Removing legal hurdles in regular spending for capital assets

Mr. Bui Anh Binh

In recent times, National Assembly Deputies and a number of ministries, branches and localities have said that there are difficulties and obstacles in using regular expenditures from the State budget to purchase assets and equipment; renovate, upgrade, expand and build new construction items in invested and constructed projects. Could you please tell us your opinion on this issue?

Recently, due to ambiguities in the regulations, there have been various interpretations regarding the application of the Law on Public Investment and the Law on State Budget.

Clause 1, Article 6 of the Law on Public Investment stipulates provisions on the procurement of assets, repair, upgrading of machinery and equipment, renovation, upgrading, expansion, and new construction of project components in already invested construction projects.

This regulation has led to the interpretation that all new construction, renovation, upgrading, expansion, asset procurement, repair, and upgrading projects must be allocated from public investment capital, meaning they must be included in the medium-term public investment plan to be implemented.

This is not in line with actual practices as renovation, upgrading, and procurement tasks, especially for small-scale projects, occur frequently and cannot wait for the formulation of a medium-term public investment plan.

Moreover, there is another interpretation, which is that the Law on State Budget stipulates the regular state budget expenditure to carry out regular tasks (including tasks such as asset procurement, repair, upgrading of equipment; renovation, upgrading of construction works).

According to the regulations of public investment law, the source of state budget investment expenditure is used to implement investment projects (including equipment procurement projects, renovation, and upgrading of construction works).

Because of these different interpretations, over the past time, some ministries, sectors, and localities have hesitated in allocating the regular state budget expenditure to procure assets, equipment; renovate, upgrade, expand, and newly construct components and projects in already invested projects.

To solve these difficulties and problems, as a management agency, what solutions has the Ministry of Finance implemented, sir?

In response to the government's directive to improve legislation, and based on practical experiences and a review of relevant legal documents, the Minister of Finance and the Party Committee of the Ministry of Finance promptly reported to the Government and the Prime Minister, seeking the opinion of the National Assembly Standing Committee on the need for guiding regulations to address the aforementioned difficulties.

Based on the guidance of competent authorities and the strong consensus of ministries, agencies, and localities consulted by the drafting agency, the Ministry of Finance submitted to the Government a draft decree on the regulations for budgeting, managing, and using the regular state budget for the procurement of assets, equipment; renovation, upgrading, expansion, and new construction of project components in already invested construction projects.

On October 24, 2024, on behalf of the Government, Deputy Prime Minister Ho Duc Phoc signed and promulgated Decree No. 138/2024/ND-CP, which takes effect immediately upon signing.

The promulgation of the Decree with immediate effect is expected to promptly resolve difficulties related to the use of the state budget for the procurement of assets, equipment; renovation, upgrading, expansion, and new construction of project components in already invested construction projects.

The provisions of this Decree contribute to accelerating the assigned tasks, including the Project on Developing the Application of Population Data, Electronic Identification and Authentication to serve the National Digital Transformation in the period 2022-2025, with a vision to 2030.

Could you please tell us the main contents of this Decree?

This Decree stipulates the budgeting, allocation, management, use, and settlement of regular state budget expenditures as prescribed in Clause 6, Article 4 of the Law on State Budget to carry out tasks, including: procurement of assets and equipment in accordance with the law on public asset management and use; renovation, upgrading, expansion, and new construction of project components in already invested construction projects in accordance with the law on construction, management, and use of public assets.

The provisions of the Decree create conditions for ministries, sectors, and localities to proactively use regular expenditures to carry out tasks and projects outside the approved medium-term public investment plan, and to proactively implement assigned tasks, especially those related to socio-economic development.

This Decree clearly specifies the scope and authority for each group of tasks; the procedures, documents, and records for preparing, allocating, managing, using, and settling the funds for implementing tasks.

Specifically, the renovation, upgrading, expansion, and new construction tasks are limited to a maximum of VND15 billion per task; the authority to decide and approve the task and budget for the procurement of assets and equipment is specified for tasks under VND 45 billion, from VND 45 billion to under VND 120 billion, and for tasks of VND 120 billion or more.

I believe that these regulations have created a legal framework to promptly resolve difficulties, allowing ministries and agencies to immediately implement them.

Thank you!