National Fiscal Responsibility Act ratified

President Dr Mohamed Muizzu last night ratified the National Fiscal Responsibility Act.

The Act proposes to establish a stronger framework for implementation of fiscal standards, and to promote sustainability, transparency, accountability and fiscal discipline in State fiscal operations.

The Act allows the government to borrow from central bank Maldives Monetary Authority (MMA) to manage cash flow, with a cap stipulated at 2.5 percent of average revenue in the previous three years.

The Minister of Finance is also required to formulate a Fiscal Responsibility Charter and submit it to Parliament within six months of the date of ratification.

The minister must also draft a Fiscal Strategy Statement, Budget Statement and Risk Statement and present it to parliament.

The Auditor General is also required to prepare reports of the government's implementation of the actions outlined in the Act, and to present these to the parliament.

Parliament will then conduct a fiscal impact analysis, based on which it will offer recommendations to the government.

The Act, ratified last night, will come into effect in six months. The ratification of this Act also nullifies the existing Fiscal Responsibility Act.