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Ministry of Justice

Republic of Tajikistan 

 On January 31, 2020 No. 21

PRESIDENTIAL DECREE OF THE REPUBLIC OF TAJIKISTAN

of January 31, 2020 No. 1446

About approval of Strategy of management of public finances of the Republic of Tajikistan for the period till 2030

According to article 69 of the Constitution of the Republic of Tajikistan and for the purpose of increase in system effectiveness of public finances in implementation of the National development strategy for the period till 2030 and acceleration of social and economic development of the country I decide:

1. Approve the Strategy of management of public finances of the Republic of Tajikistan for the period till 2030 it (is applied).

2. To the government of the Republic of Tajikistan to take necessary measures for accomplishment of Strategy of management of public finances of the Republic of Tajikistan for the period till 2030 and to exercise constant control behind its realization.

3. And monitoring of strategy implementation of management of public finances of the Republic of Tajikistan for the period till 2030 to assign tasks on development of necessary documents to Coordination council concerning management of public finances.

4. To coordination council concerning management of public finances to develop and submit for approval to the Government of the Republic of Tajikistan the medium-term action programs for each three years and to take necessary measures for their realization.

5. Annually to provide to the Ministry of Finance of the Republic of Tajikistan in the Government of the Republic of Tajikistan information on the course of implementation of the medium-term three-year action programs.

President of the Republic of Tajikistan

Emomalii Rahmon

Approved by the Presidential decree of the Republic of Tajikistan of January 31, 2020 No. 1446

The strategy of management of public finances of the Republic of Tajikistan for the period till 2030

1. General provisions

1. The government of the Republic of Tajikistan attaches paramount significance to reforms in management of public finances for the purpose of achievement of the following long-term goals provided in the National strategy of development for the Republic of Tajikistan for the period till 2030:

1) achievement of comparable level of social and economic development for the countries with the average level of the income;

2) maintenance of sustainable development by diversification and increase in competitiveness of national economy;

3) expansion and strengthening of middle class;

4) industrialization.

2. Institutional reforms in the sphere of management of public finances play direct or indirect role in achievement of these long-term goals.

3. The strategy of management of public finances for the period till 2030 represents continuation of the reforms begun with the moment of realization of the previous Strategy of management of public finances for 2009 - 2018. New strategy will completely be approved with the National strategy of development for the Republic of Tajikistan for the period till 2030. Management reforms by public finances are substantially reflected in the current state programs, such as the Program of the state external borrowings of the Republic of Tajikistan for 2018 - 2020 (the order of the Government of the Republic of Tajikistan of October 26, 2017 No. 485), the System concept of the analysis of regulatory impact of the Republic of Tajikistan (the order of the Government of the Republic of Tajikistan of November 18, 2015 No. 673) and the Management concept local development in the Republic of Tajikistan for the period till 2030 (the presidential decree of the Republic of Tajikistan of July 11, 2015 No. 522).

4. The strategy of management of public finances for the period till 2030 includes:

- general strategic frame of reforms (Section 4);

- the main directions of reforms in the sphere of management of public finances the next 10 years based on the differentiated assessment of the course of realization of reforms and the got experience (the Section 5)

- the sequence and priorities of crucial elements of reforms at three stages of realization (the Section 6);

- accurate and achievable mechanisms of realization and monitoring of this strategy on the basis of realistic and measurable performance indicators (the Section 7);

- integrated management of risks.

5. In spite of the fact that the Strategy of management of public finances for the period till 2030 accurately determines the specific directions and measures of reforms, nevertheless, it leaves opportunity for the Government of the Republic of Tajikistan to react to the arising needs for the course of its realization.

6. For development of Strategy of management of public finances for the period till 2030 the working group was created and it is developed in coordination with Majlisi namoyandagon of Majlisi Oli of the Republic of Tajikistan, the relevant ministries and departments, and also national and international partners in development.

7. The strategy of management of public finances for the period till 2030 determines the following tasks:

- shows progress and the lessons learned during management reform realization by public finances in previous years;

- gives management reforms by public finances according to the national purposes and priorities of development of the Republic of Tajikistan; 

- determines priority and the sequence of key reforms for the period till 2030;

- determines the key ministries, organizations and departments of the Republic of Tajikistan responsible for strategy implementation of actions, and determines their roles in this process;

- increases awareness on strong communication between management reforms by public finances and priorities of development;

- offers key performance indicators (indicators) for measurement of progress during the entire period of realization.

2. Tasks of strategy of management of public finances for the period till 2030 and national priorities

§1. General tasks and purposes

8. The main objective of Strategy of management of public finances for the period till 2030 first of all consists in determination of the general direction of the reforms in the sphere of management of public finances designed to provide achievement of the following purposes:

1) increase in fiscal discipline;

2) improvement of allocation efficiency of financial resources;

3) constant control behind use of financial resources and target expenditure of the state money;

4) real strategic planning of financial resources for certain priorities;

5) increase in operating efficiency;

6) ensuring transparency and accountability of the state money.

