Report of the Committee on Economy and Investment about the federal budget of the Republic of Iraq for the year 2016

November 22, 2015

Submitted
The budget is no longer simply legislation to legalize expenditure and income are even plan includes an estimate of the expenses of the state and its revenues during the period of a year and are spending estimate in the light of the objectives that the government is seeking to to implement them is the budget year government program reflects the orientations of State and translated in digital.

Through the budget can detect various events and activities of the state and this is done by analyzing the revenue numbers and expenditure so is the budget a key tool able to state from which to achieve political, economic, social and developmental goals, complemented considered budget tool for planning, monitoring and evaluation.

To balance the other functions as basic as adjust the financial policy of the State and the achievement of its objectives and implementation of economic and development policy of the State, and the most important features that define the modern general budget in developed countries, the traditional general budget at the moment is related to the budget document to the economy, while the 2016 budget year, which came from the government lacks to the economic objectives that the government emphasized the implementation of the program through the government put forward in 2014 when the formation of the government.

The economic and investment commission has held several meetings with specialists, experts and university professors and advisers to discuss the federal budget of the Republic of Iraq for the year 2016, the Committee noted the need to provide its report included observations and recommendations of the Committee on the Budget and the emphasis is primarily on the need to support the private sector and push to find other resources of the state of non-oil and support for industry, agriculture and tourism sectors and other sectors.




Inter discussions have shown the following challenges: -

1. disintegration of the system of public policy-making which makes budget priorities Atsjab visions Alastrennigah as they are, for example, in the government program packages and economic reform and development plans.

2. The share of agriculture and industry and water resources formed in low rates of investment expenditure and it must reconsider the distribution of pigment production sectoral allocations to diversify the Iraqi economy resources.

3. The share of education and health education and formed a low investment rates in the expenditures and this indicates the survival of Iraq away from the path of sustainable human development in terms of human development and its device extremely which enhanced the dignity of humanity and embodied the rights and human security

4. to be Iraq at the site of the sites of the International Classification, which reflects the hierarchy of Iraq into the international peace and development, and this requires a re-distribution of investment allocations to ensure Iraq's site especially after the announcement of the international goals of sustainable development for the period (2015-2030) by the United Nations.

5. We demand a budget managed purposes and not to rely on stereotypes previous budgets that have not achieved economically or developmentally and this target Iraq could announce new economic productivity of Iraq away from rentier identity identity.

6. budget is speaking numbers of facts reflect the movement and direction and path State and feat achieved economic, so it is necessary to convert expenses after rationalization to the facts and the achievements of economic sought by the public through careful perusal and scrutiny in many of spending unnecessary details and which can be pressure expenses and the exclusion of many passages of it .

General Notes:

First - already installed a number of observations on the state of the public budgets for previous years, it has not been introduced or adopted in the preparation of subsequent budgets, including: -

(A) lack of clarity in planning and objectives in the general budget for 2016 and prior years is an indication of lack of those who capitalize on the drawing state policy and budgeting lessons from past experiences

(B) not to give importance to economic objectives highlighted by the government in its program of government for the years 2014 -2018 in the general budget for 2016.

T did not follow the Ministry of Finance ministries, private and public transparency in the Declaration of the financial statements represented income and expenditure and final accounts through its official website so that all concerned be found, follow up and monitor its performance.

D Ministry of Finance has not adhered to the provisions of Law No. 95 of 2004 (Section 11) to provide a paragraph in the final accounts and financial reports and the reports of the Bureau of Financial Supervision to the House of Representatives for previous years 2004-2005 financial settlements that have not been in it.

(C) the Ministry of Finance did not provide Federal financial statements in accordance with the content and classifications of national and international accounting standards, which allows the legislator to see when the adoption of the budget, including: -

1. Supreme Audit Report

2. beginning and ending balance of the single treasury account and a summary of the account through movement

3. fiscal year.

4. Report deviations between income withdrawn and Estimated and actual expenses allocated and credits.

5. Report on the Federal Government's borrowings for the financial year and the total external and internal debt, including Treasury of the Republic of Iraq remittances across outstanding including late payments.

