President Dr. Mohamed Muizzu has today ratified the National Fiscal Responsibility Bill.
This bill was passed by Parliament during the 55th sitting of the 20th Majlis held on Wednesday, 27 November 2024.
The Government proposed the National Fiscal Responsibility Bill to establish a robust framework for implementing feasible fiscal standards. The law aims to ensure all state fiscal operations are sustainable, transparent, and accountable, fostering fiscal discipline in line with legal and regulatory obligations.
Under the new law, the Government is permitted to borrow from the Central Bank to manage cash flow, provided such borrowing does not exceed 2.5% of the average revenue collected over the preceding three years.
The law requires the Minister of Finance to formulate and submit a Fiscal Responsibility Charter, Fiscal Strategy Statement, Budget Statement, and Risk Statement to the Parliament. Additionally, the first Fiscal Responsibility Charter formulated under this new law, must be published in the Government Gazette within six months of the law’s ratification.
Additionally, Auditor General is also tasked with preparing reports on the Government’s implementation of the law’s provisions, which will be presented to Parliament. Parliament, in turn, is responsible for conducting a fiscal impact analysis, assessing government performance, and providing recommendations to government based on its findings.
Following the President’s ratification, the National Fiscal Responsibility Bill has been published in the Government Gazette and will take effect six months from the date of ratification and publication.
With the enactment of the new law, the current Fiscal Responsibility Act (Law no. 7/2013) is nullified.
