A proposal has been submitted to amend the Fiscal Responsibility Act, seeking to extend the timeframe for drafting the mandatory five-year Fiscal Responsibility Charter from six months to two years. The amendment was introduced by ruling People’s National Congress MP for Huraa, Dr Anara Naeem, and is scheduled for its first reading in parliament today, followed by a preliminary debate.
Under the Act, which was passed last year, the Finance Minister is required to formulate and publish the Fiscal Responsibility Charter in the gazette within six months of the start of each presidential term. The charter sets out the administration’s fiscal policy direction for the next five years and is intended to promote sustainability and transparency.
Dr Anara Naeem’s proposal would extend this preparation period to 24 months. She has also proposed allowing two years instead of six months for drafting the regulations required after the Act comes into force. In addition, the bill seeks to remove the clause that defines a presidential term as coming into effect in 18 months.
The Fiscal Responsibility Act currently permits the government to borrow from the central bank, the Maldives Monetary Authority, for cash flow management, with such borrowing capped at 2.5 percent of the average revenue collected over the preceding three years.