6. report on spending from the emergency reserve.

7. report issued by the federal government guarantees during the financial year.

8. The report of the Minister of Finance for all loans and guarantees issued by the region and the province is part of a region and the provincial council.

9. unpaid amounts for investment contracts.

10. deductions due for decades.

11. credits and letters of guarantee that the funds allocated have not received goods its own external services.

12. Profits posts undistributed international tribunals and is received.

13. subsidies and donations, gifts and grants report.

14. uncover investment projects prepared by the Ministry of Planning and explaining the physical percentage of completion (technical) distributed sectorally and geographically and administratively.

15. statements vocabulary advances and secretariats.

16. detection of financial position and income and expenditure revealed.

17. cash budget of the government.

18. The method of using the budget surplus and means of financing the budget deficit

19. Oil revenues account

20. Fiscal policy work rules

21. macroeconomic framework and assumptions on which the budget was prepared on the basis of

22. New policies on the budget and the financial impact

23. Financial Risk

24. The use of the contingency reserve

25. economic and financial situation and the methods and results of the economic plans Report

26. Total government debt

27. estimates that occur on the budget during the financial year

28. Financial Plan for loans and guarantees

29. E. statements and schedules required financial statements

Second -

The government confirmed in its program of government for the years 2014 --2018 for its support to the private sector and encourage and protect it and the need to move the Iraqi economy from mono economy source to a diversified economy in which the private sector plays an important role in advancing the progress and development .ala that the federal budget for the year 2016 free of any application on the ground, the private sector and after (12) years of the fall of the former regime and after the implementation of previous budgets, there is still a sector away from coping with the development and lacks the administrative and technical skills and to sufficient funds and expertise accumulated capital, so the government does not promote productive economic sectors not achieve the desired economic development, so the state support the private sector practically and effectively and this is done through the following: -

- Activate the protection of the national product to compete with foreign goods and approved by the House of Representatives, particularly the laws of the customs tariff law No. (22) for the year 2010.

- Granting soft loans and lifting roofs and reduce their benefits and extend the repayment period to suit the size of the projects.

- Increasing interest rates currently approved to encourage citizens to savings and deposit.
- Electric power and fuel material of different kinds of plants and factories and workshops of the private sector at subsidized by the state to provide.

- To provide all possible technical and financial incentives and facilities for investors known for their expertise obsolete financial capacity of those who are outside Iraq.

- Coordination to link the national private sector alien to increase the effectiveness of the national private sector to be the hinterland of national industries in all fields.

- Continue to provide security and stability to the citizens and the elimination of terrorism and to strengthen the rule of law.

- Exempt the private sector from all taxes and fees imposed on the production and income types and allow him to import raw materials, machinery and other machinery and production requirements are exempt from customs duties and taxes for a period of (10) years to come.

Notes to the economic and investment commission about some of the provisions in the federal budget of the Republic of Iraq for the fiscal year / 2016 materials



The first chapter (revenue)

Article 1 (b) of the Commission proposal
Calculation of revenue from export of crude oil based on the price of $ 40 per barrel and the rate of export of 3.2 million barrels / day.

Chapter II (expenditure and deficit)
Article (2) I. expenses

Paragraph (c) The Commission proposes to amend Article as follows:
(Allocates 1% of the general budget for contingency reserve) to the fact that the circumstances in which Iraq is facing the most urgent and these customizations include all of the shows of emergency and is not mentioned in the general budget situations after ratification.


Secondly - deficit

(A) the Commission proposes, according to the Financial Management Law No. (5) for the year 2004 that the deficit does not exceed 7% rate. And allow the government to borrow the internal and external borrowing will be conditional on the approval of the legislature for each loan individually, and to direct external borrowing to finance economically viable investment budget projects exclusively.

(E) proposal of the Committee shall be as follows paragraph - authorizes the Council of Ministers for implementation of investment projects Order forward to no more than $ 5 billion and attached to Ministries of Finance and Planning schedules projects according to priorities, it provided that these amounts allocated year repayment.

