Parliament approves two year extension for drafting fiscal responsibility charter

Parliament has passed an amendment to the National Fiscal Responsibility Act extending the timeframe for each government to draw up a five-year fiscal responsibility charter from six months to two years.

The amendment, submitted by PNC MP Dr Anara Naeem on behalf of the government, was approved with 58 votes in favour.

Under the law introduced by the current administration and passed last year, the finance minister is required to prepare a five-year fiscal responsibility charter within six months of the start of each presidential term and publish it in the Government Gazette. The charter is intended to ensure sustainable and transparent fiscal policy across each five-year term.

Anara’s amendment extends the deadline for drafting the initial charter to 24 months and similarly grants two years to formulate the necessary regulations, replacing the previous six-month window. The bill also removes a provision stating that the presidential term begins in 18 months.

In November last year, the government proposed a State Fiscal Responsibility Act replacing the State Expenditure Responsibility Act with the stated aim of strengthening procedures governing the printing of money.

Under the Fiscal Responsibility Act, the government may obtain an advance from the Maldives Monetary Authority (MMA) of up to 2.5 percent of state revenue for three years to manage cash flow.