Balancing budget of Dong Nai to meet the task of expenditure following the estimate

Dong Nai is one of the few localities where the domestic revenue exceeds the assigned estimate. Source: Internet

According to the recommendations of voters in Dong Nai province, in 2021, due to the Covid-19 pandemic, some provinces and cities have been affected and suffered heavy losses in human and economic resources. Voters suggested that it was necessary to study a plan to leave an adequate percentage of state revenue for localities that were severely affected by the pandemic in order to create conditions for localities to recover and develop their economies.

Regarding this issue, the Ministry of Finance said, according to the provisions of the Law on State Budget, the central budget, the budget of each local government level was decentralized with specific revenue sources and spending tasks; the division was carried out by following the percentage of the revenues divided between the budget levels and the additional amount allocated from the superior budget to the lower level budget on the basis of ensuring fairness, balanced development among regions and localities. At the same time, during the period of budget stability, the percentage of revenue distribution between budget levels remains unchanged.

2021 is an extended year of the state budget stabilization in the 2017-2020 period. The rate of regulation of revenue distribution of Dong Nai province is 47% (the local budget is entitled by following the decentralization), and the province needs to comply with the provisions of the Law on State Budget.

For 2022, according to the provisions of the Law on State Budget and Resolution No. 122/2020/QH14 dated June 19, 2020 of the National Assembly, which was the first year of the new budget stabilization period, the determination of the percentage of the division of revenues divided between the central budget and local budgets for each locality (including Dong Nai province) is based on the state budget revenue estimate and local budget expenditure estimate calculated following the principles, criteria and allocation norms (investment expenditures, recurrent expenditures) promulgated by the National Assembly Standing Committee; on that basis, the Government submits to the National Assembly for making a decision.

At the same time, the Law on State Budget (Clause 8, Article 9) stipulates: “After each period of budget stability, localities must increase their ability of self-balance, develop local budgets, and gradually reduce the rate of adding balance from the superior budget compared to the total local budget expenditure or increase the percentage paid to the superior budget for the revenues divided among budget levels in order to increase resources for the superior budget spending for implementing national expenditure tasks and equal development among localities”.

Based on the Directive No. 20/CT-TTg of the Prime Minister on socio-economic construction and development and the state budget estimate in 2022, the actual results of budget revenue in the first eight months of the year, the Ministry of Finance has worked with the locality (with the Secretary and Chairman of the Provincial People's Committee) and agreed to submit to the Government for submitting to the National Assembly for assessing domestic revenue in 2021 of Dong Nai province.

Therefore, despite the difficulties in the prevention and control of the Covid-19 pandemic, the budget balance of Dong Nai province basically meets the spending tasks according to the estimate.

At the same time, the Ministry of Finance agreed with the People's Committee of Dong Nai province to determine the estimate of domestic revenue in 2022 (excluding land-use levy, lottery, dividends and profit after tax, excluding unexpected events) increased by 6.6% compared to the implementation estimate in 2021, appropriate with the Prime Minister's Directive.

Along with local budget expenditures calculated by following the principles, criteria and norms for the allocation of state budget estimates (investment and recurrent expenditures) decided by the National Assembly Standing Committee and the above budget revenue estimates, the ratio of the budget regulation rate of Dong Nai province in 2022 is 45%, declining by 2% compared to the previous period (appropriate with Clause 8, Article 9 of the Law on State Budget).

On November 13, 2021, the National Assembly passed Resolution No. 40/2021/QH15 on the allocation of the central budget in 2022. Accordingly, the percentage of the revenue distribution between the central budget and local budget of Dong Nai province is 45%.

With a regulation rate of 45%, the local budget balance expenditure estimate in 2022 (investment expenditures from domestic capital sources, excluding investment expenditures from land use levy and lottery; recurrent expenditures) of the province increased compared to the 2021 estimate of VND484 billion.

According to the Resolution of the National Assembly, the percentage of distribution of central budget and local budget revenues as mentioned above applies only to 2022. Based on the actual situation, in 2023, the National Assembly will re-stipulate.