Three principles of advances and loans from the State Treasury of the state budget

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Circular 23/2020/TT-BTC stipulates that in cases where the central budget fund, or the provincial budget fund faces temporary shortages, advances from the state treasury are allowable. The provincial budget is permitted to advance from the state treasury; however, the advance and borrowing from the state treasury of the state budget must adhere to the following principles:

- The advance and borrowing of the state budget from the state treasury are only to be executed within the capacity of the temporarily idle state treasury; ensuring it does not affect the payment capability of the State Treasury and conforming to the limit of temporarily idle state treasury advances for the state budget, executed according to the order of priority:

- Advance and borrow state treasury for the central budget.- Advance state treasury for the provincial budget.

- All advances from the state treasury to address temporary shortages of the central budget fund, or the provincial budget fund must be fully repaid no later than December 31 of the year in which the advance arises; extensions are not permitted.

- The advance and borrowing of the central budget from the state treasury are conducted at the State Treasury; the provincial budget advances from the state treasury are carried out at the provincial State Treasury.

Additionally, the Circular specifies that the advance and borrowing of the central budget from the state treasury aims to:

For the central budget:

- Advance from the state treasury to handle temporary shortages of the central budget fund.- Borrow from the state treasury to cover the central budget deficit for development investment within the deficit levels of the central budget annually decided by the National Assembly.- Borrow from the state treasury to repay the principal of the central budget loans within the principal repayment levels of the central budget annually decided by the National Assembly.

For the provincial budget: Advance from the state treasury to address temporary shortages of the provincial budget fund.

Details can be found in Circular 23/2020/TT-BTC, effective from June 01, 2020.

Le Hai

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