Ministry of Finance. Ha Noi, December 2013

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1 Ministry of Finance Ha Noi, December 2013

2 Legal framework Law on State Budget and guiding documents Decision 158/2008/QD-TTgdated December 2 nd 2008 approving the National Target Program on Response to Climate Change Decision 130/2007/QD-TTgdated August 2 nd 2007 of the Prime Minister on some finance mechanisms and policies for Clean Development Mechanism projects. Decree N0.118/2008/ND-CP regulating the functions, tasks, rights and organisation of the Ministry of Finance. Joint Circular No. 07/2010/TTLT-BTNMT-BTC-BKHDT guiding the management and use of state budget for the National Budget Program on Response to Climate Change

3 STATE BUDGET FOR CLIMATE CHANGE RESPONSE INCLUDE: 1. Development investment - Investment in socio-economic infrastructure; - Invest and assist enterprises and organizations. - Allocate funding for the implementation of the National Target Program on Response to Climate Change (investment funding) 2. Regular funding: - For operations of agencies and the apparatus on climate change at the central and local levels; - For the implementation of the National Target Program on Response to Climate Change (regular funding).

4 Funding for the operation of agencies at the central and local levels - Ministries and agencies with climate change related tasks (Ministry of Natural Resources and Environment, Ministry of Science and Technology, Ministry of Agriculture and Rural Development, Ministry of Education and training, Ministry of Planning and Investment, Ministry of Information and Communication, Ministry of Public Security, Ministry of Defense, Ministry of Transport, Ministry of Industry and Trade, Ministry of Health, Ministry of Construction, Ministry of Labor, Invalids and Social Affairs, Ministry of Culture, Ministry of Sports and Tourism). - Local Departments and Agencies (Natural Resources and Environment, Agriculture and Rural Development, education and training, Culture, Sports and Tourism, etc. ) - Ensure sufficient fund for the operation of the National Steering Committee on Response to Climate Change, the Program Management Board, and the Program Office.

5 Funding for the National Target Program on Response to Climate Change In Decision no. 158/2008/QĐ-TTg, the Prime Minister approved 7 groups of activities with 26 tasks and projects including: - Assessment of the level of Climate change - Development and implementation of science and technology program on climate change - Capacity building - Awareness enhancing and staff training - Develop and implement action plans responding to climate change. - Develop the framework for integrating climate change aspects into the formulation and implementation of socio-economic development projects. - Strengthen international cooperation

6 Funding for the National Target Program on Response to Climate Change Total investment: 1,965 billion VND, including: - Foreign investment: 50% - Domestic investment 50% (30% from the State Budget; 10% from the local budget; 10% from other sources)

7 State budget allocation On the basis of the allocated funding for climate change response, the relevant Ministries and agencies at local levels are responsible for disseminating and funneling the allocated funds to the designated users in line with the master budget plan both in terms of total amount, areas of spending, and informing the counterpart agencies (Ministry of Finance and Department of Finance). Ministry of Finance/ Department of Finance are responsible for inspecting and identifying cases where funding is not allocated in line with the budget plan, policies and funding limits so that timely adjustments can be made.

8 State Budget Planning Adjustment Within the allocated state budget, the designated agency can make adjustments to the specific allocation to subsequent bodies in terms of the amount and the areas of disbursement.

9 Implementing the State Budget Plan In line with the State Budget Plan and the assigned tasks, head of the designated agency is responsible for sending the expenditure order to the State Treasury. The State Treasury shall examine the legitimacy of the The State Treasury shall examine the legitimacy of the required documents and make direct payments after all the required conditions have been met (according to the standards, limits and provided in the allocated budget plan, and the expenditure order made by the competent authority).

10 State Budget Expense Accounting In accordance with the guidance by the Minister of Finance, heads of budget-spending agencies are required to complete and submit the accounting statements of budget expenses to the relevant higher authorities. The accounting figures must be verified by the State Treasury where transactions took place.

11 State Budget Expense Accounting The Ministry of Finance audits the state budget expense statement on climate change, included in the comprehensive expense statement of the Ministry of Natural Resources and Environment and local budget accounting statements. Departments of Finance audit local state budget expense statement on climate change, compile information and submit local budget accounting statements to the relevant People s Committee for consideration prior to approval by the People s Council.

12 Evaluation of Budget Spending Efforts 1. Viet Nam gives priority to allocating resources for combating climate change (allocate state funding for climate change response activities, join international conventions on climate change, develop and implement national action programs) 2. Management of climate change spending has met predetermined requirements and made effective use of existing resources. 3. Besides state funding allocated to this activity, the State also has other incentives to reinforce efforts to combat climate change and protect the environment

13 Incentives for efforts to combat climate change 1. Tax incentives 10% commercial income tax rate for 15 years, applied to such businesses as: - Business revenue derives from the privatization of environmental works - Business revenue derives from implementation of new environmental protection projects. - Tax exemption applied to revenue from transfers of Certificate of Emission Reductions

14 Other incentives for efforts to combat climate change Tariffs: - Machinery, equipments, tools and vehicles used directly in the collection, storage, transportation, recycling and treatment of wastes, environmental monitoring and analysis environment, and renewable energy production are exempted from tariffs. - Clean Development Mechanism projects receive tariff exemption for goods imported to create fixed assets or raw materials and semi-finished products that cannot be produced domestically.

15 Other incentives for efforts against climate change 2. Support from the Environment Protection Fund -Assistance for dissemination and awareness building activities related to climate change and CDM -Assistance for assessment and approval of CDM project materials, manage and monitor the implementation of CDM projects. - Assistance for developing CDM project design documents -Price subsidies from the Environment Protection Fund for CDM products, including: + electricity produced from windpower, solar energy, thermal and tidal power + electricity produced from methane captured from waste-dump sites and coal mines.

16 Proposals 1. Rationale -Viet Nam is one of the countries hardest hit by climate change -Viet Nam has limited resources and skills for management and operation.

17 Proposals 2. Recommendations - Financial Assistance - Financial management skills - Experience sharing and exchanges on the implementation practices.

18 Proposals 3. Forms of Implementation - Assistance and sponsorship. -Technical assistance, focusing on completing the institutions for climate change financial management and policies to facilitate climate change response efforts. -Training

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