Draft laws 'On amendments to Laws', 'On unemployment insurance
and 'On Chamber of Accounts' were submitted for the discussions in
Azerbaijani Milli Majlis (Parliament) Committee on Economic Policy,
Industry and Entrepreneurship, Trend reports.
Amendment to the law 'On budget system' was prepared with the
aim to implement the law No. 440-VIGD of December 24, 2022
(hereinafter referred to as the Law).
The Law determines that extra-budgetary funds can also be
established as targeted state financial funds that have cash,
without creating a legal entity. Income and expenses of the fund
for ensuring obligations on the state debt and guarantee are
excluded from the consolidated budget.
The article regulating the budgetary rule by the said Law has
been amended. According to the new edition, in the medium term
perspective, it's established that the ratio of the non-oil base
deficit of the consolidated budget to non-oil GDP and the ratio of
public debt to GDP can't exceed the upper limits set by the
president of Azerbaijan, and these upper limits should be
calculated based on the export price of crude oil, established by
the Cabinet of Ministers of Azerbaijan.
The article regulation documents prepared together with the
draft law of state budget and presented in Azerbaijani Parliament
(Milli Majlis) excludes the total financial balance on the
territory of Azerbaijan and comparison of revenues and expenditures
for the next budget year with the actual results of the previous
year and the expected results of the current year (according to the
classification of income, at the paragraph level of the functional,
economic and organizational classification of expenditures), and
other changes are made to this article.
Monthly reports of budgetary organizations and organizations
receiving financial assistance from the state budget on the use of
these funds are cancelled. The State Debt and Guarantee Obligations
Fund is defined as an independent extra-budgetary fund without the
formation of a legal entity.
A number of amendments are made to the article regulating the
relationship between the state budget and state non-budgetary
funds. The management of state extra-budgetary funds, the use and
accounting of their funds are determined in accordance with laws
and other regulatory legal acts regulating the activities of state
extra-budgetary funds. The implementation of coordination of
operations on the preparation, execution and control over the
execution of the state budget, budgets of state extra-budgetary
funds through the action plan refers to state extra-budgetary
funds, provided for in Article 1.1.31 - 1 of the Law of the
Republic of Azerbaijan (hereinafter - the Law) 'On budget
It was also established that the upper limit of expenditures of
state off-budget funds established without the creation of a legal
entity cannot be higher than the balance of these funds at the
beginning of the budget year and the amount of funds received
during the year, and that annual reporting on their financial
operations isn't submitted together with the report on the
implementation of the state budget.
The mentioned amendment created the necessity to remove inner
contradiction in the Law, making the following change 'On
unemployment insurance' and 'On Chamber of Accounts'.
In connection with the exclusion from Article 12 of the Law of
the total financial balance for the territory of the Republic of
Azerbaijan (12.1.9), at the suggestion of the Ministry of Finance,
which prepared this document, the Law provides for the exclusion of
the concept of 'total financial balance' (Article 1.1.22).
According to Article 27.2 of the Law, when expenses of state
off-budget funds are included in the expenses of the consolidated
budget, operating expenses of the State Oil Fund and expenses
related to the placement of funds in international banks and other
financial institutions are excluded. This circumstance creates the
need to exclude the last item of expenditure, as it contradicts the
recently introduced article 1.1.31-2.
The amendment in the articles 15.4 and 19.4 of the Law are aimed
at clarifying the wording and eliminating the contradiction with
Article 22-1.3 of the Tax Code of Azerbaijan. In accordance with
Article 27.5 of the Law, the forms of reporting on income and
expenses of state extra-budgetary funds, provided for in Article
1.1.31-1 of the Law, and the frequency of their submission are
determined by the Ministry of Finance, taking into account the
opinion of the Chamber of Accounts and state extra-budgetary
These extra-budgetary state funds publish these reports in the
press once a quarter, with presentation to the head of state, the
Ministry of Finance and Chamber of Accounts. For the avoidance of
contradiction, the State Social Security Fund and the Unemployment
Insurance Fund are excluded from Article 27.9. Taking into account
Articles 1.1.5, 1.1.31-1 and 1.1.31-2 of the Law, it is proposed to
amend Article 20.1 of the Law 'On Unemployment Insurance' to
accurately reflect that the Unemployment Insurance Fund is a state
non-budgetary fund established without education legal entity.
According to the change in Article 27.7, Chamber of Accounts
gives an opinion only on draft budgets of state extra-budgetary
funds provided for in Article 1.1.31-1 of the Law 'On budgetary
system', and annual reports on the execution of these
extra-budgetary state funds. With this in mind, amendments to the
law 'On Chamber of Accounts' are proposed.
After discussions, the draft law was recommended for
consideration at the plenary session of the Parliament.
Moreover, the new edition of the Law provides the concepts of
budget loans, the upper limit of the expenditures of the
consolidated budget, the non-oil base deficit of the consolidated
budget and the medium term prospect.
Follow us on Twitter @AzerNewsAz
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.