Five-Year Financial Planning

The content of the 5-year financial plan shall be implemented according to the provisions of Article 8 of Decree 45/2017/ND-CP by the Government of Vietnam (Decree 45), including: The national 5-year financial plan implemented according to the provisions of Clause 1, Article 8 of Decree 45.

The 5-year financial plan for provinces and centrally run cities (referred to as the local 5-year financial plan) shall be implemented according to the provisions of Clause 2, Article 8 of Decree 45, in which: The content evaluates the implementation status of the key objectives, indicators, and tasks in the local 5-year financial plan of the previous period to clarify accomplished results, limitations, weaknesses and the causes of these limitations and weaknesses, and lessons learned from practical experience.

The content for determining overall objectives, specific major objectives regarding the local 5-year state financial-budget after-period must clarify: the principles and priorities in budgeting and allocation linked to the goals, tasks, and solutions for the 5-year plan for socio-economic development according to the resolutions of the Provincial Communist Party Congress and the Provincial People's Council, suitable with the local socio-economic development strategies and sectoral development strategies approved by the competent authorities during the same period; detailed objectives concerning revenue and revenue structure, expenditure and expenditure structure, budget deficit tied to the capacity for borrowing funds to cover the deficit and debt management goals of the locality.

The content for determining the local budget balance framework includes: Forecasting key macroeconomic indicators as a basis for planning, including: growth of Gross Regional Domestic Product (GRDP), Consumer Price Index (CPI), growth of production sectors, industries, and the prices of products and goods that significantly affect state budget revenue in the locality; orientation of revenue, expenditure, and state budget balance, local budget during the 5-year plan period, including forecasting resources for budget revenue, borrowing capacity to cover deficits, and borrowing to repay principal of state budget and local budget debt.

The sequence of preparing 5-year financial plans as stipulated in Article 9 of Decree 45, specifically: For the national level 5-year financial plan, implementation is according to Clause 1, Article 9 of Decree 45. For the local level 5-year financial plan (provinces and centrally run cities), implementation is according to Clause 2, Article 9 of Decree 45.

Before May 15 of the fourth year of the previous 5-year financial plan period, based on the directive from the Prime Minister of the Government of Vietnam and guidance from the Ministry of Finance and Ministry of Planning and Investment on preparing the financial plan for the following 5-year period, the Provincial People's Committee shall direct the Department of Finance to take the lead, cooperate with the Department of Planning and Investment, and relevant local agencies to preliminarily assess the implementation status of the goals and tasks of the previous 5-year financial plan and outline principal issues to be noted for the next 5-year financial plan; based on that, issue a directive from the Provincial People's Committee on preparing the local 5-year financial plan for the subsequent period.

This Circular is effective from August 22, 2017, and applies from the 2017 budget year.

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