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RESOLUTION OF COUNCIL OF MINISTERS OF THE REPUBLIC OF BELARUS

of December 23, 2015 No. 1080

About reforming of management system public finances of the Republic of Belarus

(as amended on 09-04-2021)

For the purpose of ensuring long-term balance and stability of the budget system, improvement of quality of management of public finances the Council of Ministers of the Republic of Belarus DECIDES:

1. Determine the strategy of reforming of management system public finances of the Republic of Belarus according to appendix.

2. Create interdepartmental council concerning strategy implementation of reforming of management system public finances of the Republic of Belarus.

3. Approve enclosed:

Regulations on interdepartmental council concerning strategy implementation of reforming of management system public finances of the Republic of Belarus;

structure of interdepartmental council concerning strategy implementation of reforming of management system public finances of the Republic of Belarus.

4. This resolution becomes effective after its official publication.

Prime Minister of the Republic of Belarus

A. Kobyakov

Appendix

to the Resolution of Council of Ministers of the Republic of Belarus of December 23, 2015 No. 1080

Strategy of reforming of management system public finances of the Republic of Belarus

Chapter 1. General provisions

Effective, responsible and transparent management of public finances 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.

The Ministry of Finance together with experts of the World Bank in September-October, 2013 carries out efficiency evaluation of management of public finances in the Republic of Belarus in 2010-2012 on the basis of the international methodology of PEFA which main objectives were receipt of complete information on effective management of public finances and determination of the directions of reforming. This assessment was carried out in the Republic of Belarus for the second time (for the first time - in 2009) and allowed to determine the happened changes.

By results of assessment the report "Public expenditures and financial accountability" for 2010-2012 (further - the report of GRFP) including 28 indicators which are united in six blocks is created:

realness of the budget;

completeness and transparency;

budget making according to the policy purposes;

predictability and control in the course of budget implementation;

accounting, maintaining documentation and reporting;

external control and audit.

Results of assessment are given according to appendix.

For evaluating regulatory legal acts, budget, methodical and other documentation, the reporting, information provided by the Ministry of Finance and other state bodies and the organizations * and also the report on results of assessment of 2009, the reports prepared by the World Bank, the International Monetary Fund were used.

______________________________

* House of Representatives and Council of the Republic of National assembly of the Republic of Belarus, State Control Committee, Office of Council of Ministers of the Republic of Belarus, National Bank, Ministry of Economics, National Statistical Committee, Ministry of Taxes and Tax Collection, Ministry of Justice, State Customs Committee, Industry ministry, Ministry of Health, Ministry of Education, Ministry of Labour and Social Protection, Ministry of anti-monopoly regulation and trade, Minsk regional executive committee (head financial management).

The report of GRFP became basis for determination of the priority directions of reforms, preparation of this strategy and realization at the expense of means of grant of Trust fund for technical assistance to the countries of the region of Europe and Central Asia concerning management of public finances of the project of the international technical assistance "Increase in efficiency and transparency of management system public finances in the Republic of Belarus" (No. 369 "About approval of the program and projects of the international technical assistance" (The national legal Internet portal of the Republic of Belarus, 23.04 is approved by the resolution of Council of Ministers of the Republic of Belarus of April 18, 2014. 2014, 5/38738).

Funds of the specified grant are allocated for purchase of consulting services for rendering to the Ministry of Finance the international technical assistance in accomplishment of the most important directions of this strategy now, and also capacity-building for carrying out future reforms within implementation of this project.

This strategy is directed to carrying out number of reforms in the average and long term, increase in efficiency and transparency of national management system by public finances, including taking into account studying of experience of other countries, including the countries of the European Union, the Eurasian Economic Union.

In case of development of the directions of reforming of management system public finances in addition to assessment containing in the report of GRFP considered also other factors, such as political and economic situation, legislative, administrative and other features. It should be noted that low assessment of indicators in itself was not the basis for inclusion of the corresponding direction in reforming priorities. Its importance in present conditions, complexity and potential time frames of realization, and also communication with efficiency in other directions were taken into account.

Chapter 2. Main objective and tasks of this strategy

Main objective of this strategy is ensuring long-term balance and stability of the budget system, improvement of quality of management of public finances.

The most important tasks of this strategy are:

increase in realness of the budget and its creation according to the purposes of state policy by means of increase in justification of forecasts of the key macroeconomic parameters of social and economic development of the Republic of Belarus used for preparation republican and local budgets, enhancement of assessment of budget receipts, determination and measurement of tax benefits, implementation of efficient system of mid-term planning of the budget and budgeting oriented to results;

achievement of transparency and completeness of the budget by enhancement of budget classification taking into account the principles and standards used in the international practice, integration in general budget decision making process on the state capital investments, optimizations of the interbudget relations, developments of effective and efficient management system extrabudgetary funds of the sector of public administration, enhancement of controling mechanisms public debt, forming of public information resources;

predictability and control in the course of budget implementation due to consolidation of public funds within the integrated uniform system of accounts, increase in efficiency of accounting and control in the course of execution of the budget obligations, creation of modern effective trade platform of public procurements;

enhancement of system of financial accounting and the reporting of the sector of public administration by its rapprochement with international accounting standards in the public sector (further - MSFOOS);

implementation of qualitatively new approach to the organization of internal financial control where in addition to check of legality and target use of public funds the efficiency audit directed to check of profitability and effectiveness of public administration shall be performed;

development of the new integrated management information system public finances (further - IISUGF) by creation of common information space in the sphere of management of public finances, supports of single methodology of planning, budget implementation, conducting accounting and HR records at all levels of the budget system of the Republic of Belarus.

