Vietnam’s Decree No. 93/2018/ND-CP: Provincial government’s repayment of debts

Payment of interest, fees and charges relating to loans of a provincial government

- Based on the provincial government’s budget estimate decided by the Provincial People’s Council and its due debts, the Provincial Finance Department shall cooperate with the Provincial State Treasury to use the provincial-government budget to pay interest, fees and charges relating to loans of that provincial government.

- In case the sum of interests, fees and charges payable by the provincial government exceeds its approved budget estimate, the Provincial Finance Department shall aggregate amounts payable, propose solutions and report to the Provincial People's Committee, or the standing board of the Provincial People’s Council or the Provincial People’s Council for adjusting the provincial-government budget estimate as regulated by the Law on state budget.

Payment of loan principal by a provincial government

- Funds used for paying loan principal by a provincial government shall follow regulations in Article 5 of Decree No. 163/2016/ND-CP of Vietnam’s Government, including:

+ Annual amounts borrowed for repaying loan principal as decided by the National Assembly or the Provincial People’s Council;

+ Estimated surplus of the provincial-government budget;

+ Actual surplus of the provincial-government budget as prescribed in Clause 1 Article 72 of the Law on state budget of Vietnam;

+ Increase in budget revenue and decrease in budget expenditures as prescribed in Clause 2 Article 59 of the Law on state budget.

- Based on allocated funds and due debts, the Provincial Finance Department shall cooperate with the Provincial State Treasury to use the provincial-government budget to pay loan principal amounts as regulated.

- In case total loan principal payable by the provincial government exceeds planned funds, the Provincial Finance Department shall aggregate amounts payable, propose solutions and report to the Provincial People's Committee, or the standing board of the Provincial People’s Council or the Provincial People’s Council for adjusting the provincial-government budget estimate as regulated by the Law on state budget.

- If borrowed fund is used for repaying the loan principal, partial or entire provincial-government budget for covering development investment expenditures may be converted as follows:

+ The planned borrowed funds for repaying loan principal shall be subtracted from the estimated budget for covering development investment expenditures before it is allocated;

+ After the loan principal is fully paid, funds for covering development investment expenditures shall be returned to be allocated to investment projects. If an application for loan is refused or the approved loan is not enough to pay debt, the fund for covering development investment expenditures shall be reduced for making up the deficit (the provincial government must reduce budget deficit or increase its estimated budget surplus to have funds for repaying loan principal).

More details can be found in Decree No. 93/2018/ND-CP of Vietnam’s Government, which takes effect from July 01, 2018.

-Thao Uyen-

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