Revising regulations on State budget management

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VCN – the Ministry of Finance announced the consultation on the draft Decree amending and supplementing Decree 24/2016/ND-CP of the Government defining the regime of state budget management.

Some regulations on state budget management will be added and amended. Photo: Thuy Linh
Some regulations on state budget management will be added and amended. Photo: Thuy Linh

Many problems in budget management

The Ministry of Finance said that Decree 24/2016/ND-CP, effective since 2016, has initially created a solid legal framework for implementing state treasury management operations in a modern manner, meeting the goals of a safe and effective state management, and complying with international practices. More than five years after implementing the Decree, the State budget management has achieved some important results, contributing to improving the efficiency of the use of State financial resources and closely linking the State budget management and debt management, and supporting the State Bank of Vietnam in operating monetary policy.

However, the implementation of the decree revealed problems and shortcomings. For example, on the principles of state management, Decree 24/2016/ND-CP has not specified the principle of using temporarily idle state funds, so it is necessary to add the principle of using temporarily idle state fund in VND.

As for the deadline for formulating and approving the plan on State budget management, Decree 24/2016/ND-CP stipulates that before the 20th of the last month of the quarter or before December 20 of the year, the State Treasury submits the plan on State budget management of the next quarter/year to the Ministry of Finance; the Ministry of Finance shall approve the plan before the first day of the following quarter or before January 1 of the following year. However, the Ministry of Finance said that, to develop the plan for the next quarter/year, it is necessary to re-evaluate the current quarterly/yearly state budget collection and spending. But, state budget revenues are usually paid at the end of the month. Therefore, the assessment of the performance of the current quarter’s state budget must be conducted later than the described time.

In addition, there are currently some problems with implementing Decree 24/2016/ND-CP. These include the use of temporarily idle NQNN; redemption of term government bonds; measures to settle shortage of state budget in foreign currency; precautionary measures.

Therefore, the Ministry of Finance believes that it is necessary to issue a Decree amending and supplementing Decree 24/2016/ND-CP in order to perfect the legal basis in the state budget management, ensuring consistency in legal documents (in consistency with the Law on Public Debt Management, the Law on Fees and Charges and other relevant documents); and overcome problems during the implementation of Decree 24.

Ensuring safe and effective state management

In the immediate future, the Ministry of Finance will review and propose amendments and supplements to the Law on State Budget 2015, which includes more specific regulations on state budget management.

On the basis of the revised Law on State Budget, the Ministry of Finance proposes to the Government amendments to deposit of temporarily idle state fund at commercial banks (after being used for advances and loans to State budget) prescribed in Decree 24/2016/ND-CP.

In addition, the guiding documents of the new Decree of the Ministry of Finance will specify the principle of prioritizing the use of temporarily idle state funds for state budget advances and loans to ensure effective state budget management and save borrowing costs and ensuring liquidity for the State Treasury.

According to the Ministry of Finance, the promulgation of the Decree amending and supplementing Decree 24 aims to improve the legal basis in the state budget management, ensure consistency in the system of legal documents and overcome some problems during the implementation of Decree 24/2016/ND-CP.

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The Ministry of Finance will review and finalize the Decree to ensure it is consistent with the provisions of relevant Laws and Decrees and reform state budget management in the direction of the State Treasury Development Strategy to 2030. The Decree will also inherit the appropriate provisions of Decree 24 and amend and add some regulations, solving shortcomings and limitations in the implementation of Decree 24.

By Thuy Linh/ Huyen Trang

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