This strategy is oriented to creation of general for all participants of the budget process of conditions and mechanisms of enhancement of management system by public finances which will be disaggregated and implemented by means of adoption of concepts and (or) regulatory legal acts.

In process of development of the specified documents and in deeper analysis of the reasons which are the cornerstone of low performance of separate parameters of management also preparation of the corresponding training plans of government employees, other specialists for the purpose of effective implementation of tasks of this strategy is provided.

Chapter 3. Increase in realness of the budget and its forming according to the purposes of state policy

Increase in justification of forecasts of the key macroeconomic parameters of social and economic development of the Republic of Belarus

Now the procedure for development and the requirement to contents of the state forecasts and programs of social and economic development of the Republic of Belarus are determined by the Law of the Republic of Belarus of May 5, 1998 "About the state forecasting and programs of social and economic development of the Republic of Belarus" (Vedamastsi Natsyyanalnaga to descent of Respubliki Belarus, 1998, No. 20, the Art. 222). The operating system of the state forecasting was created in transitional conditions and adapted for specifics of national economy. However in 17 years of application of the specified Law the situation in national economy and beyond its limits significantly changed. The state forecasting based on program implementation of social and economic development for the medium term and to a lesser extent on the flowing or developing economic country situation, leads to the fact that planning of the budget is performed, as a rule, taking into account adjustment (indexation) of assignments of last years in the conditions of lack of efficient mechanisms of redistribution of the budget resources, and budget implementation - with permanent adjustments within year.

Change of approaches to development and refining of the macroeconomic forecast parameters, timely taking measures of reaction adequate to the developing situation, improvement of quality of forecasts is required. Need of updating of the legislation on forecasting, streamlinings of planning documents, increases in flexibility and forecasting effectiveness in new conditions, strengthenings of strategic and tseleoriyentiruyushchy nature of forecasts ripened.

Realization of other directions of this strategy, namely implementation of mid-term planning of the budget oriented to results, enhancement of controling mechanisms by public debt and also harmonization with systems of the state forecasting in member countries of the Eurasian Economic Union depends on efficiency of transformations in system of the state forecasting.

It is essentially important that the macroeconomic forecasts which are been the basis for the budget relied on set of the approved assumptions which shall be plausible and have the maximum level of accuracy. It will provide strong base for planning of budgeted expenses, including for the medium term.

For preparation of the budget for the medium term annual development of the forecast of social and economic development of the Republic of Belarus for the medium term, and also determination of procedure for development of scenario conditions on accurately established list of forecast indicators and the choice of version of the forecast which parameters shall be applied in case of creation of forecasts of the income, expenses of the budget, public debt, mechanisms of its refining and adjustment is provided.

It is necessary that the developed forecasts were based on realistic estimates, all available information and were applied consistently that preparation of macroeconomic forecasts was considered as continuous process, the methodology was enhanced and staticized eventually. Strengthening of personnel and technical capacity of the relevant services of the Ministry of Economics and its research economic institute shall play significant role in improvement of quality of forecasting.

Lack of real macroeconomic forecasts, and also synchronism in change of all legal acts influencing the budget process will not allow to perform high-quality transition to mid-term planning of the budget in practice. If macroeconomic forecasts are excessively optimistical, they will lead to excessive expectations concerning budget receipts based on what the new directions of expenses (state programs and subprogrammes) which will not be financed subsequently will be approved. It is one of the main problems in case of budget making in many countries of Organization for Economic Cooperation and Development (further - OECD *). For its decision along with use of technical models the attention is paid to development of the institutional mechanisms providing reliability of the macroeconomic forecasts used in case of budget making. At the same time not only the public institutions, but also the organizations which are specially created for these purposes from the commercial sector participate in development of forecasts.

______________________________

* Member countries of OECD - Australian Union, Republic of Austria, Kingdom of Belgium, United Kingdom of Great Britain and Northern Ireland, Hungary, Federal Republic of Germany, the Hellenic Republic, Kingdom of Denmark, State of Israel, Iceland, Kingdom of Spain, Ireland, Republic of Italy, Canada, Republic of Korea, Grand Duchy of Luxembourg, United Mexican States, Kingdom of the Netherlands, New Zealand, Kingdom of Norway, Czech Republic, Republic of Poland, Portuguese Republic, Slovak Republic, Republic of Slovenia, United States of America, Republic of Turkey, Republic of Finland, French Republic, Swiss Confederation, Kingdom of Sweden, Republic of Chile, Republic of Estonia and Japan.

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