Joint circular 11/1998/TTLT/BTM-UBDTMN-BTC-BKHDT

THE MINISTRY OF TRADE - THE COMMISSION ON ETHNIC MINORITIES AND MOUNTAINOUS AREAS - THE MINISTRY OF FINANCE - THE MINISTRY OF PLANNING AND INVESTMENT JOINT CIRCULAR No. 11/1998/TTLT/BTM-UBDTMN-BTC-BKHDT OF JULY 31, 1998 GUIDING THE IMPLEMENTATION OF THE GOVERNMENT'S DECREE No. 20/1998/ND-CP OF MARCH 31, 1998 Pursuant to Decree No. 20/1998/ND-CP of the Government of March 31, 1998 on trade promotion in the mountainous regions, islands and areas inhabited by ethnic minority people, the Ministry of Trade, the Commission on Ethnic Minorities and Mountainous Areas, the Ministry of Finance and the Ministry of Planning and Investment hereby jointly guide some contents on building markets and State-owned stores; price and freight subsidies; the State enterprises engaged in trade activities in mountainous regions, islands and areas inhabited by ethnic minority people; and the management of reserve capital for policy commodities as follows: I. SCOPE AND OBJECTS OF REGULATION 1. The following geographical areas are subject to Decree No. 20/1998/ND-CP: 1.1. Mountainous regions: including highland mountainous provinces, provinces with mountainous districts and provinces with mountainous communes as defined by the Commission on Ethnic Minorities and Mountainous Areas in Decision No. 21/UB-QD of January 4, 1993, Decision No. 33/UB-QD of June 4, 1993, Decision No. 08/UB-QD of March 4, 1994, Decision No. 64/UB-QD of August 26, 1995, Decision No. 68/UB-QD of September 6, 1997 on the recognition of communes, districts and provinces as mountainous and/or highland ones. 1.2. Islands: as prescribed by the Commission on Ethnic Minorities and Mountainous Areas. 1.3. Areas inhabited by ethnic minority people: to be guided later by the Commission on Ethnic Minorities and Mountainous Areas. 1.4. Mountainous regions, islands and areas inhabited by ethnic minority people: Based on the development level of each region, they are classified into 3 regions (I, II and III) as defined in Decision No. 42/UB-QD of March 25, 1997 and Decision No. 21/1998/QD-UBDTMN of February 25, 1998 on the recognition of the three regions. In case of any readjustment in geographical areas and regions, the regulations of the Commission on Ethnic Minorities and Mountainous Areas shall apply. 2. Objects: 2.1. Subjects entitled to be sold with price and/or freight-subsidized commodities: people (including State officials and employees, officers and soldiers of the armed forces) living and working in the geographical areas defined in Item I.1 of this Circular. 2.2. Subjects enjoying the policy of freight subsidy in the sale of products: Traders conducting trade activities in areas defined in Item I.1 of this Circular, selling products (on the list of products defined by the Prime Minister) turned out by people in such areas. 2.3. Traders: All business subjects (individuals or legal entities), regardless of their economic sectors (the State economic sector, the cooperative economic sector, the State-capitalist sector, foreign-invested enterprise operating under the Law on Foreign Investment in Vietnam, individual economic sector, private capitalist sector), that have business registration, conduct one or many trading acts such as purchase and/or sale of goods, provision of trading services and/or trade promotion activities on markets in the mountain regions, islands and/or areas inhabited by ethnic minority people for benefits, are all traders subject to the regulation of Decree No. 20/1998/ND-CP. The following commercial activities by traders are also subject to the regulation of Decree No. 20/1998/ND-CP: - Traders having head-offices and business registration not in mountainous regions, islands and/or areas inhabited by ethnic minority people but conducting trade activities in either of the regions (I, II, III) in mountain areas, islands and/or areas inhabited by ethnic minority people. - Traders having their head-offices and business registration in either of the regions (I, II, III) but conducting trade activities in other mountainous regions, islands or areas inhabited by ethnic minority people. Traders shall enjoy preferential policies when having vouchers or invoices, accounting books clearly showing the business results in each region and already registered with concerned bodies (tax, banking, land administration...). II. BUILDING MARKETS, STATE STORES OR TRADE SERVICE COOPERATIVES AT CENTERS OF COMMUNE CLUSTERS OF EACH REGION 1. For region III: Markets and stores or trade service cooperatives are included in the programs for building centers of mountainous and/or highland commune clusters under Decision No. 35/TTg of January 13, 1997 of the Prime Minister, the order, procedures and capital sources for construction thereof shall be as follows: - The main source of investment capital come from the State budget (the central budget, the local budgets and financial assistance of international organizations); besides, organizations