Vietnam Proposes Merging Budget and Public Investment Laws, With Tighter Controls on Spending

One framework for public money, with new checks on results

Vietnam's proposed merger of its State Budget Law and Public Investment Law would bring investment planning, budget allocation and spending oversight into a single framework, while tightening rules on unused funds and requiring projects to be assessed from preparation through operation.

Finance Minister Ngo Van Tuan presented the proposal to the National Assembly Standing Committee on the morning of October 12, 2026, during its seventh session. The Government wants the bill added to the 2026 legislative program for consideration and passage at the National Assembly's second session. Vice Chairwoman Nguyen Thi Hong, who chaired the discussion, asked the Government to complete the draft while clarifying responsibilities and preserving financial controls.

The version presented in October contains 10 chapters and 103 articles, reportedly 79 fewer than the two existing laws combined. That implies a reduction from 182 articles, or about 43%. A September 15 government publication, however, describes a draft with 10 chapters and 102 articles. The accounts do not explain the difference.

The proposal reaches beyond reducing the number of legal provisions. It would merge annual investment plans into budget estimates, allow faster use of revenue collected above estimates, shift some decisions to provincial executive authorities and restrict the funds that can be carried into another year.

Lawmakers broadly support consolidation, but their review identifies a central tension: giving authorities more room to act without weakening project preparation, allowing money to remain unallocated or permitting spending adjustments beyond their legal powers.

Why two recent laws are being combined

The Government's draft law explanation, published on September 15, sets out the overlap. State Budget Law No. 89/2025/QH15 was passed on June 25, 2025, and took effect from the 2026 budget year. Public Investment Law No. 58/2024/QH15 took effect on January 1, 2025, and was amended by Law No. 90/2025/QH15 on June 25, 2025.

The State Budget Law governs preparation, allocation, execution, audit, final accounting, disclosure and supervision of the budget, including public investment expenditure. The Public Investment Law governs the investment process, from proposing and approving projects to assigning capital, carrying out construction or other work, handing over completed projects and settling project accounts.

A single investment funded by the state budget therefore passes through both systems. The Ministry of Finance identifies overlapping authority, paperwork, procedures, deadlines and responsibilities, including in budget allocation, capital planning, payment and supervision.

The draft retains the basic structure of the State Budget Law. Public investment provisions would be integrated into the relevant chapters and articles, with a separate chapter for rules specific to investment programs, tasks and projects. The ministry says provisions that remain effective would be retained rather than discarded simply because the laws are being combined.

Consolidation also follows the merger of the Ministry of Finance and the Ministry of Planning and Investment. During an August 19 parliamentary discussion, Prime Minister Le Minh Hung said recent amendments had addressed strategic policy directions and difficulties arising from the model of provincial and commune administration, but overlaps persisted.

How the proposal reached the October review

The merger has moved from parliamentary discussion of its direction to a ministry draft and then preliminary legislative scrutiny. The sequence distinguishes support for the idea from approval of a final law:

• January 1, 2025: Public Investment Law No. 58/2024/QH15 took effect.
• June 25, 2025: The National Assembly passed State Budget Law No. 89/2025/QH15 and amended the Public Investment Law through Law No. 90/2025/QH15.
• Budget year 2026: The new State Budget Law took effect.
• August 19: Deputies supported consolidation during the 16th National Assembly's first extraordinary session.
• September 15, 2026: The Government published an explanation of the Ministry of Finance draft, describing 102 articles and a public consultation.
• October 12, 2026: The Standing Committee reviewed a version described as having 103 articles.

The Ministry of Finance's September announcement said the draft was open for comments on its online portal. It did not give a consultation closing date. The next legislative target is the National Assembly's second session, but the discussion does not establish that passage is assured.

Investment plans would become part of the budget

The main structural change is to integrate the five year public investment plan into the five year financial plan. Lists of investment programs, tasks and projects, together with their spending levels, would become part of the broader assessment of available financial resources and fiscal risks.

Annual public investment plans would likewise become annual public investment expenditure estimates. Instead of maintaining parallel planning tracks for investment capital and the budget, authorities would use a common process for preparation, allocation, execution, final accounting, disclosure and supervision.

