Circular No. 58-TC/HCSN dated July 24, 1995 of the Ministry of Finance giving provisional guidance on the procedure of collecting and paying social insurance
THE MINISTRY OF FINANCE
SOCIALIST REPUBLIC OF VIET NAM
Independence - Freedom - Happiness
Hanoi, July 24, 1995
GIVING PROVISIONAL GUIDANCE ON THE PROCEDURE OF COLLECTING AND PAYING SOCIAL INSURANCE
Pursuant to Decree No.12-CP of January 26, 1995 of the Government promulgating the Regulations on Social Insurance and Decree No.19-CP of February 16, 1995 of the Government on the establishment of the Vietnam Social Insurance, pending the issue by the Government of the regulations on the financial collection and expenditure of Vietnam Social Insurance, and proceeding from the opinion of the Vietnam Social Insurance in its Official dispatch No.115-BHXHVN of July 4, 1995;
The Ministry of Finance gives the following provisional guidance on the collection and payment of social insurance:
I.- PAYERS OF SOCIAL INSURANCE
The payers of social insurance are the employers of labor and the laborers (including the laborers who are sent on tours in the country and abroad for study, probation, health rehabilitation or work, but who are still on the payroll of public offices and units) working in the following offices, units and organizations:
1. The State-owned enterprises.
2. The enterprises of the non-State economic sectors which employ 10 or more workers.
3. The foreign invested enterprises, export processing zones, industrial parks.
4. The enterprises and service organizations of the armed forces.
5. The trading and service organizations of the administrative and professional agencies, the Party and mass organizations.
6. The foreign agencies and organizations or international organizations based in Vietnam, except when otherwise stipulated by an international treaty which the Socialist Republic of Vietnam has signed or acceded to.
7. The professional units which rely on their revenues for expenditure, the professional units which benefit from foreign aid (including aid from non-governmental organizations) as a source of revenue to pay salaries to their workers and employees.
8. The State management agencies, the administrative and professional agencies, the Party and mass organizations, associations, and elected bodies from the central to district levels.
9. The agencies and units in the Ministry of Defense, the Ministry of the Interior, and the Cipher Committee of the Government.
II.- THE RATE OF PAYMENT AND THE SOURCE OF FUNDS FOR PAYING SOCIAL INSURANCE
1. The rate of payment for Social Insurance: The rate of payment for Social Insurance is 20% of the total monthly salary fund, of which:
- A public office, unit or a labor employer pays an amount equal to 15% of the total monthly salary fund of those taking part in the Social Insurance Fund.
- The laborers pay 5% of their monthly salary.
2. The monthly salary fund is the basis for fixing payment for Social Insurance.
a/ With regard to the administrative and professional sector, the Party and mass organizations, associations, elected bodies, and the armed forces:
The monthly salary fund as the basis for Social Insurance payment includes: The basic salary according to the scale of salaries, grades, ranks, titles, and allowances for title, geographical area, high cost of living and seniority, allowances for title in elected bodies, and the percentage of reserved disparity (if any) as stipulated by Resolution No.35-NQ/UBTVQHK9 of May 17, 1993 of the National Assembly Standing Committee, 9th Legislature; Decision No.69-QD/TW on May 17,1993 of the Party Secretariat; Decree No.25-CP of May 17, 1993 of the Government; Decision No.574-TTg of November 25, 1993 of the Prime Minister, and Decree No.05-CP of January 26, 1994 of the Government.
b/ The production and business sector:
With regard to the enterprises mentioned in Points 1, 2, 3, 4, and 5, Part I of this Circular, the total salary fund as the basis for Social Insurance payment is the total monthly salary fund of those covered by Social Insurance, including: The salary according to grades, titles, contracts, the percentage of reserved disparity, and allowances for title, geographical area, high cost of living (if any)... in accordance with Decree No.26-CP of May 23, 1993 and Decree No.05-CP of January 26, 1994 of the Government.
