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   Ministry of finance       SOCIALIST REPUBLIC Of VIETNAM
   Ministry of Labour,      Independence-freedom-Happiness.
Invalids and Social Affairs       htmlhtmlhtml
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      No. 19/TT-LB 
  
                                    Hanoi, 7th March 1994.

INTERMINISTERIAL CIRCULAR PROVIDING TEMPORARY GUIDANCE ON THE RAISING Of 15% SOCIAL INSURANCE fUND UNDER MANAGEMENT Of THE MINISTRY Of LABOUR, INVALIDS AND SOCIAL AfFAIRS

I. Collecting social insurance arrears from organizations and units of State sector

The social insurance in 1993 in many places was paid not fully and properly, so there is a necessity to collect all the arrears as set out below:

1. In respect of production / commercial sector:

As to period from January 1. 1993 to March 31, 1993: 8% of payroll fund must be allocated to social insurance fund in accordance with Decree 202/HDBT dated December 28, 1988 of Council of Ministers (presently Government) and interministerial implementing regulatory documents issued by MoLISA and Mof.

As to period from April 1. 1993 to December 31, 1993: 8% of newly established payroll fund, which includes salary (applicable to relevant occupations and levels) and area and position (if any) allowance, must be allocated to social insurance in accordance with Government Decree No. 26/CP dated May 23, 1993 and ministerial implementing regulatory documents issued by MoLISA and Mof. As regards to enterprises having signed labour contracts, the payroll fund determined to be subject to social insurance payme nt shall be understood to be such payroll fund which is calculated based on all the labour contracts signed.

2. In respect of administrative sector:

Social insurance shall be 8% of payroll fund as determined by Decree 203/HDBT of Council of Ministers dated December 28, 1988 (presently Government) but such payment shall be applicable to period until the end of 1993.

The Obligatory contribution by the employees in State sectors of 5% of their salary of social insurance purposes shall be carried out in accordance with provisions of interministerial Circular 110/TT_LB dated December 31, 1993 of MoLISA and Mof.

II. Collecting social insurance contribution in 1994

1. Social insurance payers

Social insurance payers shall be both employers and employees (including also such employees attending any course or being on any business trip both inside and outside the country who remain on the payroll list of his/her organization/units) working in th e following :

- Non-business administrative units (including such administrative units cover their expenses by certain sources of income created by themselves or otherwise provide salary to their employees by financial aid from overseas, including from non-governmenta l organizations);

- Party organization, mass and social associations and unions;

- State enterprises (including those of Ministry of Defense and Ministry of Interior) ;

- Private enterprises recruiting 10 or more employees;

- joint venture enterprises, enterprises with foreign invested capital, export processing zones, special economic zones;

- foreign representative offices or other foreign organizations which are located in Vietnam.

2. Levels and sources of social insurance contribution

Total social insurance contribution to be made for pension and death allowance shall be 15% calculated on payroll fund, of which:

a) 10% shall be paid by employing organizations, units or private employers in the following manner:

- Contribution of State-budgeted organizations and units to social insurance fund shall be made from State budget and the sums paid shall be recorded in Item 68- Social Insurance Payment with specifications of relevant level, category of each contribut ion;

- Social insurance contribution of business / commercial units shall be recorded as part of product value or transaction expenses;

- Organizations and units which cover their expenses by certain sources of income created by themselves or which enjoy foreign aid shall make their social insurance contribution by making payment from such income or aid and the sums paid shall be recor ded as part of management fee.

b) 5% shall be paid by the employees themselves

Employing organizations , units or private employers shall make a 5% deduction from the monthly salary of each employee for social insurance purposes.

3. Social insurance deduction from payroll fund

a) In respect of business /commercial sector:

- State enterprises, private enterprises, equitised companies, limited liability companies... which still do not realize labour contract regime shall deduct for social insurance contribution purposes 15% from payroll fund and area, responsibility allowa nces (if any) in accordance with Prime Minister's Decree 26/CP dated May 23. 1993 and Government Decree 05/CP dated January 26, 1994;

- State enterprises, private enterprises, equitised companies, limited liability companies...which have already realized labour contract regime shall deduct for social insurance purposes contribution 15% from payroll fund which is to be calculated based on contracts signed.

b) In respect of administrative sector:

Administrative organizations, units, party organizations, professional unions mass associations shall make 15% social insurance contribution calculated on payroll fund which includes payroll fixed for relevant occupations and levels, all kinds of allowanc es (area, position, working stage, electoral posts (if any) and others) in accordance with Decree 05/CP dated January 26, 1994 of the Government, Decision 35/NQ-TW dated May 17, 1993 of National Assembly's Standing Committee and Decision 69/QD-TW dated Ma y 17, 1993 of Secretariat of the Communist Party of Vietnam, Decision 574/TTg dated November 25, 1993 of Prime Minister and ministerial Circular 25/TTLB dated November 13,1993 of MoLISA, Department of governmental organization and personnel of the govern ment and Mof.

c) Joint venture enterprises, enterprises with foreign invested capital, export processing zones, special economic zones, foreign representative offices and other foreign organizations located in Vietnam shall make 15% social insurance contribution calc ulated on contractual payroll fund.

