Notable new policies of Vietnam to be effective as of the start of November 2022

Amendments to conditions for practice vehicles of driver training institutes; regulations on the management cost of social insurance and health insurance; regulations on reports on the status of financial autonomy of public service providers are new and notable contents that will come into force as of the start of November 2022 (from November 1 to November 10, 2022).

1. New regulations of Vietnam on the management cost of social insurance, unemployment issuance, and health insurance 2022-2024

This is the content specified in Decision No. 19/2022/QD-TTg on the management cost of social insurance, unemployment insurance, and health insurance 2022-2024, which comes into force as of November 10, 2022.  

According to the Decision, the management cost of social insurance (including occupational accident and disease insurance) and unemployment insurance shall comply with Clause 1 Article 1 of Resolution No. 09/2021/UBTVQH15.

The management cost of health insurance according to the Law on Average Health Insurance 2022-2024 is up to 3,5% of the health insurance premium, deducted from the health insurance fund;  

Specifically, the management cost is up to 3,55% in 2022, 3,5% in 2023, and 3,45% in 2024.

Estimates of the annual management cost of health insurance are determined according to the cost rate prescribed in this Clause calculated on estimates of the collection of annual health insurance premiums.

2. New regulations of Vietnam on reports on the status of financial autonomy of public service providers

On September 16, 2022, the Minister of Finance of Vietnam promulgated Circular No. 56/2022/TT-BTC on guidelines on the contents of financial autonomy mechanisms of public service providers; handling of property and finance in the event of reorganization or dissolution of public service providers, which comes into force as of November 1, 2022.  

According to the Circular, guidelines on regulations on periodic reports are as follows:

- Public service providers implementing financial autonomy shall annually submit reports on the result of such implementation to superior management agencies (ministries, central agencies, or People's Committees of provinces or districts according to their management decentralization) for summary according to regulations prescribed in Clause 4 Article 38 of Decree No. 60/2021/ND-CP before February 28 of the following year (according to Appendix No. 6 promulgated with Circular No. 56/2022/TT-BTC).

- Ministries, central agencies, and People’s Committees of provinces shall annually organize the assessment of the implementation of the financial autonomy of public service providers according to regulations prescribed in Clause 5 Article 36 and Clause 5 Article 37 of Decree No. 60/2021/ND-CP and submit reports to the Ministry of Finance of Vietnam before March 31 of the following year (according to Appendix No. 7 promulgated with Circular No. 56/2022/TT-BTC).

- The Ministry of Finance of Vietnam shall summarize periodic reports on the implementation of financial autonomy of public service providers of ministries, central agencies, and local authorities for management and submission of reports to the Government of Vietnam or the Prime Minister of Vietnam as per regulation.

- If the Government of Vietnam or the Prime Minister of Vietnam stipulates the specific report submission deadline, comply with the regulations of the Government of Vietnam or the Prime Minister of Vietnam.

- The time to finalize the data of annual reports as prescribed in Circular No. 56/2022/TT-BTC is from January 1 to the end of January 31 of the following year.

3. New regulations of Vietnam on practice vehicles of driver training institutes

Decree No. 70/2020/ND-CP on amendments to Decrees related to road business activities, which comes into force as of November 1, 2022.

Decree No. 70/2020/ND-CP provides amendments to conditions related to practice vehicles of driver training institutes prescribed in Decree No. 65/2016/ND-CP (amended by Decree No. 138/2018/ND-CP).

Specifically, amendments to conditions for practice vehicles are as follows:  

- Have practice vehicles of all classes under the legal use right of driver training institutes with practice vehicle licenses issued by competent agencies;

In case driver training institutes have driving test services, based on the time of using test vehicles for driving tests, it is allowed to use test vehicles for driver training, but the number of test vehicles used for training shall not exceed 50% of the total number of test vehicles;

- Trucks used for driver training of B1 and B2 classes shall have a tonnage of at least 1.000 kg with a quantity not exceeding 30% of the total number of test vehicles in the same class of driver training institutes.

Additionally, compared to current regulations, Decree No. 70/2020/ND-CP has annulled conditions for practice vehicles prescribed in Point b Clause 2 Article 6 of Decree No. 65/2016/ND-CP.

4. The Ministry of Finance of Vietnam to provide guidelines on the content of pre-feasibility study reports on traffic BOT projects

Circular No. 22/2022/TT-BGTVT on guidelines on the contents of pre-feasibility study reports and feasibility study reports on investment projects according to methods of public-private partnership or types of construction - business - transfer contracts in transport, which comes into force as of November 1, 2022.

The Circular provides guidelines on the revenue framework on the equity of investors.

For example, the cost of using equity with risk factors and inflation is determined according to the following formula:

i = iv + f

Specifically:

i: the cost of using equity of investors;

iv: the interest on loans for mobilizing investment capital determined based on the reference interest rates for medium and long-term loans of at least 3 commercial banks; interest on capital loans of similar projects as the basis for preparing financial schemes in pre-feasibility study reports and feasibility study reports (if any).

Interests on loans for mobilizing investment capital are determined within 3 months before the preparation of pre-feasibility study reports and feasibility study reports;

f: inflation rate determined based on the average CPI of the last 10 years according to the General Statistics Office of Vietnam, with consideration for excluding years with high CPI fluctuations.

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