- Article 3 The Commission's proposal to delete Article

- Article 4 The Commission proposed the deletion of paragraph - a.

- Article -8- Commission's proposal to add the words (taking into account the Mahromep areas in those provinces).

- Article 9 requires clarification and explanation of the meaning of actual spending, which responded paragraph - secondly - of this article. The Committee suggests that the integration of materials (9,10,11 0.20) because they are competent in the budget of the Kurdistan region.

- Article - 14. The Committee proposes that the Ministry of Finance provides tables advances in which the conditions of the fire for the purpose of settlement and not repeated for subsequent years, otherwise the relevant authorities will be presented to legal accountability and legal consequences, either advances in which the conditions of firefighters available For the Ministry of Finance and the Office of Financial Supervision sent schedules with the reasons for irregularities to be presented to the House of Representatives.

- Article -15- Committee suggests that you read the article as follows (committed to all ministries and departments not associated with the Ministry and the regions and governorates not organized province of the implementation of the Investment Law No. 13 of 2006, as amended, and subject the violator or a transgressor of the accountability of the legal and administrative consequences, and the Council of Ministers to provide investment map of all sectors are included with the the draft budget.

- Article -16 - This article is repeated every year and worthwhile placed within the law stimulates the circles on the self-sufficiency of their resources and determine the percentage of these revenues as incentives for workers in these departments.

- Article -18- Commission's proposal to delete Article. Because it is a calculation not Qadah Drjha needs in the budget bill.

- Article -19- Commission's proposal to delete Article because they conflict with the law.

- Article -21- Commission's proposal to delete material they have nothing to do with the budget and whether this body that her privacy be its own Income and spending and then ratified by the budget and what is the regulator that oversees the process.

- Article -22- Commission proposed procedures are being deleted cabinet decision, not the House of Representatives.

- Article -23- Commission proposal being deleted material does not serve as a legal substance in administrative procedures.

- Article -24- Commission's proposal to delete material being unrealistic and did not show credibility in its implementation in the past years.

- Article 25 Commission proposal and to be reformulated as follows:

- (A) the continued imposition of the sales tax and restrict the revenue of the public treasury that the work is done in the light of the regulations in force, and as follows -

- 20% on Kartat mobilization of mobile phone networks and the Internet from the card value.
- Ratio of 300% on alcoholic beverages and cigarettes.

- Meet a lump sum (15) thousand dinars for each ticket in all Iraqi airports for domestic flights.

- Meet a lump sum (30) thousand dinars for each ticket in all Iraqi airports foreign trips.

- Article -26- reconsider fees and taxes from the Ministry of Finance.

- Article -27- be customization Output Cree rivers ratio 100% instead of 50% to the Ministry of Water Resources.

- Article -28- the Commission proposes to add paragraph (sectoral banks continue to lend to citizens).

- Article - 29. The Committee suggests that the Council of Ministers the right to instruct the Central Bank on the issuance of treasury transfers or Treasury bonds instead of Prime Minister and Minister of Finance, and the Central Bank of the fact that the only official concerned with the management of monetary policy as an agent of the government.

- Article -30- The Commission proposes to delete the fact that the Council of Ministers issued a decision.

- Article - 31. delete the word (the following year) and replace the Year (current).

- Article -32- the Commission proposes to cancel it if applied will announce the retirement fund for bankruptcy within a year and the fund will continue to pay employees who pay cuts pensions of retired Froatbhm The rest of the Treasury.

- Article -33- Commission proposes to delete them being subject to political agreements.

- Article -34- Committee proposes not to transfer incomplete from the ministries to the provinces projects.

- Article II -35- change a word (imported b (contained).

- (Retirement acceleration) Proposal Committee added a new item - VI - to Article 12 shall be as follows:

- Sixth gives the employee who asked to retire if he had completed (50) fifty years of age, he had the pension service of not less than twenty (20) years following privileges exception of legislation related to delete degree of functional within the vocabulary of the angel of his constituency: -

1. foot degree function is calculated for the purposes of the premium service, promotion and retirement.

