15th September2022, Skopje – New fiscal rules and principles have been introduced, which will be applied in the State Budget preparation, adoption and execution procedure. Parliament adopted the new Organic Budget Law, as prepared by the Ministry of Finance, providing for greater transparency and accountability in the overall budget process.
“Under this legal solution, the commitment to strategic planning continues, with a medium-term public finance framework, i.e. medium-term budget planning in place. This is a key reform as regards public finance, being an integral part of SMART finance concept, all to the end of introducing a framework for pursuing sound, predictable and sustainable fiscal policy, as well as increased budget discipline and responsibility”, Minister of Finance, Fatmir Besimi pointed out.
As per the new Law, fiscal rules provide for making the fiscal policy more predictable and more accountable. They are also harmonized and consistent with the EU ones. New deadlines have been set for the budget preparation process, shifting its timeframe, stipulating provisions for management and disposal of financial and non-financial funds of the state and the municipalities, for the purpose of improved usage and disposal of the state funds, general provisions pertaining to public debt management and guarantee issuance, as well as determined procedures for borrowing for the needs of the central and local government, as well as issuing guarantees.
Law also governs the establishment of a Fiscal Council, medium-term budget planning, management of state and municipal funds, as well as the fiscal accountability and the fundamentals for putting integrated information public finance management system, in place. Budget will be presented more clearly through plenty of well-structured information.
Fiscal Council, being introduced for the first time, will provide for independent and professional analyses and views on the macroeconomic and fiscal assumptions, the Fiscal Strategy, the Budget, the budget execution reports, the fiscal risks, and similar. Fiscal Council will be an independent body, with experts in the field of public finance, macroeconomic and economics, as its members. It will be established by the Parliament, while its members will be proposed by MASA, the State Audit Office and the National Bank.
Minister of Finance, Fatmir Besimi pointed out that Ministry of Finance prepared, in cooperation with experts from international institutions such as IMF, World Bank, European Union and the Government of the United Kingdom, modern public finance management concept under the new Organic Budget Law.
Today, the need to adopt this Law was elaborated by Deputy Minister of Finance, Filip Nikoloski.
“The contemporary way of managing public finances entails a high level of digitalized processes, which should be implemented through the new IFMIS. This system will provide for better implementation of all processes, as well as their monitoring and control”, Nikolovski stated.
Thereby, as he underlined, the new Organic Budget Law will provide for improving the public finance management, strengthening the medium-term budgeting and ensuring greater control as to how citizens’ money is spent.
Rules and principles set under the new legal solution, will be also applied when preparing, adopting and executing the budgets of the local government units and the City of Skopje.