and individuals shall be encouraged to voluntarily invest capital in production and business, expand goods exchanges and mobilize obligatory public labor in accordance with the provisions of law. - The provincial Trade Services shall base themselves on the planning for the construction of centers of commune clusters in region III (the particularly difficult mountainous regions, islands and ethnic minority areas) to coordinate with concerned Services and Departments in drawing up annual plans to be submitted to the provincial Planning and Investment Services for sum-up and submission to the provincial People's Committees. - When each project for the construction of a commune cluster's center is included in the investment plan, the project owner shall have to give priority to the arrangement of investment capital for the building of the market, State stores or trade service cooperatives right in the first phase of the project, and inform the provincial Trade Service and concerned departments and branches thereof for coordinated organization of implementation. 2. For region II: As the markets and stores or trade service cooperatives have not yet been included in the programs for the construction of centers of commune clusters under Decision No. 35/TTg of January 13, 1997 of the Prime Minster, the presidents of the provincial People's Committees shall consider the following conditions to decide the investment with the local budgets in the construction thereof on appropriate scale: - The market and stores must be included in their respective province's overall planning diagram on the construction of the centers of the commune clusters, which was already approved. - Having urgent need to build the market in order to stabilize the life, promote the economic restructure of subregions, develop the commodity production in order to boost the goods exchanges and cultural activities of the people of communes within the subregions and between the subregions and other regions. The provincial Trade Service shall base itself on the actual situation to coordinate with concerned branches in drawing up the annual plan to be reported to the provincial People's Committee for approving the investment capital. Basing himself/herself on the approved plan, the president of such People's Committee shall decide the investment in the construction of the market, State store(s) or trade service cooperatives. 3. For region I: Markets and stores in towns, provincial capitals, district townships and areas with interprovincial and/or interdistrict communication axis: As in these areas, traffic is fairly convenient and the socio-economic development has reached certain level, the sources of investment capital for the construction thereof shall be mobilized according to the guiding principle "joint efforts by the State and traders": - The State shall render partial support in budget for investment in the construction of market infrastructure such as ground leveling, power supply, water supply and drainage, sanitation facilities... - Traders shall contribute capital for the construction of kiosks, pavilions, goods stalls, market structures, and shall be entitled to use market spaces according to capital contributing contracts between traders and the market management body. - Mobilizing capital from medium- and long-term credit sources at preferential interest rates (including the National Investment Support Fund). - Encouraging investment in the form of build-operate-transfer (B.O.T) according to Circular No. 12/BKH-QLKT of August 27, 1997 of the Ministry of Planning and Investment. The provincial Trade Service shall base itself on the market development planning to draw up plan for the development of each type of market in this area, then submit it to the provincial People's Committee for consideration and decision. 4. The provincial Trade Service shall perform the function of specialized management over the operation of the market according to Circular No. 15/TM-CSTNTN of October 16, 1996 of the Ministry of Trade. The administrative management of the market shall comply with the regulations on market management assignment defined in Section II of Circular No. 15/TM-CSTNTN of October 16, 1996 of the Ministry of Trade. III. PRICE AND/OR FREIGHT SUBSIDY FOR THE SALE OF SOCIAL POLICY COMMODITIES AND THE PURCHASE OF A NUMBER OF PRODUCTS MANUFACTURED IN MOUNTAINOUS REGIONS, ISLANDS AND/OR AREAS INHABITED BY ETHNIC MINORITY PEOPLE 1. Subjects defined in Item I.2.1. shall be entitled to buy at commune clusters' centers (the commodities with price and/or freight subsidies brought to commune clusters' centers) or at the district centers (the commodities with freight subsidy transported to the district centers) as specified in Decree No. 20/1998/ND-CP of March 31, 1998, at prices equivalent to the sale prices of goods of the same categories at the provincial towns, of the same specifications, the same quality, giving priority to region III and region II with many difficulties. For provinces only with mountainous communes (without any mountainous districts), the price and/or freight subsidies shall apply only to iodized salt and plant varieties; freight subsidy to kerosene for lighting, writing paper for school children, curative medicines; freight subsidy for the transport from the commune clusters' centers to the province's capital for the purchase of a number of products manufactured in such communes (according to the list specified by the Prime Minister). 