Law on the state budget - World Bank€¦  · Web viewThe State Budget shall be put under unified...

NATIONAL ASSEMBLY-----------------

Law No. 01/2002/QH11

SOCIALIST REPUBLIC OF VIETNAMIndependence – Liberty – Happiness

NATIONAL ASSEMBLY

OF THE SOCIALIST REPUBLIC OF VIETNAM

Legislature XI, 2nd Session(From 12 November to 16 December 2002)

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LAW ON STATE BUDGET

In order to establish uniform management of the national finance, promote pro-activeness and accountability of agencies, organizations and individuals in the management and utilization of the State budget, strengthen financial disciplines, use the State budget and properties economically and effectively, increase accumulation for industrialization and modernization in the socialist orientation, satisfy the socio-economic development needs, improve people’s living standards, and maintain national security and defense and foreign relations;

Pursuant to the 1992 Constitution of the Socialist Republic of Vietnam, which was amended and supplemented in accordance with Resolution No. 51/2001/QH10 dated 25 December 2001 of the National Assembly, legislature X, 10th session;

This Law contains stipulations on drafting, implementing, checking, inspecting, auditing and drawing up final accounts of the State Budget, and powers and duties of State agencies of various levels with respect to the State Budget.

CHAPTER I

General Provisions

Article 1

The State Budget comprises all revenues and expenditures of the State that have already been decided by the competent State agencies and implemented within one year in order to ensure the implementation of the functions and responsibilities of the State.

Article 2

1. State Budget revenues include revenues from taxes, fees and charges; revenues from economic activities of the State; contributions by organizations and individuals; aids; and other revenues as stipulated by law.

2. The State Budget expenditures include spending on socio-economic development, on ensuring national defense, security, operations of the State apparatus; spending on the payment of State debts; on aid and other spending as stipulated by law.

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Article 3

The State Budget shall be put under unified management on the principle of democratic centralism, transparency, assignment of responsibilities in association with assignment of powers.

The National Assembly shall decide the draft State Budget and allocations of the central State Budget, and ratify the State Budget accounts.

Article 4

1. The State Budget shall comprise the central budget and local budgets. Local budgets shall comprise budgets of the local administration at various levels that have People’s Councils and People’s Committees.

2. Decentralization of sources of revenue and spending tasks, and the relations between budgets of various levels shall be established on the following principles:

a. The central budget and the budget of each level of local administration shall be decentralized in terms of concrete sources of revenue and spending tasks;

b. The central budget shall play a key role, ensuring implementation of strategic tasks of national importance, and support localities that have not been able to balance their budget revenue and expenditures;

c. Sources of revenue shall be decentralized to local budgets in order that local administration will perform assigned tasks proactively, and resources of commune budget will be strengthened. People’s Councils of provinces and cities under the central Government (hereinafter collectively called “provincial”) shall decide decentralization of sources of revenue and spending tasks among budgets of local administration of various levels in line with decentralized socio-economic management, national defense and security, and management competencies of each level in the locality concerned;

d. The budget of each level shall handle assigned spending tasks. Promulgation and execution of new policy and regime, which entails an increase in budget spending, must be supported by a financing solution appropriate with balancing capability of the budget concerned;

e. In case an upper-level State management agency authorizes a lower-level State management agency to carry out a spending task that comes under the formers' responsibility, funds must be transferred from the upper-level budget to the lower-level budget for performing such a task;

f. The revenue sharing by a percentage (%) ratio among the budgets of various levels shall be implemented, and additional allocation from the upper-level budget to the lower-level budget shall be made to ensure equality, balanced development among the regions and localities. The percentage ratio for revenue sharing and the additional allocation of revenue from the upper-level budget to the lower-level budget shall be maintained stable from three to five years. The additional revenue allocated from the upper-level budget to the lower-level budget shall be the latter’s revenue;

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g. During a period of stable budget, localities may utilize annual increased revenue to which they are entitled for local socio-economic development. After each period of stable budget, the localities must improve their capabilities of budget self-balancing, increase the local budget, reduce additional allocation from the upper-lever budget or increase the percentage ratio of revenue sharing with the upper-level budget; and

h. Except for the supplementary allocations to the revenue source and the authorized spending as stipulated in Clauses e and f of this Article, the budget of one level shall not be used to pay for spending that comes under the task of another level, except in special cases as stipulated by the Government.

Article 5

1. The State Budget revenue shall be collected in accordance with provisions of this Law and other provisions of law.

2. State Budget expenditure shall be made only under the following conditions:

a. It has been included in the approved draft budget, except for cases stipulated in Articles 52 and 59 of this Law;

b. In conformity with the regulations, criteria and norms set by the competent State agency;

c. It has been approved by the heads of the budget using units and persons who are authorized to approve of the spending;

In addition to the conditions specified in Clause 2 of this Article, if the expenditure is made for a work that requires bidding, the bidding must be organized in accordance with the regulations on bidding.

3. No branch, level or unit is allowed to institute any revenue or expenditure contrary to the provisions of law.

4. Heads of agencies, organizations and units using State Budget shall be responsible to practice thrift, and combat against wastages and corruption.

Article 6

All State Budget revenues and expenditures must be fully accounted for in the State Budget in accordance with specified regimes in a timely manner.

Article 7

1. The State Budget fund comprises all amounts of money of the State, including borrowed money, which have been entered into the accounts of the State Budget of all levels.

2. The State Budget fund shall be administered at the State Treasury.

Article 8

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1. The State Budget shall be balanced in accordance with the principle that the total revenue from taxes, fees and charges must be bigger than the total regular spending and help to accumulate more and more for spending on development investment; in case of over-spending, the over-spent amount must be smaller than the amount spent on development investment and a balance between revenue and expenditure of the budget must be achieved eventually.

2. Budget deficit shall be financed by domestic and foreign borrowings. The borrowing to make up for the State Budget deficit must abide by the following principle: they must not be used for consumption, but only for development purposes; and a budget must arranged to proactively repay the debts when they are due.

3. The local budgets shall be balanced on the principle that the total expenditure shall not exceed the total revenue; in case a province or city directly under the central Government needs an investment in infrastructure construction which comes under the scope of the provincial budget, or which is on the list of investment in the five-year plan approved by the People’s Council, but which is beyond its balancing ability, such a province or city shall be allowed to mobilize domestic investment capital and balance its own provincial budget in order to be able to repay all debts when they are due. Total outstanding borrowing shall not exceed 30% of total annual domestic capital investment of the provincial budget.

4. Ministries, ministerial-level agencies, agencies under the Government, other central agencies, People’s Committees of various levels, organizations and units shall be responsible to organize the implementation of the budget within their respective authority. Borrowing, lending, use of State budget contrary to the laws are strictly prohibited.

Article 9

1. The draft expenditures of the central budget and of local budgets at various levels shall include 2% to 5% of the total estimated spending to meet contingent spending on preventing, combating, and overcoming consequences of the acts of god and fires, important tasks of national defense and security, and other urgent tasks. The Government shall decide the use of the provisions in the central budget, regularly report to the National Assembly’s Standing Committee, and report to the National Assembly at the latter’s nearest session. People’s Committees shall decide the use of the provisions in the local budgets, regularly report to the Standing Committee of the People’s Councils, and report to the People’s Councils at the latter’s nearest session. For commune level, the People’s Committees shall decide the use of the provisions in the commune budget, regularly report to the Chairman or a Vice Chairman of the [commune] People’s Councils, and report to the [commune] People’s Councils at the latter’s nearest session.

The Government shall decide the decentralization of the authority to decide the use of the provisions in the central budget and the local budgets.