9. Accurately formulated and realistic measures, and also indicators of their efficiency will allow to provide goal achievement, despite availability of system problems and sensitivity to external shocks which influence public sector of the Republic of Tajikistan. In case of the correct combination of institutional factors, mechanisms of coordination and financing, achievement of each purpose becomes matter of time.

10. In the long term of management reform by public finances will allow to create in the Republic of Tajikistan favorable conditions for effective management of public finances which is basic condition for increase in level and quality of life of the population, sustained economic growth, upgrade of economy and the social sphere, achievement of other strategic objectives of social and economic development of the country. Management of public finances represents system of interaction of the ministries, departments and other public institutions for effective use of public funds. In general, the management system shall provide with public finances the following long-term results:

1) macroeconomic stability;

2) effective resource allocation;

3) provision of the state services;

4) strengthening of statehood (table 1).

11. The strategic frame of management reforms by public finances provided in the Section 3, completely corresponds to these four long-term results.

Table 1. Elements of management reforms by public finances and priorities

Priorities

Crucial elements of management reforms by public finances 

1.

Macroeconomic stability

  • timely and solid financial and budget data;
  • positive control of public debt;
  • direction fiscal risks (ensuring fiscal discipline).

2.

Effective distribution of means

  • timely and solid fiscal and financial information;
  • project development of the budget on the basis of the corresponding structured budget process;
  • internal financial control and external audit, and also parliamentary control.

3.

Provision of public services

  • timely salary payments and other social payments;
  • inclusive budget process and accountability;
  • transparency in distribution and use of public funds.

4.

Strengthening of statehood

  • Basic Elements of budgeting (such as control and execution);
  • timely salary payments and other social payments;
  • reasonable and rational prioritization of decisions on expenses.

 

12. From the point of view of macroeconomic stability, the most important in management system public finances is that it is capable to provide the relevant information on condition of debt and deficit of budgetary funds. The management system public finances promotes proper distribution of financial resources and provision of the relevant information on the available resources, and also is focused on timely process of preparation of the budget in which all concerned parties participate. The interrelation between elements of management reforms by public finances and provision of public services is linear and direct, however the amount and quality of provision of services depend on availability of financial resources and proper system of public administration. Communication between management reforms by public finances and strengthening of statehood is especially difficult, considering that each of three other priorities of development in itself promotes creation of the effective state. The strong management system public finances is important element of institutional basis for development of strengthening of statehood.

13. From the practical point of view all elements of management reforms are closely interconnected by public finances among themselves and therefore reforms cannot be undertaken separately from each other. Nevertheless, the Government of the Republic of Tajikistan needs assistance of partners in development for development of solutions of various tasks, on the basis of discussion of various elements of management of public finances for the purpose of achievement of each of four priorities of development. The improved management systems public finances will promote gradual achievement of each of the above-named priorities of development. Other factors which are not connected with management of public finances and provided in Section 8 of Strategy of management of public finances for the period till 2030 also influence achievement of these priorities of development.

§2. Management of public finances and priorities of development

14. In September, 2016 the Government of the Republic of Tajikistan accepted the National strategy of development for the Republic of Tajikistan for the period till 2030 which will be realized within the next 15 years.

According to this Strategy "long-term goal of development of the Republic of Tajikistan is the population growth in prosperity on the basis of ensuring sustainable economic development".

15. The national strategy of development for the Republic of Tajikistan for the period till 2030 is directed to accomplishment of the following purposes:

- reduce the level of poverty in more than 2 times and to eradicate extreme poverty;

- increase country Gross domestic product in 3 and more times;

- upgrade the rating of the country in the Index of human organization development of the United Nations and "Business" of the World Bank;

- it is essential to increase expenses on social protection of the population;

- bring share of middle class to 50 percent of the population.

16. In this regard, strong economic institutes, and also reliable tax and budget policy and management system public finances are key factors of achievement of these purposes.

17. The president of the Republic of Tajikistan in the message of December 22, 2017 to Majlisi Oli of the Republic of Tajikistan, once again emphasized transition of the country to "industrial innovatively" scenario of development of economy by means of increase in productive employment, investment attraction in human capital and innovations.

18. In the National strategy of development for the Republic of Tajikistan for the period till 2030 need of transition to more complex and diversified economy based on growth of private sector and general welfare is emphasized. In the following message of December 26, 2018 the President of the Republic of Tajikistan emphasized that realization of National strategy of the Republic of Tajikistan for the period till 2030 is caused by enhancement of system of public administration, including management of public finances. The president of the Republic of Tajikistan highlighted that "The Ministry of Finance is entrusted to realize the strategy of management of public finances taking into account priorities of the country, high-quality accomplishment of profitable and account part of the budget, transparency of expenses, and also promotions of perspective plans of reforms in these areas".

19. Proceeding from the above-stated priorities the Government of the Republic of Tajikistan, in the National strategy of development for the Republic of Tajikistan for the period till 2030 determines problems (challenges) and national priorities in the sphere of management of public finances.

