New proposals on revenue sources and expenditure tasks of budgets at all levels

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The Ministry of Finance is seeking comments on the draft Law on State Budget (amended). Accordingly, the draft proposes to amend and supplement a number of contents on "Revenue sources and expenditure tasks of budgets at all levels" as follows:

Regarding the decentralization of revenue sources between the central budget and local budgets: For the group of revenue items that the central budget and local budget enjoy 100% of, it is basically kept as per current regulations; however, the draft proposes to amend and supplement the adjustment of value added tax on imported goods and environmental protection tax on imported gasoline and oil (according to the current Law, the central budget enjoys 100%), land use fees and land rents (according to the current Law, the local budget enjoys 100%) will be divided between the central budget and local budget.

At the same time, specifically stipulate in the Law the ratio of each revenue item divided between the central budget and the local budget for each group of localities in accordance with Conclusion No. 93 of the Politburo (this proposed plan is based on the current provincial-level administrative unit, the ratio of dividing these revenues will be re-determined by the Ministry of Finance according to the provincial-level administrative unit decided by the National Assembly to ensure compliance with the goal of strengthening decentralization, delegation of power, resource autonomy and the socio-economic development situation of the locality).

As for value added tax, after the value added tax refund, the central budget will be divided into 70% and the local budget into 30%. The division for each locality will be carried out according to the principles and criteria decided annually by the National Assembly Standing Committee.

In the implementation organization, in case the central budget reduces its leading role or there are large fluctuations in state budget revenue and expenditure among localities, the Government shall submit to the National Assembly to adjust the ratio of dividing the above-mentioned revenue items accordingly.

The reason and basis for the proposed amendment and supplement are to overcome the shortcomings and limitations of the State Budget Law, leading to a decreasing trend in the leading role of the central budget (central budget revenue in total state budget revenue in 2000 was 75%, in 2011 it was 61.8%, by 2020 it was 52.2% and by 2024 it was only 51%), while the proportion of local budget revenue is increasing according to the scale of annual revenue increase according to Conclusion No. 93-KL/TW of the Politburo on continuing to innovate the mechanism of decentralization of management and allocation of the state budget to ensure the leading role of the central budget and the initiative of local budgets, relevant agencies and units; Resolution No. 18-NQ/TW dated June 16, 2022 of the 5th Conference of the 13th Party Central Committee on continuing to innovate and perfect institutions and policies, improving the effectiveness and efficiency of land management and use, creating momentum to turn our country into a high-income developed country: "Land financial policies must ensure harmony of interests of the State, land users and investors, have a mechanism to reasonably and effectively regulate revenue from land use fees and land rents between the Central and local levels; study and have policies to regulate land rent differences, ensuring publicity and transparency".

Regarding the decentralization of spending tasks between the central budget and local budgets, the Ministry of Finance said that the draft regulations basically inherit the provisions of the current State Budget Law, and at the same time propose to amend and supplement the scope of the fields of science, technology, innovation and digital transformation to institutionalize Resolution No. 97-NQ/TW dated December 22, 2024 of the Politburo on breakthroughs in science, technology, innovation and national digital transformation.

Regarding the principle of decentralization of revenue sources and tasks between local budgets at all levels, it is proposed to amend in the direction of removing the principle when the People's Council decentralizes revenue sources and spending tasks between local budgets at all levels to the district and commune levels, to give the initiative to the Provincial People's Council, the amended Law: "The Provincial People's Council decides on specific decentralization of revenue sources, including the percentage (%) of dividing revenue items and spending tasks between local budgets at each level in accordance with the decentralization of socio-economic, defense and security tasks for each field and the economic, geographical, population characteristics and management level of each region and locality".

This proposed amendment and supplement aims to empower the provincial People's Councils and is consistent with the direction of eliminating the district level according to Conclusion No. 127-KL/TW dated February 28, 2025 of the Politburo on a number of contents and tasks to continue to arrange and streamline the organization and apparatus of the political system in 2025.

Regarding "Support for the implementation of a number of large and especially important programs and projects that have a great impact on local socio-economic development", the draft proposes to remove the provision: "The support level is specifically determined for each program and project. The total annual development investment capital support level of the central budget for local budgets specified in this point shall not exceed 30% of the total basic construction investment expenditure of the central budget".

According to the Ministry of Finance, the proposal to remove the above regulation is to ensure compliance with the direction of decentralizing authority to localities as well as implementing investment programs and projects, central agencies are limited in implementing project investment; then, the central budget will support localities in implementing programs and projects.

Please read the full draft and give your comments here.

Source: https://thoibaonganhang.vn/de-xuat-moi-ve-nguon-thu-nhiem-vu-chi-cua-ngan-sach-cac-cap-162157.html