President Ibrahim Mohamed Solih has today ratified the Sixth Amendment to the “Public Finance Act” (Act No. 3/2006). The Bill was passed by Parliament at the 44th sitting of its third session of this year on Monday, November 29, 2021.
The amendments include modifications to the guidelines for granting government funding for loans with authorization only. It also specifies the principles and procedures that councils must follow when acquiring loans, selling assets, and funding grants to associations.
According to the new amendments, under section 82 of the Decentralization Act (Act no. 7/2010), councils have the right to lend their money in the event they make a profit on pre-agreed terms and conditions to other councils after they deduct the cost of operation from the income they receive. This also provides the government the power to pay money to the lending council from the receiving council’s budget if they fail to repay the debt to the lending council. The amendments further clarify the principles of lending as well as the mechanism for reporting pertinent loan information to the Ministry.
Furthermore, the bill makes significant changes to the Public Finance Act and requires the appropriate regulations and procedures to be published in the Government Gazette six months after it takes effect.
Following ratification, the Act has been published in the Government Gazette and has now come into effect.