The Ministry of Finance describes the five year financial plan as adjustable, rather than fixed regardless of changing conditions. It could be revised to reflect economic developments, resource balances or implementation needs, while public investment would retain specific adjustment rules.

One proposed mechanism would let the ministry report to the Prime Minister on changing investment lists and spending levels when projects are not ready to proceed or cannot disburse their annual allocations. Projects that have completed the necessary procedures and can use funding could be added. This is intended to prevent capital from being held by projects unable to spend it.

National Assembly President Tran Thanh Man called in August for annual budgets to be linked more closely to financial and investment planning. He argued for allocation based on key performance indicators, or KPIs, and actual outputs rather than input documentation alone.

Explaining his position on the planning framework, Man said:

It is necessary to complete the medium-term expenditure framework by linking the five-year financial plan and the medium-term public investment plan with annual budget estimates, in order to limit fragmented and impractical budget planning,

Simpler approvals, but project preparation stays

The draft would give the Government responsibility for detailed criteria classifying projects into Groups A, B and C, as well as procedures and documents for approving or adjusting investment policy and making investment decisions. These classifications determine the approval process applicable to a project.

Procedures would be simplified according to project scale. Nguyen Huu Toan, deputy chairman of the National Assembly's Economic and Financial Committee, said its standing body broadly agreed with many revisions, while warning against removing necessary preparation steps for Group C projects.

The reviewing committee also proposed studying whether investment policy approval and the investment decision could be shortened and integrated. The first establishes whether a project should proceed in principle; the second approves the investment itself. Combining procedures would need to preserve the checks each currently serves.

Hong supported clearer rules for Group C projects, but said the law should expressly set out criteria and procedures for national target programs and nationally important projects that fall under National Assembly authority. The proposed delegation of detailed rules to the Government would therefore not remove Parliament's role in those decisions.

Local autonomy must come with resources

The draft would transfer authority to carry forward public investment spending financed by the central budget from provincial People's Councils to provincial People's Committees. Councils are the representative bodies at provincial level; committees are the executive authorities responsible for administration.

That shift is paired with new principles for assigning revenue and expenditure responsibilities between provincial and commune budgets, in line with the Central Committee's Conclusion No. 76. The September explanation calls for stable revenue sharing arrangements that give communes resources to perform their assigned duties, with adjustment mechanisms when conditions change.

Hong said responsibilities passed to communes must be matched by resources, while preserving the provincial budget's role in balancing and supporting local finances. The reviewing committee also requested a careful check of commune powers to avoid duplicated or missing responsibilities.

The September draft explanation adds separate provisions for temporary shortages in commune budget funds and proposes repayment of relevant advances within 12 months. These details show that local autonomy is being addressed through both spending authority and rules for managing cash when receipts and payments do not coincide.

Projects would be judged beyond disbursement

Public investment programs, tasks and projects would have to undergo effectiveness assessments throughout preparation, appraisal, approval, implementation and operation after completion. The Government would guide the process, while ministries and other responsible bodies would develop criteria for their sectors and assess the investments they manage.

The Ministry of Finance identifies several assessment grounds: economic and social development, national defense and security, infrastructure capacity, improvements in living conditions and social welfare. The approach recognizes that a project may serve a public purpose that cannot be measured solely by financial returns.

Prime Minister Hung made a similar distinction during the August discussion, pointing to projects connected with defense, security, ethnic affairs and religious matters. The policy objective is to assess substantive results rather than rely only on how much money has been spent.

Hong asked for assessment findings to be tied to investment decisions, allocation and capital adjustments. The draft also clarifies the basis for preliminary estimates of total investment, making project cost assessment part of preparation rather than leaving it entirely to later approval stages.

Priority would go to development investment, strategic sectors, ethnic policies and areas with especially difficult economic and social conditions. The draft explanation also assigns project owners responsibilities for objectives, schedules, quality, budget use, disbursement and reporting, alongside duties for project management bodies, consultants and appraisal organizations.

More room for emergencies, less room for idle funds

The proposal would broaden the use of budget reserves, financial reserve funds, additional revenue and remaining expenditure estimates to respond to emergencies affecting national interests and economic stability. It would also permit revenue collected above estimates approved by the National Assembly or People's Councils to be used during budget execution.

