Resolution 115/2020/QH14 on piloting specific financial-budgetary mechanisms and policies for Hanoi city promulgated by the National Assembly

RESOLUTION

PILOTING CERTAIN PARTICULAR FINANCIAL – BUDGET MECHANISMS AND POLICIES TAILORED FOR HANOI CITY

THE NATIONAL ASSEMBLY

Pursuant to the Constitution of the Socialist Republic of Vietnam;

Pursuant to the Law No. 80/2015/QH13 on promulgation of legislative documents;

HEREBY RESOLVES:

Article 1. Scope

This Resolution stipulates the pilot application of certain particular financial – budget mechanisms and policies to Hanoi City with respect to management of state budget revenues and expenditures, outstanding balance of borrowed funds and use of financial reserve fund.

Article 2. Regulated entities

1. Regulatory authorities, political organizations and socio-political organizations.

2. Socio-professional political organizations, social organizations and socio-professional organizations.

3. Other relevant organizations and individuals.

Article 3. Management of state budget revenues

1. The People's Council of Hanoi City decides to charge certain types of fees in Hanoi City based on specific characteristics of Hanoi City. To be specific:

a) Collect fees which are not included in the List of fees and charges enclosed with the Law on fees and charges;

b) Adjust amounts or rates of fees which are included in the List of fees and charges enclosed with the Law on fees and charges and have been approved by competent authorities, except fees wholly owned by the central budget.

2. The pilot implementation of fee collection policies in Hanoi City as prescribed in Clause 1 of this Article shall comply with the following principles:

a) Ensure there is a roadmap suitable for the socio-economic situation, the 10-year socio-economic development strategy for the 2021-2030 period, the 05-year financial plan for the 2021-2025 period as well as the degree of and demands for socio-economic development of Hanoi City; create favorable production and business environment, especially for small- and medium-sized enterprises, business lines and industries eligible for investment incentives;

b) Ensure the consistency in the market without obstruction of the movement of goods and services; regulation policies must be rational and conformable with the development of Hanoi City and lawful sources of income of organizations and individuals in Hanoi City;

c) Publicly and explicitly implement administrative reforms, including those in management of fees and charges.

3. Hanoi City’s budget shall wholly own the increase in revenues from collection of the fees prescribed in Clause 1 of this Article and use it for making investment in socio-economic infrastructure facilities and paying economic, science and technology, educational, health and social welfare expenditures which must be covered by Hanoi City's budget but shall not use it for determining the distribution ratio (%) of revenues of the central budget to these of Hanoi City’s budget.

4. Hanoi City’s budget may retain 50% of total amount of collected land levy when selling public property attached to land in Hanoi City, which are managed by central-level agencies, organizations and individuals (except national defense and security agencies and units), in accordance with the Law on management and use of public property (after having deducted all expenses incurred from selling of public property attached to land and transfer of land use rights, and relocation or building of material facilities at new locations as prescribed in the Law on management and use of public property), and use it for making socio-economic infrastructure investment which is included in Hanoi City’s public investment duties.

5. Hanoi City’s budget shall be entitled to the entire proceeds from the arrangement and equitization of state-owned enterprises, disinvestment of state funds in enterprises in which the People's Committee of Hanoi City exercises the rights and duties of the owner of state funds in accordance with regulations of the Law on state budget and use such proceeds as supplementary amounts of funding for socio-economic infrastructure investment which is included in Hanoi City’s public investment duties.

Article 4. Management of state budget expenditures

1. Based on the annual state budget estimate decided by the National Assembly and assigned by the Prime Minister, and the reality of Hanoi City, the People's Council of Hanoi City shall decide the budget estimate and allocate Hanoi City’s budget in consistent with orientations of budget restructuring, socio-economic development and other key sectors in accordance with regulations issued by the National Assembly and Government.

2. Hanoi City shall implement the mechanism for raising funds for salary reform as prescribed. After Hanoi City's budget has sufficient funding for salary reform and implementing other social security policies for the full period of budget stability as prescribed by competent authorities, the People's Council of Hanoi City may decide to use the remaining funding for salary reform of Hanoi City's budget and allow its budget subdivisions to use the remaining funding for salary reform for making socio-economic infrastructure investment which is included in Hanoi City’s public investment duties.

