Ministry of Finance of the Republic of Tajikistan

Ministry of Financeof the Republic of Tajikistan

The budget process andmedium-term expenditure

framework

Sarvar KurbanovDilshod Saidov

Formation of the State Budget of the

Republic of Tajikistan is carried out

according to the instructions on the draft

state budget for 2013 and the forecast

budget figures for 2014-2015

Formation of the State Budget of the Republic of Tajikistan

February - May

June – September

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1)1) The stages of state budget preparation for The stages of state budget preparation for 2013-2015 2013-2015

The structure of the budget process in The structure of the budget process in TajikistanTajikistan

1 macro-economic framework

earnings forecast

The medium-term investment plan

5 Medium-term program of public spendingMacroeconomic and macro-frameobjectives of fiscal policy,budget priorities,baseline budgetsceilings of expenditure by sector

8 Draft Law on the budget prepared by the Ministry of Finance, Internal

9 Presentation of the draft budget law & the budget figures for the next two years for approval to the Government

10 Presentation of the draft budget law & budget figure for the next two years in Parliament,hold budget hearings

2 Prepare a basic budget

The base budget operating costs

Base capex

3 Sector Strategy prepared / updated line ministries

On this basisSetting budget priorities

7 budget request and forecast budget figures for the next two years, prepared MMBF in the proposed ceilings

4 Determination of ceilings of expenditure by sector and MMBF

6 Approval of ceilings and identify new policy directions of the Budget Commission and the Government

Strategic phase Phase detailed budget preparation

Prediction of the state budgetthe process of preparation

Order of the Government of Tajikistan

Instructions for making predictions of the state budget (PGB) for 2013-2015. and the

State Budgetfor 2013

Definition of macroeconomic indicators and government

revenues in the medium term

Setting budget priorities for government spending

and ceilings by sector

Budget planning cycle 2013-2015

Function Date of Completion Responsible state agency

Definition of macroeconomic indicators March 1, 2013Ministry of Economy of the Republic

of Tajikistan

Government revenue forecast for the medium term. March 1, 2013 responsible ministries and agencies

The medium-term investment plan March 1, 2013Ministry of Economy of the Republic

of Tajikistan

Base capex March 15, 2013 MOF RT

Basic budget current expenditure April 1, 2013Ministries and agencies coordinated by

the Ministry of Finance

Setting budget priorities of the Government of the Republic of Tajikistan April 1, 2013 responsible ministries and agencies

Determination of the cost ceilings by sector May 1, 2013 MOF RT

Presentation of the draft PHB in 2012-2014. on an ongoing Budget Commission May 1, 2013 MOF RT

Determination of the cost ceiling for MMBF June 1, 2013 MOF RT

Distribution expenses ceilings MMBF. June 1, 2013 MOF RT

Budget instructions, step 2 July 1, 2013 MOF RT

Budget calendar 1st stage

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1. Ministry of Economic Development and Trade will make the forecast of macroeconomic indicators of the Republic of Tajikistan for the medium term, and submit to the Ministry of Finance

2. National Bank of Tajikistan is the Ministry of Finance forecast rate of the national currency to U.S. dollars and inflation in the medium term

3. The Ministry of Finance as part of preparing a macroeconomic forecast revenues of the State budget, based on a proposal MMBF setting budget priorities and prepares expenditure ceilings by sector over the medium term.

Definition of macroeconomic indicators and government revenues

in the medium term

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Budget planning tools

The base budget - budget planning tool that determines the cost of the current policy, if there is no change in the current policy / strategy for the sector. The budget takes into account the basis of inflation, one-time cost and the law established requirements in response to changing demographics

To balance the budget process and to avoid the need to change the ceiling of expenditure later in the process of budget planning (for example, due to changes in macroeconomic projections), is expected to create a reserve planning. Provision of planning - it's a small part of the total budget to fund new initiatives, which must be deposited as a reserve for the planning

After determining the base budget, the Ministry of Finance, based on macroeconomic and fiscal revenues and fiscal policies of the Government (the deficit, taxes, national debt), calculates the amount of budget funds for new initiatives

Forecasting the cost ceiling by sector / MMBF based on the following indicators:

forecast of macroeconomic indicators (GDP, inflation, exchange rate, etc.)

fiscal policy (the amount of the budget deficit, tax policy)

budget priorities for the sectors in the medium term

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Essential criteria for the application of ministriessetting budget priorities

Applications budget priorities of ministries must meet the following three criteria must :

MANDATORY CRITERIA clarification

1. Applications budget priorities should be of strategic importance for the RT

Applications must comply with key national priorities already identified in existing strategic documents approved LMP, that is:

-National Development Strategy (NDS);

-Poverty Reduction Strategy (PRS);

- Annual message of the President of Tajikistan to Majlisi Oli;

- already approved other key sector strategies.

2. Applications budget priorities should be strategically important to the industry

Application in respect of the budget priorities should be the key sectoral priorities not funded (or partially funded) and already approved by the Government in the sector strategies.

3. Applications budget priorities must be sustainable from a financial point of view

Application in respect of the budget priorities must be sustainable from a financial point of view and meet the planned resources of the state budget. As a consequence, the application in respect of the budget priorities should not exceed 25% of the sector budget for the current year (based on the functional classification of public expenditure).

Thank you for your attention !Tashakkur !

Ce ce !