2. For commodities eligible for price and/or freight subsidies for sale, the distance prescribed for freight subsidy and the principle for determining the retail prices and unit prices for price and/or freight subsidies shall comply with regulations in Articles 12, 14 and 16 of Decree No. 20/1998/ND-CP of March 31, 1998 of the Government and the Government Pricing Committee's Circular guiding the implementation of Decree No. 20/1998/ND-CP. 3. For commodities eligible for freight subsidy for the purchase of products turned out by people in mountainous regions, islands and/or ethnic minority areas: The provincial People's Committees shall direct concerned Services, Boards and branches to select, based on the principles defined in Clause 1, Article 24, Decree No. 20/1998/ND-CP of March 31, 1998 of the Government, products and send their lists to the Commission on Ethnic Minorities and Mountainous Areas and the Ministry of Trade for sum-up. The Commission on Ethnic Minorities and Mountainous Areas shall assume the prime responsibility and coordinate with the Ministry of Trade, the Ministry of Agriculture and Rural Development and concerned ministries and branches in summing up the reports of the provincial People's Committees and submit them to the Prime Minister for deciding the list of products eligible for freight subsidy in each period. 4. Goods supply norms for calculation of price and freight subsidy funds: 4.1. Iodized salt: 5 kg/person/year 4.2. Kerosene: 3 liters/person/year 4.3. Pupils' writing paper (or notebooks): 1.5 kg/pupil/year (about 12 quires of horizontally lined paper or the corresponding number of notebooks). 4.4. Curative medicines: valued at 10,000 VND/person/year, according to specific lists prescribed by the Ministry of Health. 4.5. Fertilizers: 100 kg/hectare of arable land/year, including microbiological fertilizer produced by localities. 4.6. Insecticides: 0.12 kg/ha of arable land/year, according to the list prescribed by the Ministry of Agriculture and Rural Development. 4.7. Plant varieties: being new varieties of high yield, good quality, suited to the soil and climatic conditions, being used in areas planned for concentrated development of cash crops; (priority given to region III), including food plant varieties, industrial plant varieties (short or long-term), fruit tree varieties, medicinal herb varieties. The price and/or freight subsidy levels for these commodities shall be calculated in rice equivalent according to the following elements: - Areas under new varieties represents 5% of the area under rice. - Variety norm for 1 hectare: calculated according to rice = 160 kg/ha. - Price and/or freight subsidy for 1 kg: according to the guidance of the Government Pricing Committee. The province's plant variety fund = (rice acreage x 5%) x (160 kg/ha x subsidized price unit and subsidized freight unit). The provincial People's Committees shall annually base themselves on their respective localities' cultivation plant plans, allocated funds and the guidances of the Government Pricing Committee to decide the quantity of each plant variety and notify them to the Ministry of Agriculture and Rural Development when organizing the implementation. 4.8. Coal (including coal exploited from mines under the locality's management): Annually basing itself on the budget capability and proposal of each locality, the Commission on Ethnic Minorities and Mountainous Areas shall consult the concerned ministries and branches before allocating quantities and funds for localities. The presidents of the provincial People's Committees shall base themselves on the quantity and fund to decide specific use objectives (giving priority to the production of construction materials, agricultural and forest products processing, substitute for fuel used daily by people...). 4.9. Book distribution: including - Books on social and political affairs, law, general economics. - Books on scientific and technical popularization and knowledge improvement. - Assorted books on traditional literatures of various nationalities of Vietnam. - Children's books (including books supplied free of charge by the State). - Books published in ethnic minority languages. - Assorted cultural products in service of the spiritual life of the people in mountainous regions, islands and areas inhabited by ethnic minority people, including banners, flags, slogans, leaders' portraits, folk paintings and calendars of popular types. Annually, the Ministry of Culture and Information shall consult the Commission on Ethnic Minorities and Mountainous Areas and the Ministry of Finance to determine the quantities of the above-mentioned publications according to the requirements of each locality and the State budget capability. 