RESOLUTION NO 272016QH14 DATED NOVEMBER 11, 2016, ON STATE BUDGET ESTIMATES OF 2016 27 2016 QH14 334547

State budget deficit is VND 178,300 billion one hundred seventy eight thousand and three hundred billion, equivalent to 3.5% of gross domestic products GDP, including: Central government

NATIONAL ASSEMBLY

-SOCIALIST REPUBLIC OF VIETNAM Independence - Freedom - Happiness

RESOLUTION

ON STATE BUDGET ESTIMATES OF 2016

THE NATIONAL ASSEMBLY OF THE SOCIALIST REPUBLIC OF VIETNAM

Pursuant to the Constitution of the Socialist Republic of Vietnam;

Pursuant to the Law on State budget No 83/2015/QH13 and the Resolution No 25/2016/QH14 dated November 09, 2016 by the National Assembly on National 5-year financial plans for the 2016-2020 period;

Upon the consideration of the Report No 467/BC-CP dated October 19, 2016 and No 522/CP-KTTH dated November 09, 2016 by the Government; the Inspection report No 183/BC-UBTCNS14 dated October 19, 2016 by the Finance and Budget Committee; the Report No 54/BC-UBTVQH14 dated November 11, 2016 by the Standing committee of the National Assembly of the Socialist Republic of Vietnam and the National Assembly’s enquiry reports,

RESOLVES:

Article 1 Approval for state budget estimates of 2017

1 Estimated gross state budget balance revenue is VND 1,212,180 billion (one million two hundred

twelve thousand one hundred and eighty billion)

2 Estimated gross state budget balance revenue is VND 1,390,480 billion (one million three

hundred ninety thousand four hundred and eighty billion)

3 State budget deficit is VND 178,300 billion (one hundred seventy eight thousand and three hundred billion), equivalent to 3.5% of gross domestic products (GDP), including:

Central government’s budget deficit is VND 172,300 billion (one hundred seventy two thousand and three hundred billion), equivalent to 3.38% of GDP;

Local government’s budget deficit is VND 6,000 billion (six thousand billion), equivalent to 0.12%

of GDP

4 Estimated loan of the state budget, including loans taken to make up for the deficit and loans

taken to pay loan principals of the state budget is VND 340,157 billion (three hundred forty

thousand one hundred and fifty seven billion)

(Enclosed with the Annexes No 1, 2, 3 and 4)

Article 2 Government's responsibilities

1 Execute closely the fiscal policies; cooperate consistently which monetary policies to support the development of production and business, continue to stabilize macroeconomics, control the

inflation and boost the economic growth Reinforce the disciplines on finance - budget; implement state budget estimate according to law Strengthen the inspection and the explicitness and

transparency in the use of the state budget, especially in areas most likely to raise corruption and/or extravagance

2 Direct the conduct and implementation of laws on tax and promptly provide guidance on the conversion of a number of types of charge to service prices according to law Strengthen the

investigation and inspection of taxation; prevent the loss of revenue, smuggling, trade frauds, production and trade of counterfeits, price transfer and tax evasion; promptly discover and handle the unconformable declaration, fraud or evasion of taxes Minimize the promulgation of new

policies which lead to the decrease of the State budget revenue

3 From 2017, the revenues of road pricing collected for each vehicle, marine security charges (after deducting the collection costs) will be specified in the gross state budget balance revenue and will

be used for maintaining the road network and ensure the marine security

4 Distribute the revenues of environment protection tax on petroleum products between the central government’s budget and local government’s budget according to regulations of the Law on State budget

5 By 2017, transfer 100% of revenues of special excise duty on petroleum products of Nghi Son Refinery to the central government’s budget From 2018, when the refinery operates stably, the transfer of revenues will be redistributed according to law

6 Collect 72% of interests from the trade of oil and gas of the host country, interests distributed from joint Russian-Vietnamese enterprise “Vietsovpetro” and the document reading’s incurred amount of money in 2017 The remaining amount (28%) will be given to Vietnam National Oil and Gas Group to make investment according to law

7 Guide local governments to include the revenue from lottery operations in the balance revenue of local government’s budget and use the whole of such revenue for development investment under the decision of provincial People’s Councils, where the investment in education, training, vocational training, healthcare, agricultural development and climate change response shall be prioritized Arrange the expenditure on food safety management and assurance in local area in proportion to the revenue from penalties for administrative violations against regulations on food safety which is transferred to local government’s budget

8 Ensure the rate of publication of Government bonds having term of not less than 5 years at least 70% of total amount of Government bonds to answer to the requests for capital mobilization for the State budget, schedule structure of debt portfolio, risk management and bond market development

9 Direct the State budget expenditure according to the assigned estimates Save thoroughly on recurrent expenditure of each Ministry, central and local authorities; minimize the expenditure on the organization of conferences, seminars, festivals; limit the expenditure on overseas

research/survey trips; limit the expenditure on purchase of vehicles and expensive equipment; encourage the limitations on employment of public automobiles reasonably and efficiently Enhance the administrative reform in the State budget expenditure management Promulgate policies on increasing the State budget expenditure only when it is actually necessary and with available

sources Manage closely and minimize the state budget estimate advances and brought forward expenditure Must not convert on-lent loans or government-guaranteed loans into state budget

allocation Strictly comply with the Law on Thrift practice and waste prevention and the Anti-corruption Law

10 Adjust the base salary from VND 1.21 million per month to VND 1.3 million per month,

increase the retirement pension, social insurance allowance and benefit to people meritorious to the Revolution an amount equal to the increase in the base salary Time for such activities is from July

01, 2017

Assign Ministries and central and local authorities to be self-controlled in extra pay, on the basis of the assigned state budget estimates, to regulate the increase in base salary

