The Ministry of Finance has requested revenue/expenditure data from all ministries/divisions for the mid-year budgetary review report to be submitted to National Assembly by the end of February 2020.
A circular of the Finance Division, states that with the enactment of Public Finance Management (PFM) Act, 2019 special functions, authorizations, and responsibilities have been assigned to all Principal Accounting Officers (PAOs) relating to budget management, development projects execution, appropriations and expenditures and management of public sector entities financial outlooks.
Furthermore, as per section 34 of the PFM Act 2019, the federal government has to formulate a mid-year budgetary review report containing a comparison of budgeted and actual revenues, expenditure and financing for the period of July to December fiscal year 2019-20. The same report has to be placed before the National Assembly by end of February 2020.
To comply with the requirements of the PFM Act 2019, the Finance Division has completed the 1st quarter fiscal year 2019-20 budget review. To compile a mid-year budget review a set of proformas (6) developed by the Finance Division for reporting 2nd quarter data, budgeted vs actual revenue receipts, current & development expenditures, PSEs outlook, treasury single account, and fiscal risks forecasting is enclosed.
Finance Division has requested that the required 2nd quarter information/data of the current fiscal year 2019-20 on the provided proformas may be provided to this division by 10th January 2020. The required data is to be submitted in both hard and soft forms.
The first review under the Extended Arrangement under the Extended Fund Facility and request for modification of performance criteria released by the International Monetary Fund (IMF) states that:
The authorities are moving forward with PFM reforms, which will help instill budgetary discipline, improve transparency, and build confidence in the spending of budgetary resources. In this vein, and in line with the recently enacted Public Financial Management Act, the authorities will present a mid-year budget review report (end-February 2020) to provide budget and actual comparisons of revenue, expenditure, and financing during H1 FY 2020 as well as revised estimates for the budget year.
The IMF further stated that the review “Will also be an opportunity to indicate corrective measures in the event that fiscal risks to the annual targets materialize.” And proposed the following new structural benchmarks:
- Avoid the practice of issuing new preferential tax treatments or exemptions (continuous)
- Q2 FY 2020 tariff notification for capacity payments (end-January 2020)
- Presentation of the federal government mid-year budget review report to the National Assembly in line with the PFM Act (end-February 2020)
- Improve towards a substantial level the effectiveness in addressing terrorism financing, consistent with FATF Immediate Outcomes 9 and 10 (end-March 2020).
In line with the recently enacted Public Financial Management Act analytical work is required, the Pakistani authorities committed to the Fund to gather data for the timely preparation of:
- A mid-year budget review
- A strategy paper by March 15, 2020, and to present the budget review to parliament by end-February to guide implementation of the FY 2020 budget, containing budget and actual comparisons of revenue, expenditure, and financing through H1 FY 2020 as well as an assessment of the budget estimates for the entire budget year.
On the basis of the review’s findings, the government committed to implementing additional measures as needed to ensure that FY 2020’s annual targets are observed.