2. military service for the purposes of calculating the premium, promotion and retirement.

3. A piece of land by hometown.

Mguetrj Committee - Amendment Reasons and read as follows




Reasons

In order to prepare a budget that realistic managed on the basis of economic development and stability in the light of the moderate predictions of oil prices and the volume of production and tax revenues and fees to determine the guidelines to ward off potential risks and challenges facing the national economy and to ensure Admah battle victories and to support our security forces valiant various titles momentum to defeat the remnants of the terrorist Daash defeated and treatment humanitarian crisis of displaced persons and securing salaries, weapons, food, medicine and services to our people.
Initiated this law



Recommendation: -


The government's success in implementing their development programs and activities is achieved by adhering to the basic principles of budget transparency standards and disclosure mechanisms to raise and spend public funds in government departments all full compliance with the spending units which provide data, information, documents and reports on the financial and administrative activities in a systematic manner and in the times specified in law and posted on the their websites in order to facilitate for all contacts found and express their views and suggestions to activate the field to participate in public policy and contribute to the diagnosis of the problems and obstacles and to develop appropriate solutions drawing on the government to honor the financial leaders of the spending units who have dedicated themselves and kept the public money, and the punishment and accountability of complacency and Qsrozbb in the waste of public money or adults in his department's budget estimates and this comes through the role of prior censorship inspectors Alaumien and Integrity Commission and the Office of Financial Supervision to participate in the planning of the budgets in all departments before approval, Among the recommendations include: -

1. the export volume of 3 - 3.2 million barrels at a price not to exceed $ 40 in anticipation of an emergency such as bad weather conditions during the year and lower oil prices. And the circumstances of the agreements with the region.

2. Identify the goals by which the budget has been set up at all levels (economic, social, political, and security) and give the initial services that touch the lives of citizens.

3. reduction of the budget deficit ratio so as not to exceed 7%, according to Financial Management Law No. 95 of 2004.

4. The Ministry of Finance instructed the implementation of the budget after it is released no later than thirty days.

5. The government and follow up implementation of the budget and the movement of money and the method of disbursement and hold negligent and squatters on public money.

6. ministries and departments not linked to the Ministry and the provinces and the region is committed to the implementation of the Investment Law No. 13 of 2006, as amended, and shall bear the offending legal and administrative consequences.

7. (allocation of one billion dollars to deal with agriculture, infrastructure, the environment and border crossings and projects of water desalination in the province of Basra problems and begin the implementation of a major project for the cultivation of palm industry dates and youth employment for the cultivation of 30 million Palm start of Basra and ends in Diyala governorate).

8. project planting 20 million olive trees in the provinces of Diwaniyah and Dhi Qar, Maysan, Kut and Babil and Baghdad and the surrounding areas which need to be converted afforestation and green areas.

9. on the government to increase the investment budget of the Ministry of Water Resources, provided the allocations earmarked for the introduction of modern irrigation systems and developing the most of water in agriculture to take advantage sophisticated manner and not to waste this divine grace (water).

10. The State is obliged to pay dues companies and contractors that contracted with them to implement projects.

11. The State is obliged to pay dues peasants.

12. re-examine the methodology of import and holds the relevant ministries and departments specialized issuing instructions on goods that need to be imported .ouhjb goods that can be produced inside Iraq with grant-funded companies self-freedom manufacturing including local market needs of consumer goods and non-compliance with the typical industry to lead These measures to increase productivity and improve the financial and economic center for these companies.

13. The Economic Committee of the Council of Ministers to prepare a plan of foreign trade and assume all of the Iraqi Central Bank and the Ministry of Trade and the relevant authorities to discuss them, standardization and make the necessary recommendations thereon to the Council of Ministers for ratification in July of each year.

14. reconsider obsolete auction sell the currency, the Economic Committee holds in the Council of Ministers to form a committee of both the Central Bank of Iraq, finance, trade, oil, planning and industry, agriculture and those that are related to the process of import and ministries put the necessary recommendations for presentation to the Council of Ministers for approval.