Central government’s budget shall guarantee the funding for adjustment of retirement pension, social insurance allowance (covered by the state budget) and benefit to people meritorious to the Revolution; support partially the extra pay for a number of poor localities whose budgets cannot be balanced according to regulations of the Government

11 In 2017, issue VND 50,000 billion of Government bonds to invest in essential and urgent constructions and projects in medium-term public investment plans Estimated government bond capitals in 2016 which have not been used may be transferred for use in 2017

The management of spending from the state budget to serve the investment in development must comply with law provisions Strengthen the mobilization of domestic and foreign resources for development investment, complete the legal basis to enhance public-private partnership, enabling economic sectors to participate in infrastructural construction, especially in agriculture and rural areas and tourism sector

Guide local governments to use supplements serving certain purpose to prioritize the support related

to housing for households of people meritorious to the revolution

12 From 2017, direct responsible local governments to initially arrange the payment of loan

principals and interests according to the Law on State budget

13 Closely monitor the State budget deficit; put forward positive measures to minimize the deficit Reinforce the inspection and supervision of applications for loans, use of loans and debt payment, especially new loans and Government-guaranteed loans Ensure balance of public debts,

government debts and national foreign debts within prescribed limits

14 Direct Ministries and central and local authorities to boost the self-control of non-business unit

in association with the roadmap for accurate calculation of public service prices and, on that basis, decrease the direct aid for non-business unit to increase the spending on support for poor people and beneficiaries of incentive policies and create funding for salary reform and for supporting the purchase and maintenance to increase public service quality Adjust prices of articles under the state management toward the market price, ensuring to make up reasonably for the production and trading cost to attract the investment from other economic sectors

Article 3 Supervision of implementation

The Standing committee of the National Assembly, the Finance and Budget Committee, the Council

of Ethnic Affairs, committees of the National Assembly, delegations of the National Assembly, and deputies of the National Assembly shall be responsible for supervising the implementation of this Resolution within their responsibility and power as prescribed

This Resolution has been ratified in the 2nd Meeting Session of the 14th National Assembly dated November 11, 2016.

CHAIRMAN OF NATIONAL ASSEMBLY

Nguyen Thi Kim Ngan

APPENDIX No 1

STATE BUDGET BALANCE IN 2017

(Enclosed with the Resolution No 27/2016/QH14 dated November 11, 2016 by the National

Assembly)

Unit: Billion dong

A- ESTIMATED GROSS REVENUE OF STATE

3 Balance revenue from export-import operations 180,000

B

- ESTIMATED BALANCE EXPENDITURE OF

6 Expenditure on pay reforms and staff downsizing 6,600

C

1 Deficit of the central government’s budget 172,300

D- PAYMENT OF LOAN PRINCIPALS (2) 163 , 846

1 Payment of loan principals by central government’s budget 144,000

- From loans

- From the surplus and increase of revenues, the

economical spending and the residual

144,000

2 Payment of loan principals by local government’s budget 19,846

- From the surplus and increase of revenues, the

economical spending and the residual 7,309

DD

Notes:

(1) The difference between the deficit and the surplus of local government

(2) By offsetting payment of principals against the surplus, economical spending, residual and local government’s budget surplus, the amount of loans taken to pay loan principals shall be around VND 156,537 billion

APPENDIX No 2

REVENUE AND EXPENDITURE BALANCE OF CENTRAL GOVERNMENT’S BUDGET

AND LOCAL GOVERNMENT’S BUDGET IN 2017

(Enclosed with the Resolution No 27/2016/QH14 dated November 11, 2016 by the National

Assembly)

Unit: Billion dong

1 Expenditure depending on the tasks of the central government’s budget according to decentralization 647,400

1 Local government’s budget revenue received according to decentralization 482,450

2 Supplement revenue from central government’s budget 254,630

1 Expenditure to balance local government's budget 682,700

2 Expenditure from source of supplement serving certain purpose 60,380

APPENDIX No 3

ESTIMATES OF REVENUE OF STATE BUDGET BY CATEGORY OF 2017

(Enclosed with the Resolution No 27/2016/QH14 dated November 11, 2016 by the National

Assembly)

Unit: Billion dong

7 Revenue from house and land 76,555

c Revenue from land rental or water surface rental 11,398

dd Revenue from state-owned house sale or lease 249

10 Revenue from public land and other yields of public property 1,473

III Balance revenue from export-import operations 180,000

a Import & export duties, special consumption tax, exports

b VAT on imported goods (gross revenue) 183,300

APPENDIX No 4

EXPENDITURE ESTIMATES OF THE STATE BUDGET, CENTRAL GOVERNMENT’S BUDGET AND LOCAL GOVERNMENT’S BUDGET ACCORDING TO EXPENDITURE

STRUCTURE OF 2017

(Enclosed with the Resolution No 27/2016/QH14 dated November 11, 2016 by the National

Assembly)

Unit: Billion dong

DIVIDED

Central government’s budget

Central government’s budgetLocal government’s budget ESTIMATED GROSS EXPENDITURE

OF STATE BUDGET 1,390,480 (1) 707,780 (2) 682 , 700

I Investments in development 357,150 179,700 179,700177,45 0

III Payment of loan interests 98,900 98,900 98,900

0

Where:

1 Expenditure on education - training and

2 Expenditure on science and technology

VI Expenditure on pay reforms and staff downsizing 6,600 6,600 6,600

Notes:

(1) Including the supplement serving certain purpose to local government’s budget; having

deducted the balance supplement to local government’s budget

(2) Including the balance supplement of VND 194,250 billion from central government’s budget to local government’s budget; not including the supplement serving certain purpose from central government’s budget to local government’s budget

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