Decentralization of state budget management in Quang Ninh province

Kinh tế - Quản lý NGHIÊN CỨU TRAO ĐỔI
57Tạp chí 
Kinh doanh và Công nghệ
No 05E/2019
According to Vietnam’s Law on 
State Budget (2005), State budget means 
all the expenditures and revenues that 
are estimated and realized over a certain 
period of time decided by competent 
authorities in order to perform the 
functions and tasks of the State.
Local state budgets means state 
budget revenues that a local government 
may use, additional funding from 
central government budget to the local 
government budget, and state budget 
expenditures within the liabilities of 
the local government. Decentralization 
of budget management means the 
determination of scope, responsibility, 
and entitlements of various levels of 
authorities and budget estimate units to 
state budget management that suit socio-
economic management decentralization.
The nature of local government budget 
is the relationship of economic benefits 
between local governments and central 
governments, between local governments 
and other entities such as organizations, 
businesses, households and individuals 
inside and outside the country and local 
governments at all levels in the process of 
creating, distributing and using the local 
state budget. The decentralization of state 
budget management is essentially solving 
the relationship between central and local 
governments in three areas: 
- Determining the authority of 
governments at all levels to promulgate 
revenue and expenditure policies and 
regimes; State budget expenditure norms. 
In Vietnam, local governments (People’s 
Councils of provinces and cities) are 
entitled to decide on a number of regimes of 
fees collections, charges and contributions 
from the people in accordance with the 
law and are entitled to specific decisions 
regarding allocation norms and regimes 
and spending norms applied to localities 
based on the guiding framework.
- Harmoniously maintaining the 
relationship about the decentralization 
of revenue sources and spending tasks. 
The essence of this content is to divide 
revenues and spending tasks for each 
level of budget, between the central 
budget and local state budget, between 
levels of local state budget. This is 
DECENTRALIZATION OF STATE BUDGET MANAGEMENT
IN QUANG NINH PROVINCE
Nguyen Thi Trang Dinh, MA *
Abstract: Vietnam’s State Budget Law (2015) stipulates budget decentralization, 
responsibilities and obligations of local governments on revenue - expenditure and 
local state budget management. By presenting the results of local budget revenue and 
expenditure in Quang Ninh province in the fiscal year 2018-2019, this article draws 
both the positive outcomes and limitations in the state budget management in the area 
and recommends some solutions to better manage the state budget.
Keywords: Budget, state budget, central budget, local budget, budget management, 
state management, revenue and expenditure.
* Lecturer of the Faculty of Finance,
 Hanoi University of Business and Technology
NGHIÊN CỨU TRAO ĐỔI Kinh tế - Quản lý
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No 05E/2019
the central content of the state budget 
management decentralization and it is a 
difficult and complicated problem. Two 
issues arise when designing the revenue 
sharing system: the scope of the shared 
revenue and the sharing rates. In different 
countries, the range and rate of division are 
also different but they all have one thing 
in common, that is the decentralization 
of revenue sources and spending tasks 
must ensure that the central budget plays 
a leading role to carry out strategic and 
important spending tasks of the country. 
At the same time, local state budget is 
decentralized revenue to ensure proactive 
implementation of assigned tasks.
- Resolving the relationship of duties 
and entitlements of agencies and authorities 
at all levels in the state budget cycle. The 
budget cycle, also known as the budget 
process, refers to the entire operation of a 
budget from the beginning of its creation 
until the end of the transition to the new 
budget. The budget cycle includes such 
phases as budget preparation, budgeting, 
approval, allocation, delivery, compliance, 
settlement, inspection, examination and 
budget settlement (collectively referred 
to as budget preparation, approval and 
settlement). The level of involvement 
and control by the authorities, the State 
administrative agencies, and specialized 
agencies at all levels of budget is the nature 
of decentralization in the whole system.
The review of the state management 
decentralization in Quang Ninh shows that 
the current decentralization mechanism has 
the following achievements and limitations:
Achievements: 
Firstly, economic activities of Quang 
Ninh are maintained and developed stably 
with suitable GDP growth. The revenue 
of the following year is higher than the 
previous year, meeting the needs of socio-
economic development of the province. The 
local economy has increasingly integrated 
into the world economy. The province has 
carried out its economic restructuring in a 
positive direction, focusing more on the 
development of service industry. Many 
social issues have initially been resolved, 
which is reflected through the increasing 
employment; the decline in unemployment 
rate in urban areas and the rises in income 
per capita. In addition, the poverty rate 
has been continuously decreasing over the 
years. The gap between the rich and the 
poor in the province has been narrowed 
compared to that of other provinces and 
cities in the country.
