LAW OF THE REPUBLIC OF MOLDOVA

of July 25, 2014 No. 181

About public finance and budget and tax responsibility

For the purpose of ensuring sustainable development of public finance, strengthening of budget and tax discipline and ensuring effective and transparent management of public financial resources this law is accepted based on provisions of article 106-1 of the Constitution by acceptance on itself by the Government of responsibility to Parliament.

Chapter I. General provisions

Article 1. Subject of the law

(1) This law determines the general legal basis in the field of public finance, in particular:

a) establishes the budget and tax principles and rules;

b) determines components of the national public budget and governs the interbudget relations;

c) regulates the budget calendar and general procedures of the budget process;

d) differentiates competence and responsibility in the field of public finance.

(2) the Legal acts regulating certain industries and/or activities of separate budget bodies / budgetary institutions will not contain the provisions concerning preparation, approval and execution of the budgets and other procedures connected with the budget process which is only subject of this law.

Article 2. Scope of application

Provisions of this law are applied by preparation, approval, execution, the reporting and control of budgets and funds (further – budgets) – components of the national public budget, and also in ensuring financial monitoring of activities of public bodies / organizations on self-government, the state/municipal companies and commercial societies with completely or mainly the public capital.

Article 3. Basic concepts

For the purpose of this law the following basic concepts are determined:

the administrator of the budget – the budget body / the budget institution given the right of management of one of budgets components of the national public budget according to the competences and otvetstvennost provided by this law;

the administrator of the income – the budget body / the budget institution given the right of collection/return, accounting and receipt control to budgets components of the national public budget and their calculations and collection, responsible for correctness;

the budget assignment – the amount of financial resources approved in budgets for execution of the budget obligations;

the obligation – the payment obligation assumed by the administrator of the budget and/or other budget body / organization according to the legislation;

the budget body / budgetary institution – the subject of the public law according to constituent documents financed from budgets components of the national public budget;

independent/autonomous budget body - the body of the public power according to constituent documents financed from the government budget and which is not submitting to the Government;

public body / public organization on self-government – the subject of the public law, according to the regulation by which it is created, performing non-commercial (non-profitable) activities and acting on the basis of the principles of self-government;

the budget – set of the income, expenses and sources of financing intended for realization of functions of the central and local public authorities;

the budget of the national social insurance – set of the income, expenses and sources of financing intended for realization of functions of the state system of social insurance and management by it;

the budget of the budget body / organization – resource pool and the expenses intended for implementation of activities and authorized obligations of the budget body / organization;

the government budget – set of the income, expenses and sources of financing intended for realization of functions of the central public authorities, except for functions, relating to system of the national social insurance and system of compulsory medical insurance and also for establishment of the relations with other budgets;

the national public budget – the code of the budgets created within the budget system without the interbudget transfers;

local budgets – set of the income, expenses and sources of financing intended for realization of functions of bodies of local public authority of all levels;

the budgetary forecast for the medium-term period – the document by means of which tasks of budget tax policy are established and is determined the forecast of resources and expenses of the national public budget and its components in three-year prospect;

the budget calendar – the actions plan of the budget process, in which fixed terms of their realization and responsible bodies;

the payment business card - the payment card attached to the payment account opened in financial institution with the permission of the Ministry of Finance addressed to the budget body;

budget expenses – set of the payments approved in the budget / performed from the budget, except for the payments relating to transactions with financial assets and obligations of the budget;

budget classification – the unified system of codes grouping and systematizing the budget indicators according to certain criteria for ensuring comparability and also methodological regulations of their application;

the single treasurer account – the settlement account of the Ministry of Finance opened in system of financial accounting of National Bank of Moldova which means can be placed on one or several bank accounts considered as a unit, intended for management of means of budgets components of the national public budget;

accounts payable with the expired payment due date (overdue accounts payable) - the payment obligation which cannot be challenged any more, accepted by the budget body / organization based on the existing normative and legal acts which payment due date expired and which became debt;

temporary cash gap – the insufficiency of the money necessary for implementation of payments predicted during certain period of fiscal year from budgets components of the national public budget;

the annual budget decision – the legal act of local council which the local budget affirms and special regulations on the local budget for the corresponding fiscal year are established;

public finance – set of the economic relations connected with forming and administration of resources of budgets – components of the national public budget, public debt, debt of administrative and territorial units and other public assets;

funds of compulsory medical insurance – set of the income, expenses and sources of financing intended for realization of functions of system of compulsory medical insurance and management by it;

financial inspection – control measure on the basis of the principles of transparency and legality which establishes if financial and economic activities, transactions and transactions are performed according to regulations;

the annual budget law – the legal act which the government budget, the budget of the national social insurance, funds of compulsory medical insurance affirm, occasionally, and which establishes special regulations on these budgets for the corresponding fiscal year;

financial monitoring – selection process, processings and the analysis of indicators of financial and economic activities of public bodies / organizations on self-government, the state/municipal companies and commercial societies with completely or mainly the public capital;

results or effectiveness – the result of activities of the budget body / organization achieved owing to implementation of programs expressed in social and economic or other consequences in volume of the provided services or in efficiency of use of the budget resources;

the chart of accounts of financial accounting – the systematized nomenclature of codes of business accounts in the budget system and methodological regulations of their application;

budget tax policy – package of measures, connected with forming, management and use of the budget resources for realization of priorities economic and social policies;

the budget process – the sequence of actions for development, consideration, approval, execution and the reporting of budgets;

the project financed from external sources – complex of the actions financed by grants and/or loans granted the Government and/or the central and/or local public authorities by the international organizations and other external donors for achievement of one general and/or several specific purposes;

the interbudget relations – the financial relations established between components of the national public budget by the untied or caused allocation of financial resources in absolute expression;

distribution of the budget – process of disaggregation of the budgetary appropriations approved by the annual budget law / decision according to budget classification;

budget and tax responsibility – the form of implementation of the functions established by the law and competences of process of management of public finance assuming that budget tax policy and budgets are developed, affirm, performed and the reporting under them is performed with respect for the principles and rules established by this law and also according to other stipulated by the legislation regulations;

the budget resources – set of the income and sources of financing of the budget;

the budget system – the system of the budgets regulated by the law consisting of the government budget, the budget of the national social insurance, funds of compulsory medical insurance and local budgets;

treasurer system – system of accounting and monitoring by means of which it is provided, based on budget classification and the chart of accounts of financial accounting, cash execution of receipts in budgets – components of the national public budget, and also payments state and local budgets;

the budget balance – difference of the income and expenses of the budget. The negative balance of the budget represents deficit, positive balance – surplus, and zero balance – the budget balance;

primary budget balance – difference of the income and expenses of the budget without the expense accounting on interest payments on the state debt / debt of administrative and territorial units;

account balance – the cash amount which is registered on accounts of budgets;

the industry strategy of expenses – the document determining the purposes and priorities of industry policy approved with the predicted/planned amount of the budget resources for the medium-term period providing resource allocation according to programs within industry;

financing sources – set of the financial resources relating to transactions with financial assets and obligations of the budget;

budget receipts – the financial resources approved to receipt / coming to the budget, except for the means relating to transactions with financial assets and obligations of the budget.

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