Amending Law on Prices: Priortise to apply Law on Prices if there is a difference in regulation

The Ministry of Finance is consulting for draft of Law on Prices (amended)

The Law on Prices No. 11/2012/QH13 approved by the National Assembly at the third session of the 13th National Assembly took effect from January 1, 2013. Along with that, the legal documents stipulating specific guidance have been promulgated. It has created a legal framework for price management and administration of the State.

However, other Codes and Laws also regulate prices. In particular, some regulations are duplicated while some are expanded, and even some regulations cause conflicts and overlap with the Law on Prices.

First of all, there are regulations related to state valuation. The Ministry of Finance pointed out that the list of goods and services that are priced by the State as prescribed in the Law on Prices is aimed at avoiding unnecessary abuse. Simultaneously, with the regulation on the list are regulations on authority (assignment, decentralization), form of valuation, valuation method, valuation process and responsibility in implementation.

However, in practice, when developing specialized laws, there are regulations related to state valuation leading to duplication, contradictions and overlaps. Specifically, there are additional regulations on goods and services that are subject to state valuation outside the list in the Law on Prices, the Law on Road Traffic, supplementing service prices for exiting and entering bus stations as prescribed by the Provincial People's Committee (Article 83); Law on Railways 2017 supplements the price of transporting passenger services on urban railways prescribed by the provincial People's Committees (Articles 56, Article 67); Law on Property Auctions 2016 supplements the price bracket for asset auction services prescribed by the Ministry of Finance (Article 78).

The Ministry of Finance said that the supplement of the list by the Laws comes from the urgent requirement to meet the practical requirements in state management, but it also leads to the situation that the supplemented lists of goods and services is duplicated, overlapping in many Laws, even in decrees and circulars, leading to limit ations for control, monitoring, aggregation and centralization. Meanwhile, according to regulations, when adjusting the list, the Ministry of Finance will coordinate with ministries and sectors to submit to the Government for submission to the Standing Committee of National Assembly for consideration and decision.

The Ministry of Finance also said that currently, the goods and services that are supplemented in the specialized law do not ensure compliance with the principles for determining the list of goods and services to be priced by the state as prescribed in Article 2 of this Article 19 of the Law on Prices. Through the review and evaluation, it was found that some additional items did not meet the principles in the Law on Prices such as providing service for exiting and entering the bus station; nine other aviation services in Circular 36/2015/TT-BGTVT, service prices to support transaction activities, remuneration for asset auction services.

Notably, at present, there is a lack of synchronous regulations on the form and competence of valuation when there are additional regulations on goods and services appraised by the State outside the list. As well, there is no consensus on the process of appraisal and submission to the competent authority to decide the price between the specialized law and the Law on Prices.

For example, the Law on Prices stipulates that the Government shall detail the valuation process, but in some cases, besides stipulating more goods and services in specialized laws, it also stipulates the process of appraising goods and services and it does not unify with the process in Decree 177/2013/ND-CP.

Taking an example of electricity valuation, according to the provisions of Decree 177/2013/ND-CP, the Ministry of Industry and Trade develops a price plan and submits it to the Government after receiving the appraisal of the Ministry of Finance. However, according to the Law on Electricity, the Ministry of Industry and Trade only has to consult the Ministry of Finance on the price plan.

Commenting on those shortcomings, the Ministry of Finance said that the regulation has its own valuation method, but it did not have rules on conditions to limit  construction and issuance. So it led to a number of cases of promulgating the method but it was actually the cost method combined with more detailed guidance in determining some specific costs which are not necessary.

If continuing to follow this principle, it may lead to failure to ensure uniformity, synchronization and difficulty to avoid legal conflicts. The assignment of ministries and sectors to guide separate valuation methods for goods and services under their management will lead to the fact that many methods are scattered in specialized laws and will be difficult to control and affect the application, even causing overlaps, conflicts, and a lack of agreement with the basic principles in the common valuation method.

In the draft Law on Prices (amended), the Ministry of Finance has proposed the principle of prioritizing the application of the Law on Prices in case there are different provisions on a number of issues of a principled nature in the Law on Prices.

Accordingly, the Draft stipulates “in case that other Laws stipulate provisions on goods and services to be appraised by the State, the competence and responsibility for valuation; price valuation shall comply with the provisions of this Law (the draft revised Law on Prices if adopted)”.