Secondly, the issuance of documents 
on local budget revenues and expenditures 
and state management with regard to local 
government revenues and expenditures 
has specified the central regulations, 
meeting the orientations and plans in local 
state budget management. This provides 
favorable conditions for management 
agencies as well as creates the ground for 
implementing tasks. 
Thirdly, the management and 
administration of local state budget 
revenues and expenditures have basically 
been implemented in accordance with the 
provisions of the State Budget Law, the 
Tax Administration Law, the Investment 
Law and the guiding documents of the 
Central as well as local governments, 
exploiting revenue sources, meeting local 
demands and sate budget spending tasks.
Fourthly, the accountability of the 
heads of state agencies has been improved, 
which is reflected in the dialogues between 
the provincial leaders, the cities, the 
districts and the provincial governments 
with enterprises and the public. The 
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dialogues are quite diverse from direct 
dialogues, online dialogues, to question-
and-answer programs in which people 
raise their questions and representatives 
of departments provide answers to the 
questions. This shows that departments and 
agencies of the province have been focusing 
on accountability, helping to improve the 
efficiency of state management.
Finally, the inspection and 
examination of state budget expenditure in 
Quang Ninh has reported a decline in the 
problems of budget losses and increased 
revenue for the budget, improved budget 
allocation, and stricter fiscal disciplines. 
Limitations:
Firstly, a number of documents 
regulating expenditure norms have not 
been close to reality and are slowly being 
revised; the expenses for conferences 
and work travel allowances are no longer 
suitable to reality, making it difficult for 
implementation.
Secondly, there have been shortcomings 
in the work of making, allocating and 
appraising estimates, final settlement of 
local budget revenues and expenditures. 
(i) The work of making revenue 
estimates is carried out just as a step in 
the procedure; the subordinate level is 
still much dependent on the superiors. 
The practice of making revenue estimates 
of commune levels is still dependent on 
the examination of the district levels; the 
district level depends on examinations of 
the provincial levels, and the province 
level depends on those of the central. 
Revenue estimates for some years are 
not yet close to the actual business and 
production situations. 
As a result, the revenue increased much 
compared to the balance in some years, but 
there was a large loss in some other years. 
The reality shows that the lower-level 
budget when making estimates are usually 
low-budgeted but high spending estimates 
to receive a balanced supplement from the 
upper-level budget.
In contrast, the budget estimates 
allocated by the higher levels are sometimes 
beyond the capacity of lower level, so 
maintaining the benefits of various levels of 
budget is a difficult problem. This also stems 
from inadequacies in the provisions on the 
integration of the budget system in Vietnam. 
(ii) Budget planning and estimation 
have still omitted many revenues.
(iii) Some districts are still in a 
situation in which budget allocation is 
delayed compared to the prescribed time, 
and does not ensure the effectiveness of 
state management.
(iv) There are still problems of 
allocating investment capital for works that 
is not within the local budget’s spending 
task, beyond the prescribed time.
(v) The verification and approval 
of budget estimates and final accounts 
of People’s Councils at all levels in the 
province are generally carried out as one 
of the procedural requirements, especially 
at the commune, ward and town levels. 
People’s Councils in most communes, 
wards and towns agree and approve 
according to the report of the People’s 
Committee of the same level.
(vi) Budget revenues have not been 
strictly managed. There are still some 
problems of prolonged tax arrears; the debt 
ratio on the budget exceeding the revenue 
collection target of the General Department 
of Taxation. Revenue losses are still 
quite common, especially in the areas of 
land use, resources, tourism, services, 
transportation, petroleum trading, private 
sectors and foreign direct investment. The 
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administrative procedure from the stage of 
registration for declaration of tax payment 
is still complicated.
(vii) The budget spending structure is 
unreasonable, which is reflected in the low 
investment spending for development, 
high recurrent expenditure and scattering 
investment capital.
(viii) Debts in basic construction are 
still large and have not been completely 
handled, which causes debts after 
December 31st every year. The province 
has not conducted guidelines for dealing 
with debts in basic construction; causes 
for such debts in construction projects 
have not been determined according to 
the provisions of Point a, Clause 2 of 
Directive 27 /CT- TTg dated October 
10th, 2012 of the Government. 
(ix) The inspection and supervision 
work has not been conducted regularly, 
and the quality of this inspection and 
supervision is not enhanced, especially 
at district, town and commune, ward 
and township levels. Each year, the tax 
industry just inspects only over 15% of 
the operating businesses.
(x) Although the publicity and 
transparency in state management of local 
state budget revenue and expenditure has 
much improved over the past years, this is 
still limited. For example, reports on the 
results of inspection, auditing, supervision 
and overall investment evaluation have 
not been fully and widely announced. 
