What is 5-year financial plan? What is the purposes of 5-year financial plan in Vietnam?

What is 5-year financial plan? What is the  purposes of 5-year financial plan in Vietnam? (Internet image)

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

1. What is 5-year financial plan?

According to Clause 1, Article 17 of the Law on State budget 2015, a 5-year financial plan is a financial plan for 05 years made together with a 5-year socio-economic development plan.

The 5-year financial plan must have overall and specific targets of state budget and state finance, major orientations for state budget and state finance; amount and structure of domestic revenues, revenue from crude oil, revenue from export and import; amount and structure of expenditure on development investment, debt repayment; orientation of budget deficit; limit of national foreign debts, public debts, government debts; solutions for implementation of the plan.

2. What is the  purposes of 5-year financial plan in Vietnam?

According to Clause 2, Article 17 of the Law on State budget 2015, 5-year financial plan is meant to:

- Achieve socio-economic development targets of the country, each sector, field, and area; balance and efficiently use public financial resources and state budget in the midterm; encourage publishing and transparency of state budget;

- Form a basis for competent authorities to consider deciding midterm investment plan from state budget;

- Orient the making of annual state budget estimates and 3-year state budget-finance plans.

3. Grounds for formulation of five-year finance plans in Vietnam

Grounds for formulation of five-year finance plans in Vietnam according to Article 6 of Decree 45/2017/ND-CP are as follows:

- Grounds for formulation of a national five-year finance plan:

+ The implementation of the five-year socio-economic development plan and finance plan of the previous period;

+ Socio-economic development and finance-state budget objectives, targets and orientations set forth in the national strategy and five-year plan on socio-economic development; and strategies on finance, public debts and tax system reform;

+ Regulations on finance-state budget, including also treaties which the Socialist Republic of Vietnam has signed or acceded to; and orientations for revision of existing regulations and promulgation of new ones in the five-year planning period;

+ Forecasts about the international and domestic economic and financial situation which might affect the ability to mobilize and the demand for finance-state budget resources in the five-year planning period;

+ The Prime Minister’s directions on formulation of five-year socio-economic development plans and five-year finance plans.

- Grounds for formulation of a provincial-level five-year finance plan:

+ The implementation of the local five-year socio-economic development plan and finance plan of the previous period;

+ Socio-economic development and finance-state budget objectives, targets and orientations set forth in the national strategy and five-year plan on socio-economic development; strategies on finance, public debts and tax system reform; socio-economic development objectives, targets and orientations in the five-year planning period of the locality; and approved socio-economic development master plan of the locality;

+ Forecasts about the socio-economic situation which might affect the locality’s ability to mobilize and demand for finance-state budget resources in the five-year planning period;

+ Regulations on finance-state budget, including also mechanisms for assignment of revenue sources and spending tasks between the central budget and local budgets and among local administrations of different levels; and orientations for revision of existing regulations and promulgation of new ones in the five-year planning period;

+ Directions of the Prime Minister and provincial-level People’s Committee on formulation of five-year socio-economic development plans and five-year finance plans.

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