Kinhtedothi - The 2024 Capital Law has adjusted and supplemented a pilot mechanism on finance and budget to create an open and favorable institution for Hanoi to be flexible and proactive in arranging and using the budget to serve development investment...
Mobilizing financial resources and budget for the development of the Capital (Article 34)
Financial and budgetary policies and resource mobilization for the development of the Capital are stipulated in Chapter IV.
Resolution No. 15-NQ/TW orients: “Mobilize and effectively use all resources to best exploit the potential and advantages of the Capital in culture, science and technology. Promote the leading role and create momentum for public investment combined with encouraging and promoting capital sources from the private sector, foreign investment sector, donors and international organizations…; unblock, mobilize and effectively use resources from land and resources associated with the development of infrastructure systems and socio-economic development planning”.
The Capital Law 2024 institutionalizes this orientation of Resolution No. 15-NQ/TW in the direction of promoting decentralization in the investment sector, simplifying investment procedures, enhancing incentives and investment support, diversifying new investment models and methods, thereby helping to attract social investment to support capital sources from the state budget; effectively exploiting land resources and public assets to realize investment goals to develop a green, smart and modern Hanoi Capital.
Regarding the mobilization of financial resources and budget for the development of the Capital, it is stipulated in Article 34. In which, additional revenue sources from the Central budget for the City budget: Revenue sources include the Central budget as a reward for the City budget (Clause 1, Article 34); the Central budget with additional targets for the City budget ensures that the Central budget does not have a deficit and does not exceed the total increase in Central budget revenue in the area compared to the previous year (Clause 2, 3, Article 34).
New sources of revenue for the city budget: Revenue from the application of a number of fees and charges in the city that are not specified in the List of fees and charges issued with the Law on Fees and Charges; adjustment of the level or rate of fee and charge collection decided by competent authorities for the types of fees and charges specified in the List of fees and charges issued with the Law on Fees and Charges. The collection of fees and charges in the city must have a roadmap; be consistent with the capacity and development requirements of the city; create a favorable production and business environment for enterprises, especially small and medium enterprises, and investment incentive sectors and occupations; not cause negativity or affect security, order and social safety; ensure market unity, not hinder the circulation of goods and services; implement reasonable regulation of a number of goods, services and legal sources of income of organizations and individuals in the city; ensure publicity, transparency, and state administrative reform (Clause 4, Article 34).
Revenue from the City People's Committee borrowing through the issuance of local government bonds, borrowing from domestic financial institutions, other domestic organizations, foreign loans from the Government to the City and from the Government bonds issued with the total outstanding loan balance not exceeding 120% of the City's budget revenue according to decentralization. In case of needing to mobilize loans larger than this level to implement the City's key projects, the City People's Committee reports to the Government for consideration and submission to the National Assembly for decision. Every year, the National Assembly decides, the Prime Minister assigns the total loan amount and the City's budget deficit level (Clause 6, Article 34).
Revenue from the city budget is retained in the entire central budget portion according to the division ratio of land use fees and land rental fees under the city's management authority to focus on creating priority resources to support the relocation of agencies, units and facilities on the list of those required to be relocated as prescribed in Clause 3, Article 18 of the 2024 Capital Law and support the implementation of key projects of the capital (Clause 7, Article 34).
Revenue from the city budget is entitled to 100% of revenue from carbon credit transactions from programs and projects under the carbon credit exchange and offset mechanism using the city budget (Clause 8, Article 34).
Revenue from innovation in the method of exploiting public assets in a number of fields (form of concession contracts for exploitation and management to exploit cultural, sports infrastructure works and items, valuable architectural works; use of public assets for lease, joint ventures, and associations in accordance with the functions and tasks of public service units assigned to manage public assets) (clauses 1, 2, 3, Article 41).
Use of financial resources and budget for the development of the Capital (Article 35)
The 2024 Capital Law stipulates specific policies to create an open and favorable institution for the Capital to flexibly and proactively arrange and use the budget for development investment, overcoming the obstacles of the current Budget Law and Public Investment Law. Specifically, the Law empowers the City People's Council to:
Decision on using salary reform resources: Decide to use the remaining salary reform resources of the city budget and allow lower-level budgets to use the remaining salary reform resources to invest in developing socio-economic infrastructure under the expenditure tasks of local budget levels, to spend additional income for cadres, civil servants and public employees under the management of the city with a total expenditure not exceeding 0.8 times the basic salary fund of cadres, civil servants and public employees managed by the city after ensuring sufficient resources to implement salary reform for the entire period of budget stabilization according to regulations of competent authorities and ensuring the implementation of social policies, social security and social welfare issued by the Central Government and the city (points a and b, clause 1, Article 35).
Decision on using the city budget: Support for relocation, new construction, and land arrangement for subjects on the list of subjects required to relocate according to regulations (point c, clause 1, Article 35).
Support central agencies in performing tasks of socio-economic development, national defense, security, order and social safety in the city, support other localities in the country or support other countries when necessary; allow district-level administrative units to use their budget to support other district-level administrative units of Hanoi City and district-level administrative units of other provinces and centrally run cities in preventing, combating and overcoming the consequences of natural disasters and epidemics, implementing national target programs and social security and social welfare tasks (Point d, Clause 1, Article 35).
Implement investment projects, works, projects of a linking and regional development nature between the Capital and other localities, national highway and expressway projects passing through the city in accordance with the planning (Point d, Clause 1, Article 35).
Regulations on regimes, standards, and expenditure norms for spending tasks using the city budget: The City People's Council regulates regimes, standards, and expenditure norms for spending tasks using the city budget that are higher than or not yet included in the regulations of superior state agencies to carry out socio-economic development tasks, ensure implementation of social policies, social security, social welfare, national defense, security, order, and social safety of the Capital, in accordance with the balancing capacity of the city budget (Point e, Clause 1, Article 35).
On December 8, 2024, at the 14th Session, the Hanoi People's Council passed 4 resolutions related to the fields of finance and budget.
Accordingly, the resolutions passed include: Approval of the State budget revenue and expenditure settlement of the City in 2022; Local budget estimates and city-level budget allocation in 2024 (including allocation of career capital and public investment capital in 2024; Updating the structure of the Public Investment Capital Plan in 2023; Updating and adjusting the 5-year medium-term public investment plan 2021-2025 at the city level)...
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