III. Organizing the collecting of social insurance contribution

Collecting of social insurance contribution shall be carried out by provincial /municipal department of labour, invalid and social affairs through its contacts entered into with relevant organizations. The sums collected shall be paid to Account 94.2 - "S ocial Insurance" at State Treasury in the name of provincial/municipal department of finance. Department of finance and pricing is liable to submit to Ministry of finance monthly report summarizing the collecting of social insurance and to transfer social insurance contribution made from Account 94.2 - "Social Insurance" of department of finance and pricing to Account 94.2 - " Social Insurance" of department of labour, invalid and social affairs or to the same account of social insurance agency (in cases of provinces and cities where such an agency has been established). Moneys deposited in this account will be used for payment of pension and other social allowances.

- Enterprises (including joint ventures, enterprises with foreign invested capital and other business /commercial units of Ministry of Defense and Ministry of Interior) shall make social insurance contribution through a provincial/municipal taxation offi ce with which the department of labour, invalid and social affairs should sign contracts for such purposes;

- Administrative organizations, party organizations, mass associations shall make social insurance contributions through provincial / municipal department of finance and pricing with which the department of labour, invalid and social affairs should sign contracts for such purposes;

- Administrative organization, party organization, mass associations which are State-budgeted or based on self-accounting system or otherwise have payroll fund from foreign aid having head office at a locality shall pay the contribution directly to depar tment of labour, invalid and social affairs of the given locality for social insurance purposes;

- In such provinces and cities where social insurance office has been established this office shall instead of department of labour, invalid and social affairs sign contracts with State organizations for social insurance purposes and directly collects th e same from non-State organizations;

- Social insurance contribution of those serving in armed forces shall be carried out in accordance with specific provisions to be issued thereafter;

All contract-based contributions of social insurance shall be paid to social insurance fund before the 15th day of last month of each quarter and a list of payers sent to provincial/municipal department of labour, invalid and social affairs. (The form is attached.)

To support systemising and regularizing social insurance funding for implementation of social insurance policy set out in Government Decree 43/CP, the collecting of the social insurance fund must be carried out together with comprehensive consideration in respect of the receivers of social insurance. If an organization or unit has submitted a list of those who will to enjoy social insurance but still has not made any social insurance contribution then the head of such organization or unit shall have paid all the social insurance arrears as for period before January 1994 with obligation to pay penalty in the form of paying short-term interest fixed by the banks at the date of payment which is calculated on the total amount of remaining sum to be paid for s ocial insurance purposes.

IV. fee for the collecting of social insurance fund

The following organizations or units if directly participating in the collecting of social insurance fund, shall be entitled to a fee as stipulated below:

- offices of taxation services or services of labour, invalid and social affairs directly collecting the fund from enterprises are entitled to 0.5% (half a percent) of the actual amount to be paid to Account 94.2 - "Social Insurance";

- offices of finance services or services of labour, invalid and social affairs directly collecting the fund from non-business , administrative organizations and units (including self-accounting ones) are entitled to 0.25% ( a quarter of a percent) of t he actual amount to be paid. The use of this amount of fee shall be subject to specific provisions of law;

Deduction of social insurance by department of labour, invalid and social affairs or by social insurance agency from social insurance contribution collected shall be made within 10 days of the date of receiving social insurance contribution and such deduc tion shall be recorded in Item 75 - "Transaction fee" of the Index of State Budget with relevant level, category and class specified for such sum.

V. Implementing provision

This Circular shall come into force as from January 1, 1994 until issuance of new regulatory document to replace it .

All previous provisions on contribution to social insurance fund (including, in particular, provision of interministerial Circular 06/TT-LB dated March 24, 1989 of MoLISA, Mof and Vietnam General Administration of Trade Union) on deduction 2% from payroll fund for purposes of paying allowances for difficult living conditions) which are in contradiction to provisions hereof shall be repealed.

Provincial / municipal services of finance, pricing, labour, invalid and social affairs and social insurance shall regularly supervise the relevant organizations and units in making by them of social insurance contribution, impose relevant handling measur es to any breach and collect any arrears in social insurance as the case may be.

Any queries arising in process of implementation of this Circular are requested to be delivered to Ministry of Labour, Invalid and Social Affairs and Ministry of finance for additional guidance and amendment.

for the Ministry of Labour,        for the Ministry of finance
Invalids and Social Affairs
Vice Minister                      Vice Minister


NGUYEN THI HANG                    TAO HUU PHUNG
(Signed)                           (Signed)