State budget borrowing would be managed within the common state budget fund for development investment, subject to legal borrowing principles. Bringing borrowed resources into that fund is a proposed management change, not a stated exemption from debt controls.

The increased flexibility is accompanied by restrictions on carryovers, meaning appropriations transferred from one budget year to the next. The September explanation proposes narrowing eligible categories, including public investment and social welfare spending, and generally requiring carried funds to be spent by December 31 of the following year.

Exceptions would apply to funding for salaries, allowances, benefits and payments calculated by reference to salaries. The explanation also proposes a December 31 cutoff for spending and advances, with rules for handling unused estimates and outstanding advances at year end.

The reviewing committee wants tighter provisions for estimates not yet allocated in detail, allocation deadlines and carryovers. Its concern is that flexible resource management should not leave funds outside effective scrutiny or allow delayed allocations to become routine.

Spending categories, deadlines and legal boundaries

The draft defines development investment expenditure as including public investment and other development investment. The October presentation says it removes three cases in which the same budget task could receive funding from both recurrent and investment expenditure. Recurrent expenditure generally pays for ongoing operations, while investment expenditure finances development assets and projects.

Man had urged lawmakers to remove rigid barriers between those categories, including restrictions affecting minor repairs, public asset upgrades and preparation of investment projects. The proposal therefore seeks both clearer classification and workable funding routes, rather than simply treating all expenditure alike.

The Government would have nationwide authority to issue budget spending regimes, standards and norms. Ministries and central agencies would retain responsibility for sectoral technical and economic standards, but rules affecting budget expenditure would require Ministry of Finance agreement on funding capacity before adoption.

The September explanation also proposes moving the Prime Minister's deadline for assigning budget estimates from November 20 to November 30. For final budget accounts, it would move the reporting deadline for top level budget units and provincial People's Committees from July 5 to July 10, and the Ministry of Finance's submission date from August 15 to August 20.

The scope provisions distinguish public investment capital from investment financed by lawful revenues of state agencies and public service units. The ministry says those revenues would be governed by Government rules and other relevant legislation. State capital invested in enterprises and budget funding for public private partnership projects would also remain subject to the relevant specialized laws.

National Assembly Vice President Nguyen Khac Dinh called for consistency with laws governing public debt, public private partnerships and construction. His position was that consolidation should create a workable governance framework, rather than merely put two laws into one document.

Technology funding and the decisions still needed

The Ministry of Science and Technology would propose five year public investment priorities and spending levels for science, technology, innovation and digital transformation. Its responsibilities would also include proposals involving central budget estimates not yet allocated in detail, reserves, additional revenue and remaining appropriations.

The September explanation links these responsibilities and the use of digital technology in budget management to Resolution No. 57/NQ-TW. The proposal also provides for a national information system and database on the state budget.

Hong requested clearer boundaries for coordinating and combining funding sources, specifically warning against mechanisms that allow capital adjustments beyond authorized powers in science, technology, innovation and digital transformation. She also called for a consistent lead body to guide and consolidate budget proposals.

Those issues remain part of the drafting work before submission to the National Assembly. The final article count, detailed Government procedures, sector assessment criteria and safeguards for reallocating capital have not been settled in the accounts of the review. No numerical estimate of administrative savings or improvement in disbursement was given.

The immediate task is to turn broad agreement on consolidation into precise rules: who may allocate or move money, when funds must be assigned and spent, and how project results affect the next funding decision.

Key Points

• The Government seeks consideration and passage of the consolidated law at the National Assembly's second session.
• The October version has 10 chapters and 103 articles; the September government explanation describes 102 articles.
• Five year and annual public investment planning would be integrated into financial plans and budget estimates.
• Project assessments would cover preparation, implementation and operation, including social and security benefits.
• Local authorities would gain flexibility, with resources expected to match assigned responsibilities.
• Emergency funding options would expand, while carryover eligibility and spending periods would narrow.
• Lawmakers want stronger controls on delayed allocations, project preparation and unauthorized capital adjustments.