20. Problems and priorities in management of public finances according to the National strategy of development for the Republic of Tajikistan for the period till 2030 are shown in table 2.

Table 2. Problems and priorities in the sphere of management of public finances according to the National strategy of the Republic of Tajikistan for the period till 2030

No. of payment order

Problems (challenges)

Priorities

In the field of development of management of public finances

1.

Insufficient progress in transition from the estimate principle of financing of the ministries and departments to the program target financing directed to result

Development of program budgeting and implementation of practice (financing of potential) for executive bodies

2.

Lack of connection of the budget process with strategic planning

Strengthening of interrelation between the budget process and strategic planning

3.

Insufficient orientation of mechanisms the taxation for development to economy (connected with administration, burdensome for taxpayers, and wide circulation of informal economy)

Enhancement of the mechanism the taxation and tax administrations for the purpose of increase in collecting of taxes, decrease in administrative load of responsible taxpayers, increase in transparency and predictability of the taxation system

4.

Insufficient development of system of forecasting of budget incomes and obligations in coordination with macroeconomic forecasts

5.

Lagging of process of fiscal decentralization from process of transformations in system of public administration and, in particular, from process of reforming of management system public finances

Development of fiscal decentralization

6.

Quasifiscal transactions of the large state enterprises (operating losses, growth of debt obligations and failure to carry out of the state guarantees on them, etc.) exert significant and negative influence on stability of the government budget and possibility of accomplishment by the state of social functions

Increase in transparency and accountability through ensuring general availability of information, including through inclusion of quasifiscal transactions in the financial reporting, improvement of parliamentary control and participation of civil society in the budget process

In the field of local authority

7.

Functions and powers between central both local levels of executive bodies and local government bodies require optimization for the purpose of ensuring effective use of public funds

Redistribution of functions and powers for the purpose of increase in efficiency of regional authorities and local self-government, allocation of property and providing their financial autonomy

8.

Regional authorities have no sufficient resources for accomplishment of the functions assigned to them according to the solution of tasks of local value

    In the field of enhancement of system of public administration     

9.

The system of coordination of activities of executive bodies is inefficient, and mechanisms of efficiency evaluation of their activities at the central and local levels are insufficiently determined

Development of system of strategic planning and enhancement of coordination of policy on central and on local levels of public administration

10.

Weak level of implementation of electronic document management system between state bodies and electronic interaction of state bodies with citizens and business

Forming of necessary elements of "the electronic government" for realization of policy of "open data"

11.

Weak interaction of the state and business, the state and citizens in the course of national development, including lack of efficient consultative platforms for the current communications and the solution of strategic tasks

Development of mechanisms of strengthening of control from the public of activities of executive bodies of the government and increase in trust of citizens

In the field of ensuring efficiency of anti-corruption mechanisms

12.

The system of public procurements requires implementation of new and effective mechanisms of implementation of purchasing activity, application of measures for strengthening of potential of all participants of public procurements, and also scope the single portal of electronic procurement of the companies which are in state-owned property

Development and implementation of complex measures of legal and organizational nature for ensuring effective functioning of system of public procurements, with support on automation and use of modern information technologies by means of the single portal of electronic procurement, including purchases of the companies which are in state-owned property

13.

Poorly mechanisms of interaction of public sector and civil society work with use of public councils and other consultative platforms

Ensuring transparency and accountability of process of expenditure of public funds and resources

Enhancement of system of the state financial control, including internal and external audits

       

21. All above-mentioned priorities, are reflected in the current Strategy of management of public finances for the period till 2030. Thus, Strategy will completely be approved with the National strategy of development for the Republic of Tajikistan for the period till 2030 and other national priorities, and uses system approach on support of management reforms by public finances in the Republic of Tajikistan. Besides, the Strategy of management of public finances for the period till 2030, based on increase in system effectiveness of management of public finances, will promote strengthening of effective management, the balanced economic growth, sustainable economic development and reducing poverty.

3. Strategic frame of reforms in the sphere of management of public finances

 

Рисунок к УП РТ от 31.01.2020 г. №1446

 

4. Overall assessment of management system public finances

22. In 2009 the Government of the Republic of Tajikistan accepted the Strategy of management of public finances for 2009 - 2018. This Strategy provided basis for technical assistance from partners in development and promoted improvement of stability of public finances.

23. The strategy of management of public finances on key functional areas was added with action plans and programs of realization, such as planning of the budget, treasurer execution, financial accounting in public sector, national debt management, audit, and also strengthening of potential and training of employees of public sector.

24. It should be noted the period of action of the first two three-year mid-term plans (2009 - 2015) during which number of key steps on management reform was realized by public finances and the foundation is laid for a number of reforms. It is possible to carry the following to the main achievements:

- rules and procedures of mid-term budgetary planning are developed and implemented;

- systems of internal audit and financial control in public sector are improved;

- it is developed and implemented departmental classifications of republican and local budgets;

- new budget classification and new Unified plan of accounts which correspond to Statistics of public finances of 2001 is developed and implemented;

- the Single treasurer account republican and local budgets is created;

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