3. The People's Council of Hanoi City shall decide to:

a) use the local budget for recurrent expenses for making investment in upgrade, renovation, expansion and building of essential work items such as fire prevention and fighting, garbage collection and treatment, water supply and drainage, electricity, equipment, restroom and fences in existing premises of administrative agencies, public service providers, and units affiliated to socio-political organizations managed by Hanoi City in accordance with regulations of the Law on state budget. In case of building of a new essential work item worth VND 01 billion or more, the investment project or decision to approve technical – economic report, accompanied with the technical – economic report, must be approved or issued by competent authorities before allocating budget estimate and the works must be built through bidding and managed as a public investment project;

b) use Hanoi City’s budget for supporting other provinces and allow district-level governments to use their district budgets to support other disadvantaged districts of Hanoi City in prevention, control and recovery from disaster and epidemics, and implementation of national target programs for sustainable poverty reduction and development of new-style rural areas.

Article 5. Outstanding balance of borrowed funds and use of financial reserve fund

1. The outstanding balance of borrowed funds of Hanoi City’s budget shall not be allowed to exceed 90% of the amount of revenues that Hanoi City’s budget is received according to the stated mandate. Hanoi City’s budget revenues shall be identified on the basis of the estimate of Hanoi City’s budget revenues decided by National Assembly in the budget year.  Total borrowed fund and deficit of Hanoi City's budget shall be annually decided by the National Assembly in accordance with regulations of the Law on state budget.

2. The People's Committee of Hanoi City shall request the People's Council of Hanoi City to decide to advance the financial reserve fund for executing investment projects included in the medium-term public investment plan, for which approval decisions have been issued, and included in spending duties of Hanoi City’s budget in accordance with regulations of the Law on public investment and relevant laws if execution progress of such projects must be hastened. The duration of that advance shall not exceed 36 months from the date of grant of such advance.  Total advanced amount at a given time shall not be allowed to exceed 50% of the balance of the financial reserve fund of Hanoi City by December 31 of the previous year; the People's Committee of Hanoi City shall prepare and submit the decision on allocation of annual public investment fund derived from state budget to these projects to the People's Council of Hanoi City for recovering advanced funding and refunding it to the financial reserve fund in accordance with regulations of law.

Article 6. Implementation

1. This Resolution comes into force from August 15, 2020 and will be implemented within 05 years.

With regard to a single matter, if regulations herein are contrary to those in laws or resolutions of the National Assembly, regulations herein shall prevail. If any legislative documents promulgated after the effective date of this Resolution prescribe incentive policies or mechanisms creating more favorable conditions than those in this Resolution, the application of these documents shall be decided by the People's Council of Hanoi City.

2. The Government shall, within the ambit of its assigned duties and power, take responsibility to:

a) organize the implementation of this Resolution and instruct relevant agencies to cooperate with the People's Committee of Hanoi City in adjusting administrative procedures and shortening the time for dealing with issues not authorized to Hanoi City;

b) instruct the People's Committee of Hanoi City to prepare preliminary and final review of the implementation of this Resolution for reporting to the National Assembly at the meeting at the end of the year 2022 and 2025 respectively, and making proposals for completing piloted mechanisms and policies.

3. The People's Council and People's Committee of Hanoi City shall, within the ambit of their assigned duties and powers, organize the implementation of this Resolution.

The People's Committee of Hanoi City shall prepare preliminary and final review of the implementation of this Resolution, report it to the People's Council of Hanoi City and to the Government for reporting it to the National Assembly for consideration and decision in accordance with regulations in Clause 2 of this Article.

4. The Standing Committee of National Assembly, Ethnic Minorities Council, Committees of National Assembly, Deputies of National Assembly in Hanoi City and Deputies of National Assembly shall, within the ambit of their assigned duties and powers, supervise the implementation of this Resolution.

This Resolution is ratified by 14th National Assembly of the Socialist Republic of Vietnam in the 9th session held on June 19, 2020.

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