FISCAL MANAGEMENT (RESPONSIBILITY) ACT

Arrangement of Sections

1. Short title.

2. Government strategy to be based on responsible Fiscal Management.

3. Objectives underlying responsible Fiscal Management.

4. Fiscal Strategy Statement.

5. Objectives of Statement.

6. Contents of Statement.

7. Budget Economic and Fiscal Position Report.

8. Objectives of the Budget Economic and Fiscal Position Report.

9. Contents of Budget Economic Fiscal position Report.

10. Mid-Year Fiscal Position Report.

11. Objectives of the Mid-Year Fiscal position report.

12. Contents of the Mid-Year Fiscal Position report.

13. Final Budget Position Report.

14. Objectives of the Final Budget Position Report.

15. Contents of the Final Budget Position Report.

16. Pre-election Budgetary Position Report.

17. Contents of Pre-election Budgetary Position Report.

18. Minister to provide information for preparation of Pre-election Budgetary Position Report.

19. Statements of Responsibility.

20. Restrictions on Borrowing from Central Bank.

21. Reports and Statements to conform to accounting standards.

22. Power of Secretary to obtain information.

23. Reference to Reports of Standing Committees of Parliament.

24. Publication and sale of reports.

25. Protection of action.

26. Departure from the provisions of this Act.

27. Sinhala text to prevail in case of inconsistency.

3 of 2003,

15 of 2013,

13 of 2016.

AN ACT to ensure that the financial strategy of the Government is based on principles of responsible Fiscal Management, to facilitate public scrutiny of fiscal policy and performance, and to provide for matters connected therewith or incidental thereto.

[Date of Commencement: 9th January, 2003]

1. Short title.

This Act may be cited as the Fiscal Management (Responsibility) Act.

2. Government strategy to be based on responsible Fiscal Management.

The fiscal strategy of the Government shall be based on the principles of responsible Fiscal Management hereinafter referred to.

3. Objectives underlying responsible Fiscal Management.

The objectives underlying responsible Fiscal Management which need to be adhered to, by the Government in outlining the fiscal strategy of the Government are as follows—

(a) reduction of Government debt to prudent levels, by ensuring that the budget deficit at the end of the year 2006, shall not exceed five per centum of the estimated gross domestic product and to ensure that such levels be maintained thereafter;

(b) prudent management of the financial risks faced by the Government, having regard to the changing economic circumstances;

(c) adoption of policies relating to spending which do not increase Government debt to excessive levels;

(d) adoption of policies relating to spending and taxing, as are consistent with a reasonable degree of stability and predictability in the level of tax rates in the future;

(e) ensuring that the sum which is calculated as the guarantee and given as a percentage of the gross domestic product for the current financial year along with the two preceding financial years, does not in the aggregate exceed 10 per centum;

[S 3(e) am by s 2(a) of Act 15 of 2013; s 2 of Act 13 of 2016.]

(f) ensuring that at the end of the financial year commencing on January 1, 2013, the total liabilities of the Government (including external debt at the current exchange rates) do not exceed eighty per centum of the estimated gross domestic product for that financial year; and that at the end of the financial year commencing on January 1, 2020, the total liabilities of the Government (including external debt at the current exchange rates) do not exceed sixty per centum of the estimated gross domestic products for that financial year; and

[S 3(f) am by s 2(b) of Act 15 of 2013.]

(g) ensuring that the policy decisions of the Government have regard to the financial impact of such decision on future generations.

4. Fiscal Strategy Statement.

(1) The fiscal strategy of the Government shall be set out in a Fiscal Strategy Statement (hereinafter referred to as “the Statement”).

(2) The Minister in charge of the subject of Finance, shall in every year on the day fixed for the second reading of the Appropriation Bill in Parliament, cause the Statement of the Government to be released to the public and to also be laid before Parliament.

(3) The Government may, at any time for reasons to be stated by the Minister, revise its Statement.

(4) Where the Government revise its Statement, the Minister shall cause the revised Statement to be released to the public and tabled in Parliament, and the revised Statement shall be effective from the date of its release.

(5) The Minister shall—

(a) if Parliament is sitting on the date of the release of the revised Statement, cause a copy of such Statement to be tabled in Parliament within two weeks of the date of such release; or

(b) if Parliament is not sitting on the date of the release of the revised Statement, cause a copy of such Statement to be tabled in Parliament within two weeks of the next sitting of Parliament.

5. Objectives of Statement.

The objective of a Statement is to increase public awareness of the Government’s fiscal policy and to establish standards for evaluating the Government’s conduct of its Fiscal strategy.

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