15. reconsider tax deductions for employees to include the total salary (nominal + provisions) with the exemption of low income earners to ensure maintaining the minimum level necessary for a living

16. oblige all state departments to provide monthly financial statements to the Ministry of Finance during the first ten days of the following month for the purpose of audit and consolidated with the accounts of the state.

17. The Council of Ministers linking financial circles in the ministries and departments not associated with the Ministry and the provinces and provincial councils and regional administrative approaching associated technical and the Ministry of Finance and through an electronic system to ensure follow-up and independence and commitment to the regulations and instructions of the Ministry of Finance.

18. The Ministry of Finance financial statements of spending units all over the ninety days and submitted to the Council of Ministers and the House of Representatives and the Federal Office of Financial Supervision and the debt audited and report back to both the Council of Ministers and the House of Representatives and Minister of Finance within 30 days explaining the obstacles and appropriate solutions.

19. units linked to regulatory and internal audit units operating in spending all'drya financial and technical Diwan of the Ministry of Federal financial regulatory authorities in order to give them complete independence in the performance of their duties audit and oversight.

20 for sale. The Council of Ministers decision to contribute to the Asian Bank's fund for infrastructure and to assign the finance and foreign ministries and the formation of a negotiating delegation.

21. The Council of Ministers set up a sovereign fund for Iraq contributes to the stability of the budget in crisis conditions and handling the deficit and gives an indication of the world that Iraq urges pace towards the achievement of a comprehensive economic revival and development in various sectors.

22. New legislation public financial management and the abolition of Law No. (95) for the year 2004

23. separate budget to Moisntin investment budget and an operating budget while ensuring that the budget is to be programmed budget, not the budget items.

24 for sale. New legislation regulating its taxes and fees commensurate with the current situation.

25. Implementation of the customs tariff law and the allocation of part of the customs duties and tax revenues in the rehabilitation of ports and the development of cadres through investment.

26. Oblige the government to prepare an inventory of all the property to reconsider Bakiem allowances for rent or sell part of state property through the program in accordance with the legislation regulating the law. As the government Aldoairalkhaddmah convert to self-financing and honor the departments that achieve revenues to the public treasury.

27 for sale. Scheduling priorities on the list of investment projects and projects of import substitutes and which does not require rehabilitation huge tunnels amounts provided that they are able to achieve economic benefit significantly.

28. Expand the scope of beneficiaries and fees tendency to abandon free ride to impose duties on all the benefits and interests achieved by individuals and institutions of state property..

29.Activation of the power of law and the fight against corruption and corrupt track and restore public rights and public money.

30 days. I worked the oil licensing rounds, companies in the political and economic difficult security conditions and achieved significant budgets amounted to more than $ 750 billion, but lower oil prices requires us to reconsider these licenses to suit the current variables and focus on investment in the refinery sector and the announcement of licensing round for the construction of ten refineries 30 000 capacity barrel..

31. To instruct the Office of Financial Supervision reflecting on the fine details of spending to ensure the knowledge of the actual need for government outlays for the coming years.

32 for sale. The announcement of the trade, economic, industrial and agricultural policies in sync with the adoption of the budget.

33. The Council of Ministers announce licensing rounds in all economic sectors and adopt a new approach to financing by offering its shares for strategic projects (FAO port, the fourth license for mobile phone, Internet) to subscribe to the citizens to be a key partner.

34. Economic Commission progress in the Council of Ministers a detailed budget of foreign exchange and plan Showing the National Monetary report and assume all of the central bank and financial ministries of oil and the relevant authorities discussed and consolidated with the General Budget Law and submitted to the Council of Ministers in August for approval

35. Finally, we demand the government quickly new legislation for financial management instead of Law No. 95 of 2004, in line with the critical economic situation that Iraq is going through.


Jawad
al-Chairman of the Committee of Economy and Investment

http://www.parliament.iq/details.aspx?id=51840&AlwType=Pre