With regard to those enterprises which have already signed labor contracts, they must pay Social Insurance premiums on the basis of the total salary fund fixed in the signed contract.
c/ Concerning those units mentioned in Points 6 and 7, Part I of this Circular, the total salary fund as the basis for Social Insurance payment is the contract salary fund.
3. The source of payment and way of accounting:
a/ The public offices, units or labor employers must pay an amount of Social Insurance premiums equal to 15% of the salary fund:
- With regard to those units which receive their salaries from the State Budget, the Social Insurance payment is included in the draft quarterly and annual budget allocations, and accounted in Section 68 for Social Insurance payment according to the corresponding chapter, type, item, and grade.
- As for the production, trading and service units, the Social insurance payment is Included in production, trading and service expenditure, and accounted in Section "Social Insurance Deduction".
- Regarding the units which rely on their revenues for expenditure and those which receive foreign aid, Social Insurance payment is deducted from their sources of revenues and aid, and accounted in the management expenditure.
b/ 5% of the laborers' salary as payment for Social Insurance:
The public office, unit or labor employer shall deduct 5% from the monthly salary of each laborer to pay to the Social Insurance fund, and the public office, unit or labor employer themselves pay 15%.
III.- THE PROCEDURE OF PAYMENT
1. In principle, Social Insurance is collected by the Vietnam Social Insurance agency and the collected sum is registered in the Social Insurance booklet of each laborer. Pending the issue of social insurance booklets to each laborer, the Vietnam Social Insurance agency must certify the list of those who have paid social insurance premiums at each unit (with a list attached).
2. For the time being, the money collected as Social Insurance payment is remitted to Account number 942 as "Social Insurance Payment" opened at the system of State Treasuries under the name of the General Director of Vietnam Social Insurance. When the number of people buying social insurance from the non-State sector increases, the opening of "Social Insurance Payment" Accounts at the State Treasuries or at the Specialized Bank of the State Bank shall be decided by the General Director of Vietnam Social Insurance after consulting the Managing Board.
3. The procedure of payment:
a/ Every quarter, the labor employing agencies and units basing themselves on the salary fund plan shall register the rate of payment with the provincial and municipal Social Insurance Services and the Vietnam Social Insurance (concerning the armed forces, public offices and units under the management of the branches).
b/ Every month (the last day of the month at the latest), besides paying salaries, the labor employing unit shall deduct 20% of the total salary fund, including 15% of the total salary fund paid by the labor employer and 5% of the salaries of the laborers.
c/ At the end of each quarter, the labor employing agencies and units together with the Social Insurance Service shall compare the payroll and the salary fund, and certify a list of those who have paid social insurance premiums. If the number of those who have paid social insurance is less than the number who have to pay, the difference must be paid in the next quarter, and if the number of those who have paid social insurance is more than the number who have to pay, the difference shall be transferred to the next quarter, and both cases shall be accounted in the year.
d/ If the monthly Social Insurance payment is delayed, the payer must pay an interest rate equal to the interest rate of short-term bank savings for the amount of money delayed at the time of payment.
e/ Regarding those agencies, units and laborers that deliberately refuse to pay Social Insurance, the Social Insurance agencies in the system of Vietnam Social Insurance shall reserve the right to refuse to pay Social Insurance compensations, and at the same time, notify the legal agencies of these cases in writing.
IV.- IMPLEMENTATION PROVISIONS
1. This Circular takes effect as from July 1st, 1995. All stipulations made earlier on the collection and payment of Social Insurance which are contrary to the provisions of this Circular are now annulled.
2. The financial institution, the taxation office and the Vietnam General Confederation of Labor shall continue to collect Social Insurance premiums for 1994 and the first 6 months of 1995, and remit it to the account of the Central Bank as stipulated in Official Dispatch No.3478-TC/HCVX of December 27, 1994 of the Ministry of Finance.
3. The fees for the collection of Social Insurance shall, for the time being, be collected according to the current stipulations.
4. In the process of implementing this Circular, if there is any problem, the localities, public offices and units are requested to inform the Ministry of Finance and Vietnam Social Insurance for consideration and settlement.
FOR THE MINISTER OF FINANCE
Tao Huu Phung