2. The Government and provincial People’s Committees shall be entitled to establish the financial reserve fund from sources such as revenue increases, budget closing balance, and other financial sources as stipulated by laws. The financial reserve fund shall be used to meet spending needs when the revenues have not been collected in time, and such spending must be reimbursed immediately within the budget year. Where provisions in the budget have been used up, the financial reserve fund shall be used for spending in

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accordance with the Government’s regulations and shall in no case exceed 30% of the fund’s closing balance.

The maximum limit the financial reserve fund at each level shall be stipulated by the Government.

Article 10

The State Budget shall ensure enough funds for the activities of the Communist Party of Vietnam and the socio-political organizations. The funds for the activities of political-social-professional organizations, social organizations and socio-professional organizations shall be implemented in accordance with the principle of self-sufficiency. The State Budget shall render support only in a number of special cases provided for by the Government.

Article 11

All properties to be invested and purchased with the State Budget sources, and other properties of the State must be managed strictly in conformity with the prescribed regimes.

Article 12

1. The State Budget revenues and expenditures shall be accounted for in the Vietnam Dong (VND).

2. The accounting and account statement of the State Budget shall be carried out uniformly in accordance with the accounting regime of the State and the List of the State Budget.

3. All forms for State Budget revenues and expenditures shall be issued, used and managed in accordance with regulations of the Ministry of Finance.

Article 13

1. Drafting, final accounts, and audit of final accounts of the State budget and budgets of various levels, budget drafting units, and organizations supported by the State budget must be publicly disclosed.

2. Procedures and formalities for collection, payment, exemption from, reduction and refund of revenue, transfer payments and budget payments must be listed clearly at the place such transactions are carried out.

3. The Government shall stipulate the disclosure of budgets in details.

Article 14

A budget year begins on the 1st of January and ends on the 31st of December of a calendar year.

CHAPTER II

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Duties And Powers Of The National Assembly, The State President, The Government And Other State Agencies, And Responsibilities And Obligations Of Organizations

And Individuals In Relation To The State Budget

Article 15

The National Assembly shall have the following powers and duties:

1. To make laws and amend laws in the field of finance and budget;

2. To decide the national financial and monetary policies in order to contribute to the economic development, and ensure the balance between revenue and expenditure of the State Budget;

3. To decide the State budget drafting, including:

a. Total budget revenues, including inland revenue, revenue from trading activities, and revenue from non-refundable aids;

b. Total budget expenditures, including spending by the central budget and local budgets, details by types of spending: spending on development investment, regular spending, repayment of debts and aids, additions to the financial reserve funds, budget provisions. Regarding spending on development investment and regular spending, details are provided for education and training, science and technology;

c. Estimate of budget over-spending and financing sources;

4. To decide allocations from the central budget:

a. Total and level of expenditure for each field;

b. Estimated expenditures by individual ministries, ministerial-level agencies, agencies under the Government and other central agencies for individual fields;

c. Additions from the central budget to the individual local budgets, including additions to balance the budgets and purposeful additions;

5. To decide projects and programs of national importance, which are financed by the State budget;

6. To decide the adjustment of the State Budget where necessary;

7. To supervise the implementation of the State Budget, the national financial and monetary policies, the National Assembly's resolutions on annual State Budget, national programs and projects, and key capital construction projects, socio-economic development programs, and other projects and capital construction works;

8. To ratify the statements of final accounts of the State Budget; and

9. To abolish legal documents issued by the State President, National Assembly’s Standing Committee, the Prime Minister, the People’s Supreme Court, and the People’s

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Supreme Procuracy on finance and budget in case such legal documents are contrary to the Constitution, laws and resolutions of the National Assembly.

Article 16

The National Assembly’s Standing Committee shall have the following powers and duties:

1. To promulgate legal documents in the financial and budgetary field as assigned by the National Assembly;

2. To provide comments on draft laws, reports and other drafts in the financial and budgetary field which are submitted to the National Assembly by the Government;

3. Based on the National Assembly’s resolution on State budget estimates and allocations from the central budget to the local budgets in the first year of a period of stable budget, to decide the percentage ratio of revenue sharing between the central budget and the local budgets as stipulated in Clause 2 of Article 30 of this Law;

4. To issue Regulations on drafting, appraisal and submission to the National Assembly of State budget estimates, plans on budget allocations, and approve final accounts of the State budget; and

5. To supervise the implementation of the laws on budget, the fiscal policy, resolutions of the National Assembly and Standing Committee of the National Assembly on finance and budget; suspend the implementation of legal documents issued by the Government and the Prime Minister on finance and budget in case such legal documents are contrary to the Constitution, laws, and the National Assembly’s resolutions, and submit the cases to the National Assembly for approval on abolishment of such legal documents; repeal legal documents of the Government and the Prime Minister on finance and budget in case such legal documents are contrary to Ordinances, and resolutions of the National Assembly’s Standing Committee; and repeal resolutions of provincial People’s Councils on finance and budget in case such resolutions are contrary to the Constitution, laws, the National Assembly’s resolutions, ordinances and resolutions of the National Assembly’s Standing Committee.

Article 17

The National Assembly's Economic and Budgetary Commission shall have the following powers and duties:

1. To examine draft laws and ordinances and other drafts in the financial and budgetary field, as assigned by the National Assembly and the National Assembly’s Standing Committee;

2. To organize the examination of the draft State Budget, plans on allocations of the central budget, reports on the implementation of the State Budget, and the State Budget statement submitted by the Government to the National Assembly;

3. To supervise the implementation of laws, the National Assembly’s resolutions, ordinances and resolutions of the National Assembly’s Standing Committee on finance and budget; and supervise the implementation the State Budget and the fiscal policy;

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4. To supervise legal documents of the Government, the Prime Minister, Ministers, and heads of ministerial-level agencies, and legal documents jointly issued by central competent agencies or by central competent State agencies and socio-political agencies with respect to finance and budget; and

5. To make recommendations on issues of budgetary and financial management.

Article 18

The Nationalities Council and other Commissions of the National Assembly shall have the following powers and duties:

1. Within their respective tasks and powers, to cooperate with the National Assembly's Economic and Budgetary Commission in examining draft laws and ordinances, budget estimates, plans on the allocation of the central budget, and other drafts in the financial and budgetary field submitted by the Government to the National Assembly and the National Assembly's Standing Committee;

2. To supervise the enforcement of the law on finance and budget and the implementation of the National Assembly' resolutions on finance and budget within the areas under their jurisdiction; and

3. To recommend on financial and budgetary issues within the areas under their respective jurisdiction.

Article 19

The State President shall have the following powers and duties:

1. To announce laws and ordinances on finance and budget;

2. To discharge the tasks and powers as stipulated by the Constitution and laws in negotiating and signing, in name of the State of the Socialist Republic of Vietnam, international treaties with the head of other states; submit the National Assembly such international treaties for ratification; decide on approval or extension of international treaties, except where such treaties must be submitted to the National Assembly for the latter’s decision in respect of the financial and monetary field; and

3. To command the Government to report on financial and budgetary matters when necessary.

Article 20

The Government shall have the following powers and duties:

1. To submit the National Assembly and the Standing Committee of the National Assembly draft laws and ordinances and other drafts on finance and budget; to promulgate legal documents on finance and budget in accordance with its authority;

2. To establish and submit the National Assembly the draft State Budget, annual plans on allocations of the central budget, and plans on State Budget readjustment in case of necessity;

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3. On the basis of the National Assembly’s resolutions on the draft State Budget and the allocations of the central budget, to decide on the assignment of tasks in the budget revenue and expenditure to individual ministries, ministerial-level agencies, agencies under the central government and other central agencies as stipulated in point b, Clause 4, Article 15 of this Law, the tasks in revenue, expenditure and the supplementary allocation from the central budget to each province or city directly under the Central Government as stipulated in points a and b, Clause 3, and point c, Clause 4, Article 15 of this Law; on the basis of resolutions of the Standing Committee of the National Assembly, assign the percentage ratios for revenue sharing between the central budget and local budgets in respect of revenues to be shared as stipulated in Clause 3, Article 16 of this Law; stipulate principles for assignment and directing implementation of the local budgets in respect of some expenditures on which the National Assembly shall decide;

