1. Overview of the Public Budget in Vietnam

The public budget in Vietnam is a financial plan that outlines the government's expected revenues and expenditures for a specific fiscal year. It plays a crucial role in economic management, public service delivery, and social welfare.

2. Legal Framework and National Regulations

The public budget in Vietnam is governed by several key laws and regulations:

• Law on State Budget (2015): This is the primary legal document that regulates the formulation, implementation, and management of the state budget. It outlines the principles of budgetary management, including transparency, accountability, and efficiency.

• Law on Public Investment (2019): This law governs the management of public investment projects, ensuring that public funds are used effectively and in alignment with national development goals.

• Decree No. 163/2016/ND-CP: This decree provides detailed guidelines on the implementation of the Law on State Budget, including budget classification, budget planning, and reporting.

• Circulars from the Ministry of Finance: Various circulars provide specific instructions on budget preparation, execution, and reporting.

3. Structure of the Public Budget

The public budget is typically divided into three main components:

• Central Budget: Managed by the central government, it includes revenues from taxes, fees, and other sources, and is allocated to various ministries and sectors.

• Local Budgets: Managed by provincial and municipal governments, local budgets are funded by local revenues and transfers from the central budget. Each locality has the autonomy to allocate funds according to its development needs.

• Social Insurance Fund: This fund is used for social security programs and is financed through contributions from employers and employees.

4. Budget Preparation Process

The budget preparation process in Vietnam involves several key steps:

1. Drafting: The Ministry of Finance (MoF) prepares a draft budget based on economic forecasts, revenue estimates, and expenditure needs.

2. Consultation: The draft is discussed with relevant ministries, local governments, and stakeholders to gather input and make adjustments.

3. Submission: The final draft is submitted to the National Assembly for approval. The National Assembly reviews, debates, and votes on the budget.

4. Implementation: Once approved, the budget is implemented by various government agencies, with the MoF overseeing the process.

5. Monitoring and Reporting: Regular reports on budget execution are submitted to the National Assembly, ensuring transparency and accountability.

5. General Costs and Expenditures

• Revenue Sources: The main sources of revenue for the public budget include:

  • Taxes (corporate income tax, personal income tax, value-added tax, etc.)
  • Fees and charges
  • State-owned enterprise profits
  • Foreign aid and loans

• Expenditures: Major expenditure categories include:

  • Public investment (infrastructure, education, health)
  • Social welfare programs
  • Administrative expenses
  • Defense and security

6. Country-Specific Considerations

• Decentralization: Vietnam has been moving towards decentralization, allowing local governments more autonomy in budget management. This can lead to variations in budget priorities and execution across regions.

• Public Debt Management: The government has regulations in place to manage public debt, ensuring that borrowing is sustainable and does not exceed limits set by the National Assembly.

• Transparency and Accountability: The government is committed to improving transparency in budget management, with initiatives aimed at enhancing public access to budget information and involving citizens in budget discussions.

• Impact of Economic Changes: Economic fluctuations, such as those caused by the COVID-19 pandemic, can significantly impact budget revenues and expenditures, leading to adjustments in budget planning and execution.

7. Conclusion

Understanding the public budget in Vietnam requires familiarity with its legal framework, structure, and processes. The budget is a vital tool for economic management and public service delivery, reflecting the government's priorities and strategies. For visitors and immigrants, being aware of how the public budget operates can provide insights into the country’s governance and development priorities.

If you have any specific questions or need further details on any aspect of the public budget in Vietnam, feel free to ask!