PRESIDENTIAL DECREE OF THE REPUBLIC OF TAJIKISTAN

of March 20, 2009 No. 639

About approval of Strategy of management of public finances of the Republic of Tajikistan for 2009 - 2018

According to article 69 of the Constitution of the Republic of Tajikistan and for the purpose of increase in system effectiveness of public finances and acceleration of social and economic development of the country according to the tasks determined in the National development strategy for the period till 2015 and in the Strategy of reducing poverty for 2007 - 2009 I decide the Strategy of reforming of system of public administration for 2006 - 2015:

1. Approve the Strategy of management of public finances of the Republic of Tajikistan for 2009 - 2018.

2. To the government of the Republic of Tajikistan to take necessary measures for accomplishment of Strategy of management of public finances of the Republic of Tajikistan for 2009 - 2018 and to exercise control of its realization.

3. And monitoring of strategy implementation of management of public finances of the Republic of Tajikistan for 2009 - 2018 to assign tasks on development of necessary documents to Coordination council concerning management of public finances.

4. To the Ministry of Finance of the Republic of Tajikistan for the purpose of strategy implementation of management of public finances of the Republic of Tajikistan for 2009 - 2018 to create in the structure the Center of support of interbudget financial transactions on self-supporting basis in a month.

 

Approved by the Presidential decree of the Republic of Tajikistan of March 20, 2009 No. 639

The strategy of management of public finances of the Republic of Tajikistan for 2009-2018

List of reducings

AGFKBK - Agency on the state financial control and fight against corruption of the Republic of Tajikistan

BO - State-financed organization

VBS - Extrabudgetary funds

GKIUGI - State committee on investments and management of state-owned property of the Republic of Tajikistan

GS - Public service

GUGB - Head department of the government budget of the Ministry of Finance of the Republic of Tajikistan

RUMBLE - State unitary enterprise

GUTsK - Head department of the Central Treasury of the Ministry of Finance of the Republic of Tajikistan

EKS - Single treasurer account

SGF - Statistics of public finances

ISUF - Management information system finance

IT - Information technologies

KBO - Key state-financed organization

MAS - (department) of the macroeconomic analysis and statistics of the Ministry of Finance of the Republic of Tajikistan

MASI - (management) of the macroeconomic analysis and summary information of the Ministry of Economic Development and Trade of the Republic of Tajikistan

The Ministry of Finance - the Ministry of Finance of the Republic of Tajikistan

MSBUGS - International accounting standards for public sector

MTSZN - Ministry of Labour and Social Protection of the population of the Republic of Tajikistan

MFR - International fund of development

MEDT - Ministry of Economic Development and Trade of the Republic of Tajikistan

Tax Code - The Tax Committee under the Government of the Republic of Tajikistan

NSR - National development strategy

OGRFP - Overview of the public expenditures and financial accountability

PGI - Program of the state investments

PMUGF - Project of upgrade of management of public finances

POGR - Program overview of the public expenditures

PRGS - Project of reforming of public sector

PS - Chart of accounts

PRT - Government of the Republic of Tajikistan

PTsKV - Program of centralized capital investments

VULTURE - (management) of Summary indicative planning of the government budget

SPGR - Medium-term program of the public expenditures

SRSGU - Strategy of reforming of system of public administration

CoB - Strategy of reducing poverty

TS - Customs Service under the Government of the Republic of Tajikistan

UVKA - Management of internal control and audit

UGF - Management of public finances

1. Introduction

Premises

The government of the Republic of Tajikistan performs the comprehensive program of reforms. Within this program of reforming special attention is paid to questions of the management of public finances (MPF).

UGF takes the important place in three main strategic documents of the Republic of Tajikistan determining the agenda of reforming of the country:

- The national development strategy for the period till 2015;

- The strategy of reforming of system of public administration for 2006-2015;

- The strategy of reducing poverty for 2007-2009.

The National Development Strategy (NDS) establishes the following national priority concerning reform of UGF: "The reform of public administration directed to forming in the country of system of national development which main feature are transparency, accountability and orientation on fight against corruption".

In the Strategy of Reforming of System of Public Administration (SRSPA) it is said that: "The management system public finances requires increase in efficiency and openness" and that "Tajikistan is at the initial stage of budget reform".

The Strategy of Reducing Poverty (SRP) contains more detailed information. The CoB determines the main problems and includes reforms in areas of public administration, macroeconomic policy, the investment climate and regional cooperation. Improvement of budget process and carrying out tax reforms are priority directions within which strengthening of communication between CoB and the budget by means of the Program of the State Investments (PSI) and the Program of Centralized Capital Investments (PCCI) is provided.

The purpose of Strategy of UGF consists in determination of more detailed program of reforming of UGF. The strategy of UGF which is described in this document contains the long-term program of reforms of the sphere of UGF. Acceptance of Strategy of UGF will allow:

- focus efforts on reforming, in view of the sequence and priority of reforms;

- harmonize and coordinate different reforms in the field of UGF;

- increase efficiency of implementation of reforms;

- improve coordination of donors and direct their help to the main priorities.

2. The overview of the current situation in the field of management of public finances

2.1 Determination of the UGF system

The UGF system is system of the organizations, provisions of the legislation, procedures and processes for management of the state financial assets and obligations and monitoring of financial condition of the state companies.

The budget cycle is basic process in the UGF system. In it six main stages are allocated: (1) strategic planning, (2) preparation of the budget, (3) budget implementation, (4) financial accounting and reporting, (5) external audit, (6) analysis of realization of policy.

Maintenance of the following three main functions of the UGF system: (i) respect for general financial discipline, (ii) ensuring strategic resource allocation, (iii) maintenance of efficiency of the current activities, will allow to reach respectively:

* control over the income, expenses and debt and steady balance between them;

* resource allocations taking into account strategic priorities of the Government of the Republic of Tajikistan;

* effective and rational provision of the state services.

2.2 Diagnostics of the current efficiency of UGF

Fiscal discipline

Use of conservative approach in case of assessment of budget receipts and restriction of budgeted expenses is the important principle in the conditions of limitation of resources and economic vulnerability of the country.

The operating treasurer system has no sufficient means for effective management of process of budget implementation and forming of the reporting. The system of the Single Treasurer Account (STA) is implemented only partially, i.e. local budgets work through separate bank accounts in commercial banks, and special off-budget funds of state-financed organizations pass through separate accounts. Thus, instead of the Single treasurer account in the country large number of treasurer accounts is effective, increasing administrative costs by budget implementation. Also, there is no single centralized database on employees of the budget sphere, there is no single system of the electronic pay-sheet for salary accrual to workers of the budget sphere. Besides, the salary is charged is decentralized at the local level that leads to weakening of centralized financial control and creates conditions for manipulations with the salary on places.

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