Recommendations
In order to overcome the above 
shortcomings, the decentralization of budget 
management in Quang Ninh province in 
the coming time should be take following 
recommendations into consideration: 
Firstly, in terms of local state budget 
revenue and expenditure management, in 
the current context of global integration, 
it is necessary to focus on improving the 
direction of expanding local autonomy in 
spending decisions. It is advisable to start 
by giving local governments autonomy 
at an appropriate level, to decide on 
spending regimes and norms based on the 
principles of overall fiscal disciplines. In 
this process, there is a need to increase the 
transparency and financial accountability 
of local authorities.
Secondly, the province should 
complete the decentralization of investment 
spending for localities. The investment 
decentralization should be linked to 
clearly defining the right to manage and 
use assets acquired by investment of all 
levels (associated with accountability) 
in the direction of classifying assets at 
national, provincial, district, municipal, and 
commune levels. It should be noted that the 
reform of the budget decentralization must 
ensure that rights must go with obligations, 
benefits and resources, ensuring that the 
spending tasks are conducted in accordance 
with the responsibility to provide the 
assigned public services. .
Thirdly, the province should promote 
budget management according to 
outputs. Budgeting by performance is an 
important tool for improving spending 
priorities, efficiency and effectiveness 
of budget spending. With this method, 
the formulation and allocation of budget 
estimates must be closely linked between 
the level of budget estimates expected to 
be allocated and the target implementation, 
thereby achieving outputs. This type of 
management also requires changes in the 
legal and institutional framework, how to 
develop and operate the budget plan and 
management culture in a way that ensures 
accountability for performance. 
Kinh tế - Quản lý NGHIÊN CỨU TRAO ĐỔI
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PHÂN CẤP QUẢN LÝ NGÂN SÁCH NHÀ NƯỚC TẠI TỈNH QUẢNG NINH
NCS.ThS. Nguyễn Thị Trang Định *
* Khoa Tài chính,
 Trường ĐH KD&CN Hà Nội
Ngày nhận bài: 26/7/2019
Phân cấp quản lý ngân sách nhà nước 
hợp lý và đúng đắn không chỉ đảm bảo 
nguồn lực tài chính cho các cấp chính 
quyền từ trung ương đến địa phương duy 
trì và phát triển hoạt động mà còn là động 
lực khuyến khích mỗi cấp chính quyền 
địa phương tích cực và chủ động khai 
thác, phát huy các tiềm năng của mình 
để phát triển. Việc phân cấp quản lý, điều 
hành ngân sách các cấp chính quyền địa 
phương góp phần quan trọng phát triển 
kinh tế - xã hội, tăng cường nguồn lực 
tài chính, đảm bảo tính tập trung thống 
nhất của hệ thống NSNN, tính công khai 
minh bạch, dân chủ trong quản lý ngân 
sách, thực hành tiết kiệm, chống lãng 
phí, chống tham nhũng, phân công, phân 
quyền gắn với trách nhiệm.
Trong những năm qua, sau khi được 
Trung ương phân cấp và điều tiết, việc 
phân cấp quản lý Ngân sách địa phương 
trên địa bàn tỉnh Quảng Ninh đã bám sát 
Luật Ngân sách nhà nước, đặc điểm và 
điều kiện phát triển kinh tế - xã hội của 
địa phương, thu được những kết quả đáng 
ghi nhận. Tỉnh đã có những phương án 
điều hành thu, chi ngân sách quyết liệt, tập 
trung phân cấp nguồn thu, tỷ lệ điều tiết 
các khoản thu giữa ngân sách các cấp chính 
quyền địa phương; đặc biệt, tăng cường 
phân cấp nguồn thu cho các địa phương 
để tạo thế chủ động trong công tác quản 
lý, điều hành ngân sách, tăng khả năng tự 
cân đối, đảm bảo mục tiêu phát triển kinh 
tế - xã hội của các địa phương, phấn đấu 
giảm dần số bổ sung từ ngân sách cấp tỉnh. 
Tuy nhiên đánh giá một cách khách quan, 
toàn diện thì thực trạng phân cấp quản lý 
NSNN tại tỉnh Quảng Ninh trong thời gian 
vừa qua vẫn còn không ít tồn tại, hạn chế 
cần tìm ra những giải pháp đúng đắn, hiệu 
quả để hoàn thiện phân cấp quản lý ngân 
sách tỉnh.
Từ khóa: Luật Ngân sách nhà nước, 
ngân sách nhà nước, phân cấp quản lý 
ngân sách nhà nước Quảng Ninh.