Circular 107: Content on debt repayment of central budget in Vietnam

Circular 107: Content on debt repayment of central budget in Vietnam (Illustrated image)

Circular 107/2008/TT-BTC stipulates the content of debt repayment of central budget as follows:

Domestic debt repayment in Vietnam:

- For bonds issued by the Government of Vietnam (including retail, auction, guaranteed, large-lot issuance, special bonds), Treasury bills, national construction bonds; auction issuance fees through the stock market and underwriting fees; payment fees for securities depository centers; budgetary control is not applied to each payment, but it must be ensured within the total debt repayment estimate of the central budget approved by the National Assembly annually. In case the debt repayment demand exceeds the approved annual total debt repayment estimate of the central budget, the State Treasury shall report to the Ministry of Finance for consideration and decision.

- Based on mission requirements, the State Treasury disburses funds for payment while accounting for debt reduction (for principal debt repayment) and expenditure (for interest and fees repayment) of the central budget as stipulated in point b clause 5 Section II of this Circular.

- For issuance and payment fees of bonds and national construction bonds directly issued through the Treasury system (retail), the State Treasury is entitled to the fees as regulated, and the Ministry of Finance allocates the budget and disburses funds through payment orders according to current regulations.

- For other domestic debts directly borrowed, monitored, and managed by the Ministry of Finance, repayment is made through payment orders according to current regulations. Based on the Ministry of Finance's payment orders, the State Treasury disburses funds for payment while accounting for debt reduction (for principal debt repayment) and expenditure (for interest and fees repayment) of the central budget as stipulated in point b clause 5 Section II of this Circular.

Foreign debt repayment in Vietnam:

- Budgetary control is not applied to each foreign debt repayment, but it must be ensured within the total foreign debt repayment estimate of the central budget approved by the National Assembly annually.

- Based on payment requirements, 7 working days before the due date (except in cases where the creditor's notice is required to determine the payable amount), the Ministry of Finance issues a payment order, attaching the repayment schedule and related documents (if any) sent to the State Treasury for accounting into Tabmis, where the loan is reduced, and the central budget expenditure is accounted for as stipulated in point b clause 5 Section II of this Circular, and funds are disbursed for payment to the beneficiaries according to regulations.

More details can be found in Circular 107/2008/TT-BTC, effective from December 18, 2008.

Ngoc Tai

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