4. To exercise unified management of the State Budget, ensure close co-ordination between the branches and local managerial agencies in implementing the State Budget;

5. To organize and manage the implementation of the State Budget on which the National Assembly has decided, and control the implementation of the State Budget; to report to the National Assembly and the Standing Committee of the National Assembly on the implementation of the State Budget, national programs and projects, socio-economic development programs, and other important capital construction projects;

6. To set forth regulations on the use of budget provisions, set forth regulations on use of the financial reserve fund and other State financial reserve sources in accordance with provisions of this Law;

7. To set forth or authorize the competent State Agency to set forth regimes, criteria, and levels of State Budget expenditures which will serve as a basis for establishment, allocations and management of the State Budget for uniform application throughout the country; to report the Standing Committee of the National Assembly in order to obtain the latter’s written opinions on levels of allocations and crucial budget expenditure regimes which have a large extent of influence and relate to implementation of the tasks of socio-economic development, national defense and security;

8. To examine resolutions of provincial People's Councils on budget drafting and final budget accounts and other financial and budgetary issues. Where the resolutions of the provincial People's Councils are contrary to provisions of the Constitution, laws, resolutions of the National Assembly, ordinances, resolutions of the Standing Committee of the National Assembly and legal documents issued by the upper-level State agencies, the Prime Minister may suspend the implementation of and propose with the Standing Committee of the National Assembly to abolish such resolutions;

9. To establish and submit the National Assembly final accounts of the State Budget, final accounts of key capital construction projects of the State; and

10. To issue Regulations on examination of and decision on drafting and allocations of the local budgets, and approve of final accounts of the local budgets.

Article 21

The Ministry of Finance shall have the following powers and duties:

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1. To prepare draft laws, ordinances and other drafts in the financial and budgetary field and devise strategies and plans on borrowing and repayment of domestic and foreign loans to submit to the Government; to issue legal documents on finance and budget within its authority;

2. To preside over and cooperate with ministries, ministerial-level agencies, agencies under the central Government, other central agencies, and provincial People’s Committees in establishing levels of allocations, regimes, criteria and levels for the State Budget expenditure, accounting regime, final accounts and regime of financial and budgetary reporting and disclosures to be submitted to the Government, or to make the decision itself in accordance with the assignment of authority by the Government for uniform application throughout the country;

3. To preside over and cooperate with ministries, ministerial-level agencies, agencies under the Central Government, other central agencies, and provincial People’s Committees in drafting the State Budget and devising plans on the allocation of the central budget; organize the implementation of the State Budget; uniformly manage and direct the collection of taxes, fees, charges, and State budget revenues, and foreign aids; organize the implementation of State budget spending in accordance with assigned budget drafts; draw up final accounts of the central budget; summarize and draw up final accounts of the State Budget to be submitted to the Government; organize the management and monitoring of use of State properties;

4. To check financial and budgetary regulations of ministries, ministerial-level agencies, People’s Councils, People’s Committees and Chairmen of provincial People’s Committees. Where such regulations are contrary to the Constitution, laws, resolutions of the National Assembly, ordinances, resolutions of the Standing Committee of the National Assembly and other legal documents of upper-level State agencies, the Ministry of Finance may request the Ministers or heads of the ministerial agencies to suspend the implementation or repeal the regulations issued by such Ministries or ministerial-level agencies, recommend the Prime Minister to suspend the implementation of resolutions of provincial People’s Councils; suspend the implementation of or recommend the Prime Minister to repeal the regulations of the provincial People’s Committees and Chairmen of the provincial People’s Committees;

5. To conduct uniform management of borrowing and repayment of Government debts, and borrowing and repayment of national debts;

6. To conduct financial and budgetary inspections, deal with or recommend the competent agencies to deal with breaches of the financial and budgetary regimes, which are committed by Ministries, ministerial-level agencies, agencies under the central Government, other central agencies, localities, economic organizations, administrative units, non-productive units and other entities obligated to contribute to the State Budget or to use the State Budget, in accordance with provisions of law; and

7. To manage the State Budget funds, the national reserve fund, and other funds of the State in accordance with provisions of law.

Article 22

The Ministry of Planning and Investment shall have the following powers and duties:

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1. To submit the Government the draft plan on socio-economic development of the whole country and the major balances of the national economy, including the balances of finance, money, capital construction investment fund, which will serve as a basis for the elaboration of the financial and budgetary plans;

2. To cooperate with the Ministry of Finance in preparing draft budgets. To prepare plans on allocations of the central budget in areas under its charge as assigned by the Government; and

3. To cooperate with the Ministry of Finance and the concerned ministries and branches in examining and evaluating the efficiency of investment capital for capital construction projects.

Article 23

The State Bank of Vietnam shall have the following powers and duties:

1. To cooperate with the Ministry of Finance in establishing strategies and plans for securing and repaying domestic and foreign loans, establishing and implementing borrowing plans to make up for State Budget over-spending; and

2. To make advance payment to the State Budget so as to handle the temporary deficit of the State Budget in accordance with the Prime Minister's decision.

Article 24

Ministries, ministerial-level agencies, agencies under the central Government, and other central agencies shall have the following powers and duties:

1. To conduct annual budget drafting for the agencies themselves;

2. To cooperate with the Ministry of Finance in the process of drafting the State Budget, devising plans for allocations of the central budget, and drawing up final accounts of budgets of the branches and areas under their charge;

3. To examine and monitor the implementation of budgets of the branches and areas under their charge;

4. To report on the implementation and results of budget utilization by the branches and in areas under their charge in accordance with the stipulated regime;

5. To cooperate with the Ministry of Finance in establishing regimes, criteria, levels of spending of the State Budget of the branches and areas under their charge; and

6. To manage, organize the implementation, and draw up final accounts of the assigned budget; and ensure that State properties are utilized effectively.

Article 25

People's Councils of various levels shall have the following powers and duties:

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1. Based on tasks of budget collection and spending as assigned by the upper-level agency and local realities, to decide:

a. Estimates of State budget revenue in the localities, including inland revenue, revenue from trading activities, and non-refundable aids;

b. Estimates of local budget revenue, including local budget revenue to which the locality is wholly (100%) entitled, and the portion of budget revenue to which the locality is entitled in accordance with the sharing percentage, and supplementary revenue allocated from the upper-level budget;

c. Estimates of local budget spending, including budget spending at the level concerned and lower-level budget spending, which are detailed by fields of spending: spending on development investment, regular spending, repayment of debts, addition to the financial reserve fund, and budget provisions. Details must be provided for spending on development investment and regular spending, particularly spending on education and training, and science and technology;

2. To decide allocations of the draft budget:

a. Total expenditures and expenditures for individual fields;

b. Estimates of budget spending on individual fields by each of the agencies and units of the same level;

c. Supplementary revenue to the lower-level local budgets, including balancing and purposeful supplementary revenue;

3. To approve of final accounts of local budgets;

4. To decide policies and measures to implement the local budgets;

5. To decide adjustment of estimates of the local budgets, where necessary;

6. To supervise the implementation of budgets which have been approved by the People’s Councils;

7. To abolish legal documents on finance and budget issued by the People’s Committee of the same level and the immediate lower-level People’s Councils which are contrary to the Constitution, laws, resolutions of the National Assembly, ordinances, resolutions of the Standing Committee of the National Assembly, and other legal documents issued by the upper-level State agencies;

8. Apart from the powers and duties stipulated in Clauses 1, 2, 3, 4, 5, 6, and 7 of this Article, provincial People’s Councils shall have the following powers and duties:

a. To decide decentralization of revenue and spending tasks to each level of the local budgets as stipulated in point c, Clause 2, Article 4 of this Law;

b. To decide the percentage ratio for revenue sharing between the budgets of various local levels in respect of revenues stipulated in Clause 2, Article 30 of this Law and revenue to be shared among the levels of the local budgets;

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c. To decide collection of fees, charges and people’s contributions in accordance with provisions of law;

d. To decide concrete levels of budget allocations, regimes, standards, and levels of spending in accordance with the Government’s regulations; and

e. To decide levels of capital mobilization in accordance with Clause 3, Article 8 of this Law. To draft the local budget and draw up the plan on its allocation, the plan on readjustment of the local budget in case of necessity, submit it to the People's Council of the same level for decision, and report to the immediate higher State administrative agency and financial agency;

Article 26

People’s Committees of various levels shall have the following powers and duties:

1. To draft the local budget and draw up plans on its allocation in accordance with criteria stipulated in Clauses 1 and 2, Article 25 of this Law, and plans on readjustment of the local budget in case of necessity, submit it to the People's Council of the same level for decision, and report to the immediate upper-level State administrative agency and financial agency;

2. To draw up final accounts of the local budgets which will be submitted to the People's Council of the same level for ratification, and to report to the immediate higher State administrative agency and financial agency;

3. To examine the resolution of the lower-level People's Council on finance and budget;

4. Based on the resolution of the People's Council of the same level, to assign the tasks of budget collection and spending to each attached agency and unit; the tasks of collection and spending and the level of supplementary allocation to the lower-level budgets, and percentage ratios for revenue sharing among the levels of local budget in respect of revenue to be shared; to stipulate principles of arrangement and direct the implementation of draft budget in respect of some expenditures decided by the People’s Council in accordance with point c, Clause 1, Article 25 of this Law;

5. To organize and check the implementation of the local budget;

6. To cooperate with the superior State agencies in managing the State Budget within its territory;

7. To report on the State Budget in accordance with provisions of law;

8. The provincial People's Committees, in addition to the tasks and powers provided for in Clauses 1, 2, 3, 4, 5, 6, and 7 of this Article, shall also have the task of formulating and submitting the People's Council for the latter’s decision issues stipulated in Clause 8, Article 25 of this Law; and

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9. To provide guidance for the local financial agency to cooperate with related agencies with the aim of assisting the People’s Committee perform tasks stipulated in Clauses 1, 2, 3, 4, 5, 6, 7, and 8 of this Article.

Article 27

Budget drafting units shall have the following powers and duties:

1. To organize the drafting of budget revenues and expenditures within the assigned scope; to allocate the draft budget as assigned by the competent agency to attached units and adjust the allocations of draft budget within their respective authority;

2. To organize the implementation of the assigned plans for budget revenue and expenditure; to pay fully and in time the remittances to the budget in accordance with the provisions of law; to spend in conformity with the regimes, purposes, objects and in an economical manner; manage and utilize State properties in accordance with stipulated regimes;

3. To guide and check the implementation of the plans for budget revenues and spending of the attached units;

4. To comply with provisions of laws on accounting and statistics; report, draw up final budget accounts and publicly disclose the budgets in accordance with provisions of laws; approve final accounts prepared by the lower-level budget drafting units; and

5. Apart from powers and duties stipulated in Clauses 1, 2, 3, and 4 of this Article, non-productive budget drafting units may proactively utilize sources of non-productive revenue to develop, improve the quality and efficiency of their activities in accordance with the Government’s regulations.

Article 28

Organizations and individuals shall have the following responsibilities and obligations:

1. To pay fully and in time the taxes, fees, charges and other revenues to the budget in accordance with provisions of law;

2. In case they are allocated capital and funds by the State in accordance with the approved draft budget, they shall have to manage and use those capital and funds for the right purposes, in accordance with the regimes and in an economical and efficient manner, and draw up final accounts with the financial agencies; and

3. To properly observe the regulations on accounting, statistics, and budget disclosure.

Article 29

Ministers, heads of ministerial-level agencies, agencies under the central Government, and other central agencies, and Chairmen of People’s Committees of various levels shall organize the performance of assigned duties and exercise of assigned powers in the financial and budgetary fields and take responsibilities for mistakes made in their scope of management.

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CHAPTER III

Sources Of Revenues, Spending Tasks Of The Budget Of Various Levels

Article 30

The sources of revenues of the central budget shall comprise:

1. The revenues to be 100% collected:

a. VAT on import goods;

b. Export tax and import tax;

c. Special consumption tax on import goods;

d. Corporate income tax on units which carry out uniform accounting for the whole unit;

e. Taxes and other revenues from the petroleum industry in accordance with Government’s regulations;

f. Central budget’s capital recovered at economic establishments, central budget’s recovered State loans (principal and interest), revenues from the central financial reserve fund, profit from capital contributed by the State;

g. Non-refundable aids granted by foreign governments, international organizations, other organizations and foreign individuals to the Vietnamese Government;

h. Fees and charges contributed to the central budget;

i. Revenues from the closing balance of the central budget;

j. Other revenues in accordance with provisions of laws;

2. The revenues shared in percentage (%) between the central budget and the local budgets:

a. Value added tax, excluding VAT on import goods as stipulated in point a, Clause 1 of this Article;

b. Corporate income tax, excluding corporate income tax of the units under the whole-unit accounting system as stipulated in point d, Clause 1 of this Article;

c. Income tax on high-income earners;

d. Tax on profits remitted abroad, excluding tax on overseas remittance of profits earned in the petroleum industry as stipulated in point e, Clause 1 of this Article;

e. Special consumption tax on domestic goods and services; and

f. Gasoline and oil fees.

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Article 31

The spending tasks of the central budget shall comprise:

1. Spending on development investment:

a. Investment in construction of socio-economic infrastructure projects managed by the central level without possibility of capital recovery;

b. Investment and capital support for State enterprises; State economic organizations, and State financial organizations; contribution of share capital and equity capital to joint ventures with enterprises in areas that require the participation of the State;

c. Addition to the State reserve fund; and

d. Other expenditures in accordance with provisions of laws.

2. Regular spending on:

a. Non-productive activities in the fields of education, training, health-care, social affairs, culture, information, arts and literature, physical training and sports, science, technology and environment and other operations managed by the central agencies;

b. Non-business and economic operations managed by the central agencies;

c. National defense, security and social order and safety, excluding the portion allocated to the locality;

d. Operations of the central agencies of the State and the Communist Party of Vietnam and socio-political organizations;

e. Price subsidies in accordance with the State policies;

f. National programs implemented by the central Government;

g. Support for the social insurance fund as stipulated by the Government;

h. Subsidies to people eligible for the social policies managed by the central Government;

i. Support for political-social-professional organizations, social organizations and socio-professional organizations at the central level in accordance with provisions of law; and

j. Other expenditures in accordance with provisions of laws.

3. Payment of principals of and interests on Government’s borrowings;

4. Aids;

5. Other expenditures as stipulated by laws;

6. Additions to the central financial reserve fund; and

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7. Supplementary revenue to the local budgets.

Article 32

The revenue sources of the local budgets shall include:

1. The revenues to be 100% collected;

a. Land and housing taxes;

b. Natural resources tax, excluding natural resources tax on petroleum activities;

c. License tax;

d. Tax on transfer of land use rights;

e. Tax on use of agricultural land;

f. Fee on land use;

g. Land rent;

h. Revenues from the leasing and sale of dwelling houses owned by the State;

i. Registration fees;

j. Revenues from State-run lotteries;

k. Recovered capital of the local budgets in economic organizations, revenue from the local financial reserve fund, income earned on capital contributed from the local budgets;

l. Non-refundable aids donated directly by international organizations, other foreign organizations and foreign individuals to the locality;

m. Fees, charges and other revenues earned from non-productive activities and other revenue to be contributed to the local budgets in accordance with the provisions of laws;

n. Revenue from public land and income earned on other public properties;

o. Money mobilized from organizations and individuals in accordance with provisions of laws;

p. Voluntary contributions from domestic and foreign organizations and individuals;

q. Revenues from the closing balance of the local budgets as stipulated in Article 63 of this Law; and

r. Other revenues as provided for by law.