4.10. For each period, the Commission on Ethnic Minorities and Mountainous Areas, based on the people's consumption demand, the budget capability and production demand for the application of technical advances, shall consult the concerned ministries and branches before adjusting the supply norms compatible to practical situation. 5. To draw up the plan, allocate quotas and readjust fund-regulating structure. 5.1. Planning and quotas allocation. a/ Grounds to draw up plan for price and/or freight subsidies: - The supply norm prescribed in Item III.4 of this Circular. - The number of people living and working in the areas defined in Item I.1 of this Circular according to the preceeding year's data announced by the General Department of Statistics (or provincial Department of Statistics) and the actual average population growth rate of the province to make calculation for the plan year. - The arable land area, including land cultivated with rice, subsidiary food crops, short- and/or long-term industrial plants according to the prceeding year's data announced by the General/municipal Department of Statistics (or the provincial Department of Statistics) to make calculation for the plan year. - Freight subsidies for the transport and sale of products turned out by people in mountainous regions, islands and ethnic minority areas shall be based on the list of products decided by Prime Minister, the freight subsidy level and transport distance from the centers of commune clusters to the nearest delta provincial capital or town according to the regulations in the Government Pricing Committee's Circular guiding the implementation of Decree No. 20/1998/ND-CP. b/ To draw up plans. - Based on the elements defined in Point a, Item 5.1 above, the provincial People's Committees shall annually direct concerned branches to draw up price and/or freight subsidy plans to be submitted to the Commission on Ethnic Minorities and Mountainous Areas, the Ministry of Planning and Investment, the Ministry of Finance and the Ministry of Trade before August 1st. - Based on the plans of provinces, the Commission on Ethnic Minorities and Mountainous Areas shall assume the prime responsibility and coordinate with the Ministry of Trade and other ministries in determining the quantity of each goods item for each locality, serving as the basis for determining the price and/or freight subsidy fund and send it to the Ministry of Planning and Investment and the Ministry of Finance for sum-up and report to the Government which shall further submit to the National Assembly Standing Committee. - Based on the State budget estimate reserved by the Government for price and/or freight subsidies, the determined quantities of commodities and the subsidized price/freight units prescribed by the Government Pricing Committee, the Commission on Ethnic Minorities and Mountainous Areas shall consult the Ministry of Finance and concerned ministries and branches before allocating price and/or freight subsidy fund for each goods item and each province (with priority being given first to localities confronting numerous difficulties). - The Ministry of Planning and Investment shall inform the localities and ministries (if any) of the quotas on quantity and the price/freight subsidy funds before December 31. The Ministry of Finance shall allocate funds in the form of "authorized fund" according to the implementation timetable. 5.2. Fund allocation: a/ For iodized salt: To be included into the national program against iodide deficiency-related disorders, the Ministry of Health shall assume the prime responsibility and coordinate with the Ministry of Finance and concerned ministries in allocating fund and quantity for each province. The iodized salt price/freight subsidy fund shall be assigned to the national program against iodide deficiency-related disorders and implemented as follows: - For the quantity of iodized salt produced by localities for their own consumption, the price subsidy (payment for the mixture of salt with iodide, plastic bags) and freight subsidy for the transport of common salt from the purchase location (as prescribed by the Ministry of Trade and the Government Pricing Committee) to the iodized salt plants and of iodized salt from the production place to commune clusters shall be allocated directly to the provincial People's Committees in the form of authorized fund. - For the quantity of iodized salt provided by centrally-run enterprises to localities for sale to people therein, the freight subsidy fund for the transport from the district centers to the commune clusters' centers shall be allocated directly to the provincial People's Committees in the form of authorized fund; the fund for mixing