Revenues from business ownership transition to be paid to State budget

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Enterprises with 100% state-owned capital and high finance will be prioritized for investment Photo: Internet

Revenues must be paid to the State budget

The Ministry of Finance said that five key policies are provided in the draft decree.

First, the current revenue management model of enterprise arrangement and development support fund is transitioned into the direct collection to the State budget; the Central budget and local budget is decentralized in accordance with the 2015 Law on State Budget.

Second, regulations on payment of revenues from restructuring and equitization of state-owned enterprises and public service delivery units and state capital transfer in enterprises to the State budget are specified.

Third, stipulating prioritized expenditures from the State budget for supporting the process of arrangement, restructuring, equitization of enterprises and public service delivery units and state capital transfer in enterprises.

Fourth, refunding revenues from arrangement, restructuring, equitization of enterprises, public service delivery units and state capital transfer in enterprises to localities that have paid to enterprise arrangement and development support fund since the effective date of the 2015 Law on State Budget.

Fifth, handling the existence of late payment interest from the equitization of SOEs, and revenues from the transfer of state capital in enterprises.

The draft decree regulates revenues from business ownership transition, state capital transfer and the difference of equity that is higher than that of charter capital after deducting expenses for restructuring enterprises, public service delivery units must be paid fully to the State budget.

The revenues and expenditures from the State budget as prescribed in this draft Decree must be made regarding the estimate.

The revenues from central enterprises, public service delivery units are remitted to the Central budget; the revenues from local enterprises and public service delivery units are paid into local budget. Additional expenditures are only implemented when approved by competent agencies and given priority to expenditures on development investment according to the provisions of this Decree. The estimate for development investment expenditure will comply with the Law on State Budget, the Law on Management and Use of State Capital for production and business in enterprises and the Law on Public Investment.

The Ministry of Finance supplements the provision that revenues from state capital transfer in enterprises transferred the right to present the ownership of state capital to SCIC, must be paid to the State budget according to the Government’s direction (if any).

This provision is supplemented on the basis of reviewing the actual budget management of the Government and the Prime Minister to add the budget revenues (through the enterprise arrangement and development support fund) for expenditures under the Resolution of the National Assembly, the direction of the Government and the Prime Minister as well as the supplementation and management of the budget in the next period in the context of budget revenue difficulties.

According to the Ministry of Finance, the remittance of these revenues to the State budget still complies with the provisions of the Law on State Budget (collection of state capital invested in central and local economic organizations).

Re-investment in enterprise development is prioritized

Regarding additional expenditures of the State budget, the draft decree stipulates the recurrent expenditures and development investment expenditures. The recurrent expenditures are payments to reimburse overpaid amounts and compensate the deficit of the State expenditures in accordance with the Law on equitization and other forms of ownership transition and arrangement and the State capital transfer, including expenditures for handling redundant labor, reducing staff; payments to compensate expenditures related to equitization.

The development investment expenditures include two expenditure groups. The expenditure for the state capital investment in enterprises under provisions of the Law No. 69/2014/QH13 includes the State capital investment to establish enterprises with 100% charter capital held by the State; additional investment in the charter capital for enterprises with 100% charter capital held by the State; additional state capital investment to continue maintaining the proportion of the State's shares and contributed capital in joint-stock companies, limited liability companies with two or more members; state capital investment to buy back part or the whole of the enterprise.

The Ministry of Finance said that the development investment expenditures include expenditures for important projects, bringing high socio-economic efficiency and handling urgent socio-economic issues according to the Party's orientation and the National Assembly’s Resolution. In addition, the development investment expenditure is supplemented in the central budget under the Resolution of the National Assembly

According to the Ministry of Finance, the draft decree aims to improve the institutions, enhance the efficiency of management and use of revenues from the restructuring of state capital in enterprises in accordance with the provisions of the Law on State budget. This revenue must be fully and promptly paid and included in the annual state budget estimate, the financial plan, the medium-term plan for public investment.

The promulgation of this Decree is also to manage and use revenue effectively, ensuring publicity and transparency. The revenue is used to reinvest for development, improve the performance of enterprises in which 100% charter capital is owned by the State, and establish and develop enterprises with 100% charter capital held by the State with strong financial resources, large investment funds of the State, and support the restructuring of SOEs and being used for development investment spending in accordance with the Law on State Budget.