 1 of this Article shall not exceed the average expenditure of 01 month of the previous year (Clause 2, Article 51 of the Law on State Budget in 2015).
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