2. Revenues shared in percentage (%) between the central budget and the local budgets in accordance with Clause 2, Article 30 of this Law;

3. Supplementary revenue from the central budget; and

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4. Money mobilized for construction of infrastructure in accordance with Clause 3, Article 8 of this Law. Turnover tax;

Article 33

The spending tasks of the local budgets shall include:

1. Spending on development investment:

a. Investment in the construction of locally managed socio-economic infrastructure projects;

b. Investment and capital support for State enterprises, State economic organizations, and State financial organizations in accordance with provisions of law;

c. Other spending in accordance with provisions of laws;

2. Regular spending on:

a. Locally-managed non-productive activities in the fields of economy, education and training, health-care, culture, information, arts and literature, physical training and sports, science, technology and environment and other locally managed non-productive activities;

b. Tasks of national defense, security and social order and safety, as assigned to the province;

c. Activities of the agencies of the State, the Communist Party of Vietnam, and socio-political organizations in the locality;

d. Support for local political-social-professional organizations, social organizations and socio-professional organizations in accordance with provisions of law;

e. Implementation of social policies managed by the province;

f. Locally managed national programs as assigned by the Government;

g. Price subsidies in accordance with State policies; and

h. Other spending in accordance with provisions of laws.

3. Payment of principals and interests on funds mobilized for investment as stipulated in Clause 3, Article 8 of this Law;

4. Spending on supplementing the financial reserve fund; and

5. Spending on supplementing lower-level budgets.

a) Article 34

1. Based on sources of revenue and tasks of spending of the local budgets as stipulated in Articles 32 and 33 of this Law, the provincial People’s Councils shall decide concrete

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decentralization of sources of revenue and tasks of spending to each level of budget of the local authorities on the following principles:

a. The decentralization must be in line with decentralization of socio-economic, national defense and security tasks for each field, economic, geographic and demographic characteristics of individuals regions, and local managerial capabilities;

b. Of the sources of revenue of commune and township budgets, these budgets shall be entitled to at least 70% of revenues from tax on transfers of land use rights; land and housing taxes, license tax on individuals and individual households; tax on use of agricultural land collected from households, and registration fees for land and housing;

c. Of the sources of revenue of budgets of township and cities under a province, such budgets shall be entitled to at least 50% of revenues from registration fees, excluding registration fees for land and housing; and

d. Of spending tasks decentralized to townships and cities under a province, there must be tasks of investment in construction of public schools, lighting, water supply and sewage, urban traffic, and other public welfare construction works.

2. Based on the percentage (%) for sharing of revenue as assigned by the Prime Minister and revenue to which the local budgets are wholly entitled, provincial People’s Councils shall decide the percentage (%) of revenue sharing between budgets of various levels of local administration.

Article 35

In addition to the decentralized revenues stipulated in Article 34 of this Law, the administration of communes, townships, and cities under a province shall be entitled to mobilize contributions from organizations or individuals for investment in the construction of infrastructure of the communes, townships, and cities on the province on a voluntary basis. The mobilization, management, and use of such contributions shall be carried out in a transparent way, be subject to examination and control so as to ensure that they shall be used for the right purposes and in accordance with regimes provided for by law.

Article 36

1. The local budgets may utilize revenue to which they are wholly entitled, revenue shared by a percentage of revenues which can be shared and the supplementary allocation from the upper-level budget to the lower-level budget to balance budget revenue and expenditure and to ensure the implementation of the assigned socio-economic, national defense and security tasks.

2. The percentage applicable to revenues to be shared and the balancing supplementary allocation shall be determined on the basis of the calculation of revenue sources and spending tasks stipulated in Articles 30, 31, 32, and 33 of this Law in accordance with the budget collection regime, levels of budget allocation, regimes, portions, levels of budget spending, and such norms as population, natural conditions, socio-economic conditions of each region, with attention paid to remote areas, former revolutionary bases, areas of ethnic minorities and areas facing difficulties.

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3. An upper-level budget may provide purposeful supplementary revenue to support the lower-level budget when necessary important tasks emerge, and the latter is not capable of accommodating such tasks even after rearrangement of the budget, and utilization of budget provisions and financial reserve.

CHAPTER IV

Drafting Of State Budget

Article 37

1. The annual State Budget shall be drafted on the basis of the tasks of socio-economic development and the assurance of national security and defense.

2. The revenues in the draft budgets must be determined on the basis of economic growth, related criteria and provisions of law regarding budget revenues.

3. The expenditures in the draft budgets must be determined on the basis of the socio-economic development targets and assurance of national defense and security. For spending on development investment, the drafting must be based on planning, programs, and investment projects which have been decided by the competent authority, with priorities given to securing adequate capital to keep the implementation of such programs and projects to schedule. For the regular spending, the drafting must be based on the sources of revenues from taxes, fees, charges and in compliance with the regimes, norms and levels stipulated by the competent State agencies. For repayment of debts, the drafting must be based on obligations of debt settlement of the drafting year.

4. Decisions on policies, regimes, important tasks, approval of programs and projects financed by the State budget must be in line with annual budget capability and a five-year financial plan.

5. The drafting of State budget must be carried out and based on summary reports from collection agencies and budget utilizing units in accordance with stipulated schedules and forms.

Article 38

1. Annually, the Prime Minister shall decide the elaboration of socio-economic plans and the draft State Budget for the following year.

2. On the basis of the Prime Minister's decisions, the Ministry of Finance shall provide guidance on the requirement, content, and deadlines for drafting the State Budget, inform the control number of the draft State Budget in terms of total and each of revenues and expenditures of ministries, ministerial-level agencies, agencies under the central government, other central agencies and total revenues and expenditures of certain important fields in respect for individual provinces and cities under the central Government.

3. Based on the Prime Minister’s decision and guidelines of the Ministry of Finance, provincial People’s Committees shall provide guidance for drawing up budget estimates of various local levels.

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Article 39

1. The agencies or units responsible for budget revenues and expenditures shall organize the drafting of budget revenues and expenditures within their assigned tasks, report to the upper-level management agency. Such upper-level management agency shall consider, consolidate, and report the drafts to the financial agency of the same level.

2. Provincial People's Committees shall have to prepare the draft local budgets and report to the Standing Committee of the provincial People's Council for consideration and comments. The provincial People's Committees will then send the drafts to the Ministry of Finance and relating agencies for consolidation and preparation of the State budget to be submitted to the Government.

Article 40

1. The Ministry of Finance shall be responsible to check and appraise draft budgets of ministries, ministerial-level agencies, agencies under the Government, and other central agencies, estimates of the local budgets; coordinate with agencies administering industries and fields to consolidate and prepare the draft State Budget, plans on allocation of the central budget in accordance with criteria stipulated in Clauses 3 and 4 of Article 15 of this Law for submission to the Government.

2. Local financial agencies shall be responsible to examine budgets drafted by agencies and units of the same level, and draft budgets of the lower-level localities; coordinate with relating agencies in consolidating and preparing draft local budgets, and plans on allocations of the local budgets of their level in accordance with criteria stipulated in Clauses 1 and 2 of Article 25 of this Law for reporting to the People’s Councils of the same level.

Article 41

During the process of consolidating and drafting the budgets, the financial agencies of various levels shall have the responsibility to:

1. Work with budget drafting agencies and units of the same level to readjust necessary points in the draft budgets;

2. Work with the People’s Committee of the immediate lower level to adjust some necessary points in the draft local budgets in the first year of the period of stable budget. For subsequent years of the period of stable budget, the financial agencies shall work with the People’s Committee of the immediate lower level at the request of such committee; and

3. During the process of drafting the State Budget and devising plans on allocating the central budget, if there is a divergence of views between the Ministry of Finance and other central agencies or the localities, the Ministry of Finance shall report to the Government or the Prime Minister for decision in accordance with the assigned authority. This principle shall also apply during the process of drafting local budgets at all levels.

Article 42

The draft State Budget and plans on allocations of the central budget to be submitted by the Government to the National Assembly shall be attached with the following documents:

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1. Report on implementation of the State Budget in the preceding year, grounds for drafting the State Budget and allocation of the central budget, basic contents and solutions aimed at realizing the draft State Budget;

2. The spending tasks of the State Budget in which the important targets and programs of the national economy and major policies of the Party and State related to the State Budget shall be specified;

3. The tasks of the State Budget revenues, accompanied by solutions aimed at mobilizing revenues for the State Budget;

4. The State Budget overspending and compensation sources; the rate of overspending compared with the Gross Domestic Product;

5. Report on the State's debts, in which the amounts of due debt, overdue debt, amounts of interest to be paid during the year, the debts that will result from compulsory borrowings to compensate for the State Budget overspending, the capability of repaying debts during the year and the amount of debts by the year-end shall be specified;

6. Specific policies and measures aimed at stabilizing finance and the State Budget;

7. List, implementation pace, and investment estimates of the plan year of projects and capital construction works of national importance, which are financed from the State Budget sources in accordance with the National Assembly’s decision;

8. Estimates of spending by ministries, ministerial-level agencies, agencies under the Government, other central agencies, which are categorized by fields of spending; revenue and expenditure tasks, percentage of revenue sharing in respect of revenues to be shared, and supplementary revenue from the central budget to the budgets of individual provinces and cities under the central Government; and

9. Other documents to explain the projected State Budget revenues and expenditures, and the plans on allocations of the central budget.

Article 43

The draft State Budget and plans on allocations of the central budget for the following year shall be delivered to National Assembly deputies ten days at the latest before the opening of the year-end session of the National Assembly of the previous year.

Article 44

The necessary documents attached to the local draft budgets to be submitted to the People's Council shall be stipulated by the Government.

Article 45

1. The National Assembly shall decide the draft State Budget and allocations of the central budget for the following year before 15th November of the previous year.

2. Based on the National Assembly’s resolutions on draft State Budget and allocations of the central budget, resolutions of the Standing Committee of the National Assembly on

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percentages for revenue sharing, the Prime Minister shall assign collection and spending tasks to individual ministries, ministerial-level agencies, agencies under the central Government, and other central agencies, collection and spending tasks, percentages for revenue sharing, and levels of allocations from the central budget to individual provinces and cities under the central Government. Based on budget collection and spending tasks assigned by the upper-level agencies, People’s Committees of various levels shall be responsible to prepare draft local budget, plans on allocations of the local budgets to be submitted to the People’s Councils of the same level and report to the immediate upper-level State administration and financial agencies.

3. Provincial People’s Councils shall decide draft local budgets and allocation of the provincial budgets of the following year before 10th December of the preceding year. Lower-level People’s Councils shall decide draft local budgets and allocations of the budgets of their levels ten days after the immediate upper-level People’s Councils have decided draft local budgets and allocations of the budgets, at the latest.

4. Where draft State budget and plans on allocations of the central budget have not been decided by the National Assembly, the Government shall redraft the State Budget and plans on allocations of the central budget to submit to the National Assembly within the stipulated schedule.

5. Where draft local budget and plans on allocations of the local budget have not been decided by the People’s Councils, the People’s Committee shall redraft the local Budget and plans on allocations of such local budget to submit to the People’s Councils, which must not be later than the schedule stipulated by the Government.

Article 46

During the process of discussion and making decision on the draft budget and budget allocations, the National Assembly and the People's Councils, when deciding the draft budget on increased expenditures or addition of new expenditures, shall consider and decide the solutions to ensure the budget balance at the same time.

Article 47

The Prime Minister may request a provincial People's Council to readjust the draft budget if the disposition of the local draft budget does not conform to the decision of the National Assembly

Chairman of a People’s Committee may request a lower-level People's Council to readjust the draft budget if the disposition of the local draft budget does not conform to the decision of the upper-level People's Council.

Article 48

Based on resolutions of the National Assembly and People’s Councils on draft budgets and budget allocations, the Government shall decide measures to organize and direct the State budget and the central budget, and People’s Committees shall decide measures to organize and direct the local budgets and the budget of their level.

Article 49

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The adjustment of draft budgets shall be as follows:

1. In case of significant changes in the budget compared with the allocated draft budgets, which requires overall readjustment, the Government shall prepare adjusting draft State budget to submit to the National Assembly, and People’s Committees concerned shall prepare adjusted local budget to submit to the relevant People’s Councils in accordance with procedures for preparation of and decision on budgets stipulated in this Law; and

2. In case of urgent commands for national defense and security or for objective reasons which require an adjustment in the budget collection and spending tasks of certain agencies, units and agencies but do not result in major changes in the overall budget and budget balance, the Government shall submit adjustments of the draft State budget to the National Assembly’s Standing Committee for the latter’s decision and report this issue to the National Assembly, and People’s Committees concerned shall submit the relevant People’s Councils adjustments of draft local budgets for the latter’s decision.

CHAPTER VImplementation Of The State Budget

Article 50

1. After being assigned with budgets by the Prime Minister and People’s Committees, central and local State agencies and budget drafting units shall allocate the attached units with budgets, ensuring that the assigned budgets are rightly allocated in terms of both total amounts and details of expenditures, and inform the financial agencies of the same level at the same time. The financial agencies shall be responsible to check and ask for corrections if the allocations are not compliant with the assigned budgets, policies, regimes, norms and levels.

2. The allocations and assignment of budget to budget using units must be completed before 31st December of the preceding year, with exception of provisions of Clauses 4 and 5, Article 45 of this Law.

Article 51

1. Where necessary, agencies, organizations and units which are assigned with a budget by the Prime Minister or a People’s Committee may adjust draft budgets for their attached units within the assigned total amount and details of expenditures, upon agreement with the financial agency of the same level.

2. No other organizations and individuals but the competent agencies which have the authority to assign budgets shall be allowed to change the tasks of assigned budgets.

Article 52

If at the beginning of the budget year, the draft budget and budget allocations are not yet decided by the competent State agencies in accordance with provisions in Clauses 4 and 5, Article 45 of this Law, the financial agencies of various levels shall be entitled to temporarily provide funds for the spending requirements that cannot be delayed until the draft budgets and plans on budget allocations are decided.

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Article 53

1. Agencies and organizations shall, within their tasks and powers, put forth necessary measures to ensure the fulfillment of the assigned tasks regarding budget revenues and expenditures, the practice of thriftiness, combats against wastefulness and embezzlement and strict observance of economic discipline.

2. Organizations and individuals shall have to fulfill their obligations of making contributions to the budget in accordance with provisions of law; to use the State Budget finance for the right purposes, in accordance with regulations, and in an economical and efficient manner.

Article 54

1. Only the financial agencies, taxation agencies, customs agencies, and agencies to which the State assigns the task of budgetary revenue collection (hereafter referred to as the “collecting agencies”) shall be entitled to organize State Budget revenue collection.

2. The collecting agencies shall have the following tasks and powers:

a. To cooperate with the concerned State agencies to organize the collection in conformity with law; be subject to the guidance and control of the People's Committee and supervision by the People's Council with regard to budget revenue collection in the locality; cooperate with the Vietnam Fatherland Front and its member organizations in campaigning among organizations and individuals for fulfilling their obligations of budget contribution in accordance with provisions of this Law and other provisions of law;

b. To manage and conduct the collection of taxes and other revenues payable by organizations and individuals to the State Budget; and

c. To check and control sources of revenue to the State budget; and to inspect the discharge of the task of collection and payment to the State Budget, and handle acts of violation in accordance with provisions of law.

3. All budget revenues shall be paid directly to the State Treasury. In special cases, the collecting agencies shall be permitted to organize direct collection, but have to make timely and full payment to the State Treasury in accordance stipulations of the Minister of Finance.

Article 55

1. The collecting agencies of various levels shall, within their tasks and powers, have to supervise and check the organizations and individuals that are obliged to contribute to the budget to ensure that these organizations and individuals make full and timely contributions to the State Budget.

2. Where organizations and individuals cannot settle amounts payable to the State budget in time for objective reasons, they must notify the competent agencies of such delay and may defer the settlement only with the competent agencies’ permission. Otherwise, the banks and State Treasury shall, at the request of the collecting agencies, make deductions from the deposit accounts of the organizations and individuals that have delayed their

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settlement of contributions to the State Budget or apply other administrative measures to collect for the budget.

Article 56

On the basis of the assigned draft State budgets and requirements for performance of tasks, heads of the budget using units shall decide spending and send such a decision to the State Treasury. The State Treasury shall verify legitimacy of the required documents in accordance with provisions of law and execute direct budget payment if the conditions stipulated in Clause 2, Article 5 of this Law are met. The Minister of Finance shall provide concrete guidelines on this method of payment in line with actual conditions.

Article 57

1. Regular spending shall be financed regularly during the year. Seasonal spending or significant procurement shall be factored into quarterly estimates of expenditures.

2. Spending on capital construction investment shall be supplied fully and in conformity with the planned tempo within the assigned plan.

3. Advance payment shall be made for urgent projects and spending tasks before estimates are established.

Article 58

1. Heads of the budget using units shall be responsible for managing and using State budgets and properties in accordance with the policies, regimes, criteria, norms and assigned budget. Any violations will be handled in accordance with provisions of Article 73 of this Law. Persons in charge of accounting and finance in the budget using units shall be responsible for complying the regimes of financial and budgetary management, and State accounting. [The persons in charge of accounting and finance in the budget using units] shall carry out regular checking in order to uncover and prevent or propose with the head of the financial units and agencies of the same level solutions to deal with breaches.

2. The head of the State Treasury shall have the right to reject payment or spending which does not meet the conditions stipulated in Clause 2, Article 5 of this Law and be accountable for his/her decision.

3. Financial agencies shall be responsible for allocating resources to execute spending in the budget, check the execution of spending and have the right to halt expenditures which are out of the allowed sources or not accordant with the policies, regimes, and standards. [The financial agencies] shall have the right to ask the budget assigning agencies to adjust spending tasks and budget of the latter’s attached agencies with the aim of ensuring that the budget will be implemented to meet specified goals and schedule.

Article 59

During the implementation of the State Budget, changes in revenue and expenditure (if any), shall be treated a follows:

1. The increase in the revenue and the savings from the expenditure, as compared with the approved estimates can be used to reduce overspending, increase spending on debt

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payment, increase spending on development investment, supplement the financial reserve fund, or to increase budget provisions. The Government shall draft plans on budget utilization in respect of individual spending tasks and report them to the National Assembly’s Standing Committee for comments before implementation. The People’s Committees shall draft plans on budget utilization in respect of individual spending tasks and agree with the Standing Committee of the People’s Councils on such plans before implementation. For commune level, the People’s Committees shall agree with the Chairman or Vice Chairman of the People’s Councils before implementation;

2. In case the revenue is lower than the approved estimates as decided by the National Assembly and the People’s Councils, the Government shall report to Standing Committee of the National Assembly, [provincial] People’s Committees shall report to the Standing Committee of the People's Councils, and commune People’s Committees shall report to the People's Councils to make adjustments to reduce some corresponding expenditures;

3. In case unexpected spending is required which is higher than the estimate but which can neither be delayed nor met by contingency reserve, the Prime Minister or the Chairman of the People's Committee shall rearrange all the expenditures in the assigned draft budgets or utilize reserve sources so as to meet such unexpected spending requirements in accordance with provisions in Clause 2, Article 9 of this Law;

4. In case of major changes in the revenues or expenditures in comparison with decided budgets, which requires overall adjustments, the Government shall submit the National Assembly, and People’s Committees concerned shall submit the People’ Councils of the same level adjustments of the budget estimates in accordance with provisions in Clause 1, Article 49 of this Law;

5. Annually, in case of an increase in the revenue in the central budget from revenue sharing with local budgets, compared with the budget estimates, the Government may decide to channel a percentage (%) of such increase to the local budgets as a reward. The percentage ratio shall not exceed 30% of the increased revenue.

Based on the rewards decided by the Government, provincial People’s Committees shall report the People’s Councils of the same level to decide the use of the rewards for investing in infrastructure construction, implementing important tasks, or rewarding the lower-level budgets;

6. On a regular basis, the Government shall report to Standing Committee of the National Assembly, People’s Committees shall report to Standing Committee of the People’s Councils, and commune People’s Committees shall report to the People’s Councils on compliance with provisions in Clauses 1, 2, 3, and 5 of this Article; and

7. In case of temporary deficit of the State Budget fund, the financial reserve fund and other legal financial sources shall be advanced for remedy. For the central budget if the financial reserve fund and such other legal financial sources fail to close the deficit, the State Bank shall make advance payment to the central budget as decided by the Prime Minister. The State Bank’s advance payment must be reimbursed within the budget year, except for special cases to be decided by Standing Committee of the National Assembly.

Article 60

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1. Organizations and individuals liable to contribute to or responsible to use the State budget are required to report on budget revenue and expenditures, and prepare accounting statements, statement of final accounts, and other financial reports regularly in accordance with provisions of law.

2. Financial agencies of the same level may temporarily suspend budget spending by organizations and individuals who fail to comply with the regimes of accounting statements, statement of final accounts, and other financial reports and be accountable for their decision.

CHAPTER VIAccounting, Auditing And Final Accounts Of State Budget

Article 61

1. The organizations and individuals responsible for the State Budget revenue and expenditure shall have to organize the accounting, reporting and making budget accounts in accordance with the State regime of accounting.

2. The State Treasury shall organize accounting the State Budget, report on the implementation of the estimated budget revenues and expenditures to the financial agencies of the same level and State agencies concerned.

The Minister of Finance shall provide detailed regulations on accounting of the State budget and a financial reporting regime.

Article 62

1. At the end of a budget year, the Minister of Finance shall provide guidance on closing the book of accounts and drawing up the final budget accounts in conformity with the contents specified in the approved estimates of the year and the List of State Budget.

2. All revenues of the preceding years' budgets paid in the following year must be entered in the following year's budget. Budget expenditures which are not yet made or fully made as at 31st December and will continue to be made in the following year as per the competent authority’s permission, shall continue to be made pending adjustment of the final accounts of the preceding year’s budget expenditures, and shall be accounted in the following year's budget if the transfer is allowed.

Article 63

Fifty percent (50%) of the closing balance of the central budget or provincial budget shall be transferred to the financial reserve fund, the other fifty percent (50%) shall be transferred to the following year's budget. If the financial reserve fund has reached the required limit, the remaining amount shall be transferred to the following year's budget revenue. The closing balance of the budget of the other local levels shall be carried over to the following year's budget.

