Grounds for formulation of three-year finance-state budget plans in Vietnam

Grounds for formulation of three-year finance-state budget plans in Vietnam (Internet image)

Regarding this issue, LawNet would like to answer as follows:

1. What is three-year finance-state budget plan?

According to Clause 2, Article 3 of Decree 45/2017/ND-CP, three-year finance-state budget plan means a finance-state budget plan formulated annually by the successive method for three consecutive years, including the year of budget estimation and two following years, under Clauses 1 and 2, Article 43 of the Law on the State Budget. Three-year finance-state budget plans include

- National three-year finance-state budget plans

- Provincial-level three-year finance-state budget plans.

2. Grounds for formulation of three-year finance-state budget plans in Vietnam

Specifically, Article 13 of Decree 45/2017/ND-CP stipulates the grounds for formulation of three-year finance-state budget plans as follows:

(1) Grounds for formulation of a national three-year finance-state budget plan:

- The implementation of the socio-economic plan and state budget estimates of the current year;

- The national strategy for socio-economic development; strategies for finance, public debts and tax system reform;

Five-year plans on socio-economic development, finance, and public investment (in case the three planning years are covered by a five-year plan), or objectives, targets and orientations for socio-economic development, finance, and public investment in 5 subsequent years (in case the three planning years belong to two consecutive five-year planning periods);

- Planned major socio-economic targets in the three planning years; state budget revenue and expenditure framework and structure, estimated budget expenditures in the fields identified in the national three-year finance-state budget plan made in the previous year;

- Current regulations and orientations for revision and promulgation of the law on finance-state budget in the three planning years;

- The Prime Minister’s directive and guidance of the Ministry of Finance and Ministry of Planning and Investment on formulation of three-year finance-state budget plans;

- Three-year finance-state budget plans of ministries, central agencies and provinces and centrally run cities.

(2) Grounds for formulation of a provincial-level three-year finance-state budget plan:

- The implementation of the local socio-economic plan and state budget estimates of the current year;

- The national strategy for socio-economic development; strategies for finance, public debts and tax system reform; national and local five-year plans on socio-economic development, finance and public investment (in case the three planning years are covered by a five-year plan), or the locality’s objectives, targets and orientations for socio-economic development, finance and public investment in 5 subsequent years (in case the three planning years belong to two consecutive five-year planning periods);

- Planned major socio-economic targets of the province or centrally run city in the three planning years; estimated budget expenditures in the fields identified under the local three-year finance-state budget plan made in the previous year;

- Current regulations and orientations for revision and promulgation of centrally and locally promulgated laws and regulations on finance-state budget in the three planning years;

- The Prime Minister’s directive, guidance of the Ministry of Finance and Ministry of Planning and Investment, and the provincial-level People’s Committee’s direction on formulation of three-year finance-state budget plans;

- Three-year finance-state budget plans of provincial-level agencies and units.

(3) Grounds for formulation of a three-year finance-state budget plan of a ministry, central agency or provincial-level agency or unit:

- The implementation of major objectives, tasks, regimes and policies and state budget estimates of the current year;

- Development strategy, master plan and plan for the sector, field, agency or unit; medium-term public investment plan of the agency or unit;

- Current regulations and orientations for revision and promulgation of centrally and locally promulgated laws and regulations on finance-state budget in the three planning years;

- Planned socio-economic targets that affect the implementation of objectives and tasks of the agency or unit in the three planning years;

- Competent state agencies’ direction on formulation of three-year finance-state budget plans in the three planning years;

- Ceiling budget expenditure notified by a competent agency to the ministry, central agency or provincial-level agency or unit under the three-year finance-state budget plan made in the previous year.

3. Requirements on three-year finance-state budget planning in Vietnam

 Requirements on three-year finance-state budget planning in Vietnam specified in Article 14 of Decree 45/2017/ND-CP include:

- To conform with the practical implementation of five-year and annual objectives, targets and orientations for socio-economic development and finance, and with forecasts for the three planning years.

- To fully reflect state budget revenues and other revenues as prescribed by law; and budget expenditures estimated according to the structure of fields and major expenditures not exceeding the ceiling budget expenditure notified by a competent agency.

- To comply with the principles of budget balancing, management and assignment, and public debt management prescribed by the Law on the State Budget and the Law on Public Debt Management.

- To be formulated according to the successive method for a 3-year period, in which the state budget estimate planned for the first year is used as reference for formulating, submitting and deciding on annual state budget estimates.

- The process of formulation, reporting, summarization and submission is incorporated into the annual budget estimation process.

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