Guidance on Formulating the 2017 State Budget Estimates

The assessment of the implementation of the State Budget Revenue and Expenditure (NSNN) tasks for 2016 is based on practical grounds, price fluctuations in the market, actual revenue results, future forecasts, and factors affecting the NSNN revenue and expenditure as approved by the National Assembly, People's Councils at all levels.

Implementation Status of Budget Revenue Tasks for 2016:

Firstly, organizing evaluations, analyzing individual causes affecting budget revenue in 2016, such as advantages and disadvantages in production and business activities, import-export; the growth rate of total retail sales of goods and consumer service revenue; the growth rate of industrial production value; the increase or decrease of investment capital from various economic sectors; the capability to access credit for implementing new investment projects, expansion investments, and in-depth investments by enterprises, and the real estate market trends.

Special attention is paid to the price of crude oil, agricultural commodity prices, or natural events such as drought, saltwater intrusion, the marine environmental pollution incidents in some coastal provinces of the North Central region. Moreover, implementation of international economic integration commitments, deployment of key tasks, and solutions to improve the business environment and enhance national competitiveness are considered.

Secondly, evaluating the deployment status and the results of measures relating to the state budget revenue management through tax management activities:

- Reducing corporate income tax rates; amending and supplementing several articles of the Law on Value-added Tax (VAT), the Law on Special Consumption Tax (TTDB), and the Law on Tax Administration; the tax rate schedule for resource taxes;...- The status of tax debt handling and recovery; reviewing and accurately determining tax debts as of December 31, 2015, estimating the arising debts in 2016, the amount of tax debt written off, and the amount of recovered tax debts in 2016, and the amount of tax debt as of December 31, 2016.- The status of VAT declarations, the amount of VAT refunds arising, the projected refund amount for enterprises in 2016, tied to enhancing supervision, inspection, post-refund audits, and handling recovery of wrongly refunded VAT, particularly evaluating the impact on the VAT refund expenditure in 2016 and the NSNN revenue when implementing contents related to VAT deduction and refund in accordance with the law.

Thirdly, the results of coordination between ministries, relevant agencies in the management, resolving difficulties and obstacles in NSNN revenue, selling state assets by auction, auctioning land use rights, and organizing inspection, urging tax debt recovery, combating revenue loss, and transfer pricing; existing issues and solutions for remediation.

Fourthly, results of fee, charge collections, administrative violation fines, other collections, and confiscations in the first 6 months and the whole year 2016 projections.

Implementation Status of Development Investment Expenditure and Regular Expenditure Tasks

In the development investment expenditure, central ministries, agencies, and localities focus on evaluating the relevant contents:

- The arrangement and organization of implementing the development investment expenditure estimates for 2016 for public investment projects, projects utilizing ODA and concessional loans, basic construction;- Assessing the results of development support expenditure tasks through the implementation status of preferential investment credit of the State; credit policies for poor households, near-poor households, newly out-of-poverty households, especially disadvantaged ethnic minority households; student credit; job creation loans, labor export loans; loans for clean water and rural environmental sanitation programs; implementing the national reserve plan for 2016 concerning purchasing, selling, importing, exporting, rotating goods, and national reserve delivery;- Evaluating the regular expenditure tasks, focusing on education, training, vocational training, and healthcare;- Besides, the National Target Programs (CTMTQG), the Target Programs (CTMT) for the 2016-2020 period.

Circular 91/2016/TT-BTC clarifies that 2017 is the second year of the 5-year socio-economic development plan for 2016-2020, the first year of the implementation of the Law on State Budget 2015, and also the first year of the NSNN stabilization period for 2017-2020, thus holding significant importance in achieving the socio-economic development objectives and tasks for the entire 2016-2020 period and the financial strategy goals up to 2020. The construction of the NSNN revenue and expenditure estimates for 2017 is emphasized.

Building 2017 NSNN Revenue Estimates are built according to current policies and laws; comprehensively aggregating tax, fee, charge revenues, and other revenues into NSNN as prescribed by the Law on State Budget 2015; based on precise assessment of the 2016 NSNN revenue capabilities, forecasting investment, production, business development, and trade, import-export activities for 2017, accounting for domestic and international impact factors; specifically calculating the increase or decrease in revenue due to the implementation of newly amended tax laws and international tariff reduction commitments; the increase in revenue from strengthening inspection, audit of tax declarations, tax payments by organizations, individuals, revenue detected through inspection, audits, and increasing revenue from strict measures against revenue loss and collecting outstanding taxes from previous years, revenue from investment projects with expired preferential periods.

Building 2017 NSNN Expenditure Estimates focus on the following contents:

- Building development investment expenditure estimates from the Government of Vietnam bonds and revenue from the lottery activities.- Building national reserve expenditure estimates: Ministries and central agencies managing national reserve goods construct plans to increase purchase, reduce, or rotate national reserve goods; and build NSNN expenditure estimates for national reserve goods purchases in 2017 with a thrifty spirit, focusing on strategic, essential items, high-frequency usage, promptly effective response in unexpected, urgent situations; prioritizing national reserves for disaster prevention, recovery, pandemic control, fire incidents, hunger relief, defense-security needs.- Constructing regular expenditure estimates per individual sectors ensuring compliance with policies and laws, principles, criteria, and allocation norms for 2017 NSNN regular expenditure estimates.- Building expenditure estimates for the National Target Programs (CTMTQG), Target Programs (CTMT) aligned with the 2016-2020 medium-term public investment plan and criteria, norms for DPT expenditure allocation for 2016-2020;- For programs, projects using Official Development Assistance (ODA) and concessional loans, ensuring alignment with signed disbursement progress with sponsors, matching counterpart funding capability, implementation feasibility. Minimizing additional allocations beyond the assigned estimates during implementation. For new programs, projects, only implementing if genuinely effective, suitable with the ODA disbursement capacity according to signed agreements approved by the Prime Minister of the Government of Vietnam.- Allocating NSNN reserves proactively to cope with natural disasters, floods, pandemics, and executing essential, urgent tasks arising beyond the estimates.

More details can be found in Circular 91/2016/TT-BTC.

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