Article 64

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1. On the basis of the guidance of the Minister of Finance, the heads of the units tasked with budget revenue and expenditure shall establish their respective units' final accounts of revenue and expenditures to be submitted to the immediate higher managerial body.

2. For capital investment projects, at the end of a budget year, the project owners must prepare final accounts of budget utilized during the year. Upon completion of the project, the project owners shall prepare and report final accounts of the construction in accordance with provisions of law.

3. The data of the accounts shall be verified and certified by the State Treasury at the place of transaction.

4. The heads of the upper-level budget drafting units shall have the responsibility to:

a. Examine and approve the budget revenue and expenditure accounts of the units directly under their management, and be accountable for the approved final accounts. Establish the balance sheet of the budget revenues and expenditures under their management and send them to the financial agencies of the same level;

b. Check attached units’ procurement, management and use of State properties; and

c. With respect to large-scale projects and tasks, propose the State Auditor or use audit services to have additional basis for approving final accounts in accordance with the Government’s regulations.

Article 65

1. The local financial agencies shall consider and approve final budget revenue and expenditure accounts of agencies of the same levels, examine final budget accounts of lower-level agencies, to consolidate and establish the accounts of the local budget to be submitted to the People's Committee of the same level for consideration and the People's Council of the same level for ratification, and report to the immediate higher State administrative agencies and financial agencies.

2. The Ministry of Finance shall consider and approve final budget revenue and expenditure accounts of ministries, ministerial-level agencies, agencies under the central Government, and other central agencies; consolidate and establish the accounts of the State Budget to be submitted to the Government.

3. During the process of appraising the final accounts, the financial agencies shall have the right to request the agencies which approve the final accounts to make corrective adjustments, and at the same time, to deal with or propose to deal with the violations in accordance with provisions of law. Where final accounts of a local budget contain some errors, the upper-level financial agency shall have the right to request the People’s Committees to submit corrective adjustments the People’s Councils, and at the same time, to deal with or propose to deal with the violations in accordance with provisions of law.

Article 66

1. The State Auditor shall perform the audit and ascertain the reasonableness and legitimacy of statements of final accounts of the State budget at various levels, and relevant agencies and units in accordance with provisions of law.

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2. Upon completion of the audit, the State Auditor shall have independence in and be responsible before law for its audit opinions. Where necessary, the State Auditor may ask for competent agencies’ support in performing its tasks.

3. The State Auditor shall be responsible to report audit results to the National Assembly, the Standing Committee of the National Assembly, the Government and other agencies in accordance with provisions of law. The State Auditor shall perform an audit at the request of the National Assembly, the Standing Committee of National Assembly, and the Government.

4. An audit of final accounts of the budget shall be performed before the National Assembly and the People’s Councils approve of the final accounts. An audit which is carried out after the National Assembly and the People’s Councils have approved of the final accounts shall be accordant with provisions of law.

Article 67

1. The National Assembly shall consider and ratify the State Budget accounts within 18 months, and People's Councils shall consider and ratify the accounts of the local budget within 12 months after the end of a budget year at the latest. Provincial People's Councils shall specify a schedule for ratifying final budget accounts of the lower-level People's Councils, which is in no case later than six months after the end of a budget year.

2. In case the final budget accounts are not yet ratified by the National Assembly or the People's Council, the Government or the People's Committee shall, within their tasks and powers, and the State Auditor which have audited, continue to clarify issues raised by the National Assembly or the People's Council so as to submit them to the National Assembly or the People's Council at a date to be decided by the National Assembly or the People's Council.

Article 68

During the process of examination, consideration and approval of the budget revenue and expenditure accounts, the following requirements must be met:

1. The revenues collected not in accordance with provisions of law shall be returned to the organizations or individuals that have paid them; all the compulsory revenues that have not been collected shall be fully collected for the State Budget; and

2. Expenditures made not in accordance with provisions of law shall be recovered for the State Budget.

CHAPTER VIIExamination, Inspection, Reward And Handling Of Violations

Article 69

With their tasks and powers, State management agencies and budget drafting units shall have the responsibility to examine the implementation of regimes on budget revenue, expenditure and management, and management of State properties.

Article 70

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1. The financial inspectors shall have the task of inspecting the observance of law on budget revenues, expenditures and management of State properties by organizations and individuals.

In conducting of an inspection, the financial inspectors shall have the right to ask organizations and individuals concerned to present related documents. Upon detecting any violations, the financial inspectors shall have the right to recommend the competent agencies to recover expenditures which were not made in compliance with the regimes and other revenues collectible to the State budget. Depending on the nature and extent of such violations, the financial inspectors shall have the right to deal with or recommend the competent State agencies to deal with the violations in respect of the breaching organizations and individuals in accordance with provisions of law.

The financial inspectors shall be accountable for their inspection conclusions.

2. The Government shall specify rights, duties, and responsibilities of the financial inspectors in the inspection of management and utilization of the State budget and properties.

Article 71

1. The organizations and individuals that record achievements in implementing the State Budget shall be rewarded in accordance with provisions of law.

2. Effective management of budgets, thrifts, increased investment in development, increased revenue, improved regulatory capability of the upper-level budget, and reduced balancing supplementary revenue from the upper-level budget shall be a basis for assessment and rewarding.

Article 72

The following acts shall be regarded as violations of the law on the budget:

1. Concealing revenue sources, delay or fail to perform the obligation of payment to the budget;

2. Permitting the exemption or reduction of budget payments and use of revenue in case such acts are incompliant with the regulations or the assigned authority;

3. Taking advantage of position and powers to appropriate or cause losses to the revenue sources of the State Budget and State properties;

4. Collecting revenues not in accordance with provisions of law;

5. Making expenditures not for the right purposes, and not in accordance with approved draft budget;

6. Approving final accounts of the budget not in accordance with provisions of law;

7. Carrying out the accounting contrarily to the State regime of accounting and the List of State Budget;

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8. Declaring and paying taxes in wrong amounts by organizations and individuals that are allowed to self-assess tax liabilities;

9. Managing invoices and vouchers not in accordance with the regimes; illegal buying and selling, correcting, and using invoices and vouchers, and producing false invoices and vouchers;

10. Delaying budget spending and finalization; and

11. Other acts contrary to provisions of this Law and other relevant legal documents.

Article 73

The organizations and individuals that commit acts of violation of the law on budget shall have to make compensation for any losses and damages caused. Depending on the nature and the seriousness of the violation, the offenders shall be subject to disciplinary measures, administrative sanctions or examined for penal liability in accordance with provisions of law.

Article 74

All organizations and individuals shall be entitled to lodge complaints, institute legal proceedings, and denounce acts of violation of the law on budget. The lodging of complaints, instituting of legal proceedings, and denunciations shall be implemented in accordance with provisions of law.

CHAPTER VIIIImplementation Provision

Article 75

On the basis of the provisions of this Law, the Prime Minister shall provide for the management and use of the State Budget and properties in respect of certain activities in the field of national defense and security, special financial and budgetary regimes for Hanoi and Ho Chi Minh City, report this to the Standing Committee of the National Assembly for comments before execution, and report to the National Assembly at the nearest session.

Article 76

This Law takes effect from the 2004 budget year. This Law shall replace the 1994 Law on State Budget and the 1998 Law on amending and supplementing a number of articles of the Law on State Budget. All previous provisions contrary to this Law are annulled.

The State Budget revenues, expenditures and final accounts and issues arising from the implementation of the State. Budget prior to the entry into force of this Law shall be applied in accordance with the laws currently in force.

Article 77

The Government shall provide detailed regulations and guidance for the implementation of this Law.

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This Law was approved by the National Assembly of the Socialist Republic of Vietnam, Legislature XI, 2nd session on December 16, 2002.

Chairman of the